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ASX-listed McGrath Limited has revealed an $18.3 million boost to its net profit after tax (NPAT) in its full-year results announcement.
Addressing investors at its FY21 full-year results presentation, McGrath CEO Eddie Law highlighted NPAT of $19 million. This was “a significant turnaround” compared with FY20 profit, when the group had achieved NPAT of just $0.7 million.
You can find a summary of McGrath’s FY20 results here.
Revenue was markedly higher, up by 34 per cent over the year to $122.4 million.
Underlying EBITDA also achieved a sizeable boost — by $14 million to $17.7 million for FY21.
Also contained in the group’s key messages for investors was the achievement of a strong balance sheet with $35.8 million (up from FY20’s $17.3 million) and no borrowings.
As a result of the strong results, McGrath Limited will be providing investors with a 1.0 cent per share fully franked dividend — pushing up its total dividend for investors to 1.5 cents per share for the financial year.
A 34 per cent lift in revenue was also reported: from $91.6 million in FY20 to $122.4 million in FY21.
This was achieved by a 38 per cent rise in sales per agent for the period, despite McGrath conceding total lower listing volumes were present in the market.
“COVID has impacted all of us in some way,” Mr Law acknowledged.
“We have been fortunate that the real estate sector appears to be more resilient than many other industry segments, for which we are grateful.
“Notwithstanding the challenges during the ongoing COVID-19 pandemic and continued lockdowns, McGrath has demonstrated our ability to continue to transact successfully and efficiently in servicing our clients.”
Reflecting on the final results, Mr Law said: “McGrath’s unique business model of combining the strong annuity-style income derived from property management and franchise operations, alongside our company-owned sales offices, is delivering strong results.
“We note that positive market sentiment, price stability in McGrath’s key markets and strong clearance rates contributed to our sales businesses performing significantly better in FY21. Our property management business continues to contribute solid results.”
The CEO continued: “We are particularly pleased with our performance across the multiple markets in which we operate, and our business improvement initiatives across our business segments contributed to our overall results.”
Outlook
Looking ahead, the group has acknowledged there may be some continuing COVID-related volatility, but professes that the fundamentals of the property market remain strong.
“Despite sporadic lockdowns throughout various states, the first eight weeks of the new financial year have seen trading in line with our expectations and our business well positioned for long-term future growth,” Mr Law indicated.
Future plans
In his presentation to shareholders, the CEO indicated six areas where the company is focusing its efforts on business improvement and growth. Those are:
- Agent productivity – implement growth strategies
- Digital – continue to gain traction through website and digital solutions
- Property management – revitalise the PM business and improvement of the overall customer experience
- Enhanced projects division – execute an alignment agreement with a third-party capital provider
- Growth in mortgage home loans – enhance scale and optimisation within mortgage business through partnership with a financial services and technology consortium
- Industry consolidation – look to opportunities that complement existing businesses
ABOUT THE AUTHOR
Grace Ormsby
Grace is a journalist across Momentum property and investment brands. Grace joined Momentum Media in 2018, bringing with her a Bachelor of Laws and a Bachelor of Communication (Journalism) from the University of Newcastle. She’s passionate about delivering easy to digest information and content relevant to her key audiences and stakeholders.
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