This article is from the Australian Property Journal archive
THOSE were the words from Sydney’s “Mr Real Estate” John McGrath confirming he has a credit account with a bookmaker, capping off a bizarre day where his listed agency McGrath Ltd went into a trading halt after diving into the red.
McGrath issued a statement late last night “to clear the air” because he said the matters were distracting “attention from the important work of the company,”
“Like many Australians, I enjoy a punt. I have a credit account with a bookmaker for this purpose,”
Whilst McGrath did not disclose his credit account amount, he also did not deny the $16.2 million debt to Tom Waterhouse and William Hill Australia, which was reported a fortnight ago.
Meanwhile McGrath said that gambling account is not secured by, or otherwise connected with, his shares in the company.
“The account is well within my means in the context of my net wealth. I am in full compliance with the terms of that account.
“I dedicate more than 60 hours per week to my work for the company I founded 30 years ago,” he added.
McGrath goes into the red
McGrath’s statement comes after the listed real estate agency McGrath Ltd posted a $25.5 million loss in the first half year – a fall of 1043%.
McGrath’s interim revenue fell 23% to $51.6 million. More importantly, cash reserves declined by 35% to $3.4 million and operating cash flow dived 92% from $6.3 million to $0.5 million. Net assets fell 42% to $74.4 million.
Proforma NPAT fell 116% to a loss of $0.7 million. No interim dividend has been declared.
The results cap off a tumultuous period for the agency. At the beginning of the year, CEO Cameron Judson and the entire board resigned. Last month, it was reported that found John McGrath has a $16.2 million gambling debt, which he previously labelled “ridiculous”, although he confirmed last night he does have a credit account with a bookmaker.
Outgoing CEO Cameron Judson said the half year earnings were adversely impacted by the underperformance of the company owned sales business, including project marketing.
“Given the underperformance of company owned sales, a review of the carrying value of the segment was completed and has led to a $21.8 million goodwill impairment charge.
“The company has now completed the previously announced restructuring of the board, executive and corporate functions. These changes have delivered annualised savings of $5 million and a leaner organizational structure. Other things being equal, this structure and cost base is consistent with the earnings guidance given on 22 January 2018.
“I would like to thank all of our team and franchise partners for their energy, commitment and dedication during what has been a challenging period.” Judson said.
McGrath excited to be back
Meanwhile McGrath said he is very proud and excited to again be leading the business.
“Despite the challenges we have endured since listing, McGrath remains one of the best real estate businesses in Australia.
“Our investors and team have exhibited great patience and loyalty during this difficult time and I intend to work very hard to repay them for their confidence in the company. I have a clear plan to rebuild momentum but I will let our results speak for themselves from here.”
Trading halt
The company went into a trading halt yesterday pending an announcement from McGrath. The shares were suspended at 42.5 cents – a shadow of the $2.10 listing price in December 2015. The agency’s market cap sat at $60.66 million compared to $290 million at the time of listing.
Australian Property Journal
