McGrath Limited (ASX: MEA) announced its FY21 first half results on 22 February 2021, showing an underlying EBITDA of $6.6 million [1], compared with $1.6 million for the prior corresponding period.

McGrath stated at that time that the positive momentum from the first half had continued into the beginning of the second half and expressed optimism about the results for the rest of the year.

Based on the current expectations, underlying EBITDA [1] for the FY21 financial year is anticipated to be in the range of $16.51 million [1] to $17.51 million [1], compared with $3.7 million in underlying EBITDA in the prior year.

The residential property market has seen a range of positive indicators, including:

• In March quarter, national home values rose 5.8% - the highest quarterly growth rate since October 2003. [2]
• Sales volumes increased 12.6% nationally over the 12 months to March, with Regional areas performing strongly. [2]
• February 2021 seasonally adjusted year on year new household borrower commitments rose 48.8%. [3]

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Founder and Executive Director John McGrath said “Our 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. And in my opinion, we have the best agents in the country and we have been able to take advantage of the strong market.”

Mr Eddie Law, CEO of McGrath said, “The strength in the residential property market continued throughout the third quarter. The combination of improving business and consumer sentiment, record low interest rates and lower stock levels in the market, has driven strong price growth in recent months.”

McGrath’s continued business improvement initiatives include:

• Implementation of growth strategies to improve agent productivity;
• Continued traction from our newly launched data centric website and other digital solutions; and
• Revitalisation of the property management businesses, with a focus on improving the overall customer experience.

“We are particularly pleased with our performance across the multiple markets in which we operate and our business improvement initiatives are bearing fruit across our business segments. Trading continues to be positive and with the latest trends in GDP growth rates and record low interest rates, have provided us with the confidence about our earnings guidance for the full year,” Mr Law concluded.

1 Pre-adoption of new AASB 16 Leasing standard and not including Government Grants and gain on sale of business

2 CoreLogic Monthly Housing and Economic Chart Pack - April 2021

3 Australian Bureau of Statistics

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