John McGrath, the salesman who founded the first ASX-listed real estate agency, will tomorrow take back control of the company bearing his name, hoping to reverse a slide in revenue and profits.
Revenue at ASX-listed real estate agency McGrath fell 23% to $51.6 million for the half year to December.
The company posted a lost of $25.5 million after impairments of $22.9 million to goodwill.
McGrath has $3.4 million cash, no debt, and net assets of $74.4 million.
Founder McGrath, who has taken back direct management control of the company, said a “new approach” was needed, and thanked investors for their loyalty.
“I am very proud and excited to again be leading the business,” he says.
“Despite the challenges we have endured since listing, McGrath remains one of the best real estate businesses in Australia with outstanding talent throughout the Group.
“Residential real estate is one of the largest industries in Australia, as well as being the country’s largest asset class, and we remain very well positioned to leverage our scale and quality brand for future success and growth.
“Our investors and team have exhibited great patience and loyalty during this difficult time and I intend to work very hard to repay them for their confidence in the Company.
“I have a clear plan to rebuild momentum but I will let our results speak for themselves from here.”
The company floated in December 2015 at $2.10. The shares last traded at $0.425.
Outgoing CEO Cameron Judson says earnings have been adversely impacted “by the underperformance of our Company Owned Sales business, including Project Marketing”.
“Our annuity businesses, Property Management, Franchise and Oxygen have performed largely to expectations,” he says.
He says the restructuring of the board, executive and corporate functions have delivered annualised savings of $5 million and a leaner organisational structure.
The McGrath network, with 95 offices and 2,000 staff, has a market by sales value above 3% nationally.
Judson leaves the company tomorrow.
Chairman Cass O’Connor and current non-executive directors Elizabeth Crouch and Cath Rogers have also announced their intention to resign.
McGrath says he’ll take the role of interim executive chairman when the current board of directors steps down.