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Colin Hay

Australia’s leading real estate business The Agency (ASX: AU1) has recorded strong year on year growth on key financial and operational metrics in HY2024.

Continued geographical expansion and increased depth in existing markets underpinned growth across the period.

This growth resulted in Gross Commission Income (GCI) for the six-month period of $56.9 million, up 24% on HY2023’s GCI of $45.7 million. This figure was a result of 3,115 exchanges across the Group for HY2024 (up 9% on 2,847 exchanges in HY2023) resulting in $3.3 billion worth of property sold across the combined Group for the period (up 29% on $2.6 billion in HY2023).

Group revenue for HY2024 increased to $43.9 million, up 17% on HY2023’s Group revenue of $37.5 million.

The pipeline for future sales commission remains strong with the combined Group reporting 3,224 listings for the half-year period from 411 agents as at 31 December 2023 (411 agents at 31 December 2022).

In the six months since 30 June 2023, The Agency continued to increase the quality of the agent team with a trend of lower performing agents leaving the industry, replaced with higher performing agents.

The Agency reported a total management portfolio of 10,092 properties under management at the end of December 2023. The Agency owned 5,089 of these property under management rights located in NSW, Victoria, Tasmania, and WA and The Agency has full profit and loss benefits on these managements. The remaining 5,003 properties under management are managed under service arrangements.

For HY2024 the Group recorded EBITDA of $1.69 million (HY2023: $0.14 million). After adjusting for the AAB16 Leases impact, underlying EBITDA for HY2024 was $0.56 million profit. This represents a $1.50 million improvement in underlying EBITDA.

The Group's cash and cash equivalents increased from 30 June 2023 by $0.07 million to $4.70 million at 31 December 2023 (30 June 2023: $4.63 million).

Future Developments

The Agency continues to focus on growth opportunities and attracting real estate agents to its contemporary direct engagement business model.

Further growth is expected from increased efficiencies driven by economies of scale and utilisation of best practice technological advances to ensure agents can maximise their productivity.

The company says the highly fragmented structure of the industry presents an opportunity for consolidation of smaller independents and franchisees looking to simplify their business which aligns with the strengths of our business model.

The Agency continues to assess a variety of strategic partnerships and adjacent revenue opportunities closely related to the activities of real estate sales transactions in addition to the existing property management, mortgage broking and conveyancing businesses already undertaken.

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