While Australia’s housing market shows no signs of an uplift in the near-term, real estate disruptor The Agency Group is bucking the trend delivering a 42% increase in total revenue for the HY2019.
The company (ASX:AU1) delivered HY2019 total revenue of $10.2 million for its WA operations including Sell Lease Property – acquired in February 2018 – up from $7.2 million in HY2018.
Real estate commissions for The Agency and SLP came in at $7.5 million for the period consisting of $3.4 million from SLP and $4.1 million from The Agency. Total commissions were up 60% on $4.7 million reported in HY2018.
The Agency Property Management reported 639 managements for HY2019 generating income of $0.69 million, up 30% on $0.54 million in HY2018.
Following the acquisition of Vicus Residential post end of period, the number of managements have increased to 828 managements.
Mortgage and Financial Solutions Australia posted income of $1.5 million for HY2019, up 15% from $1.3 million for HY2018.
Landmark Settlements posted income of $0.48 million for the HY2019, up 30% from $0.38 million for HY2018.
Despite the decreasing market, we are proving our model works by achieving strong growth in Western Australia so far in FY2019 with 30% growth anticipated across all key metrics including properties sold, properties under management, listings and revenue,” The Agency Managing Director Paul Niardone said.
“We are confident revenue growth will continue via organic growth which is driven by recruitment due to the attractiveness of our model.
“When considering The Agency is officially a start-up, this growth represents a phenomenal achievement and is testament to our proven disruptive model and the tireless efforts of all staff,” he added.
In 2019, due to the tougher market The Agency anticipates there will be further consolidation in the industry with The Agency’s disruptive model to attract further attention from agents and business owners wishing to change as they look for a more attractive offering and stronger brand and business model.
With completion of the Top Level transaction, The Agency expects a number of other reputable businesses to join the national brand.
According to Mr Niardone, the company’s approach to acquisitions will be very selective and will only consider those real estate firms which are significantly value accretive to the business.
As at 31 December 2018, the company’s WA operations including SLP had 175 sales agents.
Shares in The Agency – which has completed a 1:30 share consolidation and 6 for 10 bonus issue to shareholders – were trading Friday at 16c.