Premier Sydney-based real estate group McGrath has reported a 35% drop in full-year after tax profits in a year in which it opened new offices and acquired a number of businesses.
The full year audited results are for the year to June 30 2012, having been lodged with ASIC earlier this month.
McGrath Limited reported profit after tax of $2.25 million compared with profits of $3.49 million in the prior financial year.
A dividend of $2.87 million was declared compared with a dividend of $4.88 million in 2011.
The fall in profits was despite a 5% rise in revenue, which increased from $43.78 million to $45.89 million with cost of sales, employee benefits and occupancy costs rising.
Financing costs and doubtful debts halved.
McGrath also renegotiated the terms of a $6.3 million loan facility with Macquarie Bank.
During the course of the year, McGrath expanded its network of offices to 45 including 38 franchise offices, acquired the sales and rent roll business of Sarah Lorden Real Estate for $2.94 million and acquired the rent roll business of IC Property Group for $1.11 million.
In total, McGrath’s offices generated over $5.9 billion in residential sales from 6,616 transactions and also derived income from property management services.
McGrath sold 1,787 properties over the $1 million mark with new offices opening in Balmain, Crows Nest, Frenchs Forest, Brisbane, Toowoomba, and Dickson (ACT).
In the first few months of the current financial year, McGrath has added a further five offices to its network which now totals 50 offices and over 1,100 staff.
McGrath’s most recent new office opening was a franchise office in Brisbane’s north-east - McGrath Wynnum Manly – which marks its second Brisbane franchise office and third office in total.
The franchisee is Michelle Rodgers, formerly with RE/MAX Manly.
McGrath offices also picked up awards during the year with McGrath Mosman wins best large residential agency at 2012 REINSW Awards McGrath Dickson winning best medium residential agency at 2012 REIACT Awards
“Notwithstanding a challenging real estate market in some price segments, McGrath has continued to expand our geographical footprint and importantly, significant market share increases in our existing areas of business, Geoff Lucas, chief operating officer of McGrath Estate Agents told Property Observer.
“2012 was a year of continued expansion for McGrath. Most notably the establishment of two significant company owned offices in Balmain and Paddington Brisbane. We continued investing in our new businesses on the Gold Coast, project marketing division and our franchise rollout.
“All these businesses require initial investment and we are pleased with their substantial contribution to group earnings that will be reflected in the 2013 financial year.”