Trading halt on McGrath shares as real estate firm reviews prospectus forecasts

Trading halt on McGrath shares as real estate firm reviews prospectus forecasts
Trading halt on McGrath shares as real estate firm reviews prospectus forecasts

Real estate group McGrath Ltd, whose shares have lost more than a third of their value since its market debut in December, called for a trading halt on Friday to review its prospectus forecasts.

McGrath said it was "reviewing the 2016 financial year prospectus forecast in light of current market and trading conditions," in an announcement to the stock exchange.

"The trading halt is requested in order to allow McGrath time to finalise its analysis of information and review by the Board," it said. 

It has until Tuesday to provide any update after the board analysis.

The development comes only a day after broker Bell Potter Securities said the stock was undervalued compared with international peers. The broker has a 12-month price target of $2.25 and a 'Buy' rating on the stock.

McGrath's stock fell below its IPO price in its market debut at $2.10 and has lost almost a third of its value since. It closed at $1.30 on Thursday.

Its shares fell to a low of $1.20 on March 16, according to data from Thomson Reuters.

The request for the trading halt comes ahead of an update on how the company is progressing against its forecasts.

The collapse in McGrath's share price stems from investor concern about both the earnings as the Sydney housing market subsides, and about the multiple on which those earnings are priced, a recent AFR report said.

But other sources suggest listings and sales volumes have shrunk in the overall market. 

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Mcgrath Shares

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