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Outgoing McGrath CEO Cameron Judson has outlined the "brutal facts" behind the beleaguered company's persistent underperformance since it listed in 2015 on the ASX, after announcing recently that it had made a $25 million after-tax loss.
Mr Judson, who leaves the company today, said that the main challenge McGrath has faced is the “significant drop” in company sales.
He said that this is due primarily to the company losing more than 50 of its best performing agents since the listing and not being able to replace them like-for-like.
“And that then reflects on the numbers that you see in both revenue and EBITDA — that is the brutal fact,” Mr Judson told REB.
“So, the honest answer is we have more work to do on the attraction of talent and more work to do on the development of that talent. And in absolute terms on a year-on-year basis, we’re behind the ball in absolute numbers.
“In the company-owned residential sales business, we lost 35 high-performing sales agents at the beginning of the last calendar year. And we finished the year on a PCP basis down 52, so that will tell you that we have lost a further 17 people in the course of the calendar year — which is not great.”
Mr Judson said that John McGrath and the leadership team spend all of their time in the marketplace talking to talent.
“And John and the cohort of leaders in this business have had a great track record of attracting and growing and developing the best in the industry, which is why we have 19 in the REB Top 100.”
But Mr Judson said that the challenge is that it takes time to attract and develop talent.
“About the cohort of people that we have lost, we are competing as well as we have, but we have less high-performance people competing, and in a tough market, the higher performing people win more than their fair share.”
“Some of the best agents have been in the business for 15 to 20 years.”
At a conference call on Thursday (15 February), McGrath Limited revealed its FY18 half-year results, with revenue down by 23 per cent to $51.6 million, EBITDA down by 66 per cent to 3.2 million and with a statutory net after tax loss of $25.5 million.
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