McGrath’s CFO Glynn Wright Steps Down


McGrath Limited (ASX: MEA) is an Australian based company providing residential real estate services including property management, real estate career training, residential property sales, mortgage broking and auction services.

On 12th March 2019, the company announced that the existing Chief financial officer (CFO) Glynn Wright has resigned from his position and will be leaving his working tenure in June 2019.

Mr. Geoff Lucas, Chief Executive Officer (CEO) stated they are grateful for the important role that Glynn has played in the McGrath management team for the past 18 months. There has been a significant financial restructuring of the group’s financial operations, led by Glynn during this period of business turnaround. He also stated about the first half resultS which has been announced on 18th February 2019. The company reported zero debt, $39.4 million in net assets, $16.5 million in cash.

On 18th February, the company announced its results for half year ended 31st December 2019. The company reported a loss in the statutory revenue at $42.5 million in 1HFY19 from the previously reported number of $51.6 million in 1HFY18, down by 18%. The reason for the loss in the revenue is stated to be challenging market conditions which impacted the growth. The slowdown in the Project Marketing business due to tightening regulatory and economic conditions impacted investment demand, which led to a fall in the revenue.

The statutory EBITDA also saw a decrease and was reported at negative $5.8 million compared to negative $0.1 million in 1HFY18. The underlying EBITDA fell from 1.6 million in 1HFY18 to negative $2.5 million in 1HFY19. Company Owned Sales segment were the primary contributor to the decline in the underlying EBITDA from the previous year and Lower transaction volumes also impacted Franchise earnings growth.

However, the statutory net loss after tax (NLAT) was reduced compared to the previous year. The NLAT for 1HFY19 was reported at $9.6 million compared to $25.5 million loss in 1HFY18. However, the underlying NLAT increased from $1.8 million in 1HFY18 to 3.3 million in 1HFY19. The net loss was attributable to the impairment and difficult contracts relating to the rechannelling of the IT strategy plus other tax adjustments.

On the balance sheet front, the total assets of the company reduced from $61.62 million in 2HFY18 to $55.59 million in 1HFY19. Although the cash and cash equivalents were increased from $10.92 million in 2HFY18 to $16.49 million in 1HFY19 but the reduction in Trade and other receivables, intangible assets etc. have ultimately led to the decline in the total assets. On the liabilities side, the company has again maintained its debt-free status and managed to reduce its total liabilities from $19.23 million in 2HFY18 to $18.84 million in 1HFY19.

The FY19 outlook by the company showed some concerns regarding underlying EBITDA as it is expected to be reduced due to ongoing difficult trading conditions. The company will be focusing on

  • Maintaining a focus on attracting and developing the industry’s top sales agents.
  • Strategic acquisitions in the key growth areas will continuously be assessed
  • Partnering with leading property data providers to generate market-leading insights.

The  stock price is trading 3.85% lower at A$0.250 as of 12th March 2019 (AEST: 2:10 PM) compared to the previous closing of A$0.260. The YTD return for the stock is negative 10.3% (excluding today’s loss).


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