McGrath meets prospectus forecasts, but shareholders spooked by housing market disruption

McGrath meets prospectus forecasts, but shareholders spooked by housing market disruption
McGrath meets prospectus forecasts, but shareholders spooked by housing market disruption

In its first interim half year results since listing, McGrath Estate Agents yesterday reported record revenue of $74.9 million, with listings up 23 percent, sales volumes up 15 percent and properties under management up 28 percent.

Excluding the cost of the IPO, pro-forma net profits rose 13 percent to $8.5 million. 

McGrath Ltd plans to pay a maiden final FY16 dividend of 4.5¢ a share.

Click to enlarge

McGrath meets prospectus forecasts, but shareholders spooked by housing market disruption

But perhaps given fears of housing market disruption, McGrath Ltd shares hit a new low despite the real estate group saying it had met all its prospectus forecasts in its first interim results since floating on the ASX last December.

McGrath shares began the day at $1.70 falling to $1.37 soon after the publication of the group's first interim results and ended the day at $1.45.

The company floated at $2.10. It is trading at $1.46 in today's trade.

"For myself and the people in the company it is a concern. [The float] has not yielded the results we expected, but we are in it for the long term" Mr McGrath, who owns 61 per cent of McGrath Limited, told the Australian Financial Review.

The report noted challenging market conditions due to short term industry uncertainty "outside of our control" - APRA regulatory changes, slowdown in Chinese buying activity, stock market volatility impacting near term confidence and concerns about possible changes to negative gearing.

Listed on ASX on 7 December 2015, it reported the number of sales over the half year was up 15% to 6,492.

The properties under management up 28% to 7,648.

Its agent numbers were up 59 (10%) to 624.

The company had no debt, with $14 million cash and an undrawn $11.5 million term facility.

Jonathan Chancellor

Jonathan Chancellor

Jonathan Chancellor is one of our authors. Jonathan has been writing about property since the early 1980s and is editor-at-large of Property Observer.

Tags: 
Mcgrath Stock Exchange

Comments

Be the first one to comment on this article
What would you like to say about this project?