AGM details & Presentation
AGM DETAILS & PRESENTATION
National real estate company The Agency Group Australia (ASX:AU1) (“The Agency” or “the Company”) is holding its 2022 AGM via a hybrid meeting at 8:30am AWST (11:30am AEDT) on 18th November 2022. The meeting will be held at The Agency’s head office at 68 Milligan Street, Perth, and as a virtual meeting.
Hybrid Virtual Meeting
The Company is pleased to provide the opportunity to access the meeting through an online meeting platform powered by Advanced Share Registry. Please use the relevant links below to access the virtual meeting:
Shareholder Login
https://www.advancedshare.com.au/Dashboard/Virtual-Meeting-Centre-Login
In order to login to the AGM, shareholders will require:
- Meeting ID: AU10010
- Shareholder ID: this is located on your proxy form
Shareholders attending the Meeting virtually will be able to submit questions both written (by typing) and verbal (by recording their question) during the meeting, by clicking on the ‘ASK A QUESTION’ button.
All enquiries, please contact Advanced Share Registry on +61 8 9389 8033.
AGM Presentation
A copy of the AGM presentation by The Agency Managing Director and CEO Geoff Lucas is attached
(ASX: AU1) Annual General Meeting 18 November 2022
FY22 KEY TAKEAWAYS
UNDERLYING EBITDA1 Revenues from Ordinary Activities GCI2
$3.85M $72.7M $102.5M (FY21: $3.06M) → +26% (FY21: $58.4M) → +24% (FY21: $80.7M) → +27%
Gross Value of Properties Sold No. of Properties Sold No of Agents
$5.9Bn 5,709 393 (FY21: $4.8Bn) → +23% (FY21: 4,964) → +15% (FY21: 308) → +28%
1. Underlying EBITDA adjusted for the impact of AASB16 and Government Incentives received in the prior period 2. Gross Commission Income (“GCI”) is the fees the vendor pays for the sale of a property. Nov 2022 AGM Presentation 2
Continued growth in agent numbers with 415 agents at 31 Oct 2022 (up from 393 at 30 June 2022)
Since 30 June 2022, The Agency has entered its sixth state being Tasmania through its acquisition of Bushby Property Group.
Geographical expansion in South East Sydney is an example of using organic recruitment to expand market share in areas adjacent to existing brand recognition.
The Agency has continued to focus on expanding its geographical footprint in December.
Nov 2022 AGM Presentation 3
Bushby Property Group Acquisition Bushby Property Group, renamed The Agency – Team Bushby settled on 22 July 2022. The business sells approx. $125m in real estate on an annual basis and has 1,300+ Properties under management
Consideration of c. $5M subject to a number of earn out provisions based on performance and growth
Integration of business broadly completed with efficiencies and coordinated branding initiatives successfully undertaken
Recruitment initiatives to build off the back of this market entry strategy has commenced
Further geographical expansion into other Tasmanian cities expected to be earnings accretive
Nov 2022 AGM Presentation 4
MDC Trilogy Group Alliance
New strategic alliance with MDC Trilogy Group (“MDC Trilogy”) to accelerate The Agency market share across geographical areas.
An inhibitor to agent recruitment is often an agent owning existing rent roll assets. The alliance with MDC Trilogy provides an opportunity for the agent to sell their business including rent roll assets and join The Agency as a sales agent.
The business sale allows the agent to refocus on their selling strengths rather than administrative tasks that enables a focus on superior services and results to the customers.
Across Australia, there are 3.25 million rental properties which we estimate are worth near $3 trillion dollars in asset value. This is broadly equivalent to the entire ASX listed stocks value and compared to the ASX listed funds management industry, the management of the residential rental properties has seen limited innovation over recent decades.
MDC Trilogy Group intends to continue purchasing rent rolls across New South Wales, Queensland and Victoria areas with favourable demographics, strong rental appreciation potential and high demand from tenants and investors and is in late stage due diligence on a number of further opportunities that will be managed by The Agency.
Nov 2022 AGM Presentation 5
Investment in Marketing Activities
Appointment of Chief Marketing Officer and National Head of Brand
1 December 2022 National Brand Refresh to align all regions under a single brand guidelines to improve brand recognition and penetration
1 December 2022 will also launch a new website to maximise engagement and generate sales, landlord and recruitment leads
Launch of bespoke marketing offering that coordinates inhouse all agent marketing requests to generate better consistency of brand
Variety of local level brand campaigns across various markets to complement agent campaigns to build brand awareness
Leveraging existing sponsorship opportunities to generate a greater return
Nov 2022 AGM Presentation 6
Data Strategy
We have made significant investments in the area of data strategy and security with the appointment of a Chief Technology Officer. The CTO will focus on identifying efficiencies and deliver efficiency savings, along with leading IT investments that support and enhance our growth strategy as we scale nationally.
CONNECTING OUR SYSTEMS The Agency has undertaken a nation-wide project to consolidate all of our systems and ensure they work together more seamlessly. Progress to date has focused on the collation of data into a data warehouse which allows greater visibility of our customers across our various software platforms used across departments (sales, property management and ancillary services). This allows our team members to provide more meaningful interactions with our customers across all geographic regions and across all arms of the business.
CONNECTING OUR SUPPLIERS AND SERVICES The Agency has continued the integration of best in class IT solutions that provide Agents with a better experience through the integration of suppliers across the entire property journey lifecycle. This ensures a better experience for our agents and ensures The Agency has a competitive difference.
SEAMLESS ONBOARDING FOR OUR AGENT RECRUITS The Agency has built proprietary technology and workflow process that assists in onboarding agents and agencies without the need to change their existing technology they are familiar with. This allows for rapid transition into the technology ecosystem which results in lower training time required for new agents. Nov 2022 AGM Presentation 7
Data Security
DATA SECURITY STRATEGY External Data Security review process being undertaken by The Agency to review how data is collected and stored. While the majority of our customer data is held in external SaaS databases, The Agency still has a responsibility to minimise any risk. Benefits of this review include changing the way The Agency is capturing data. As an example, The Agency is incorporating new custom technology that ensures a high standard of legal compliance from listing to settlement. The Agency will roll out in January a new ID verification software that is cutting edge and reduces the quantum of sensitive data held on The Agency’s technology ecosystem, or its SaaS providers.
Nov 2022 AGM Presentation 8
FYTD23 Change in sales volumes, four months to Oct 2022
Market Sales NSW -28.2%
Volumes VIC
QLD -15.6%
-18.6%
SA 11.8%
WA 8.0% In the 4 months to 30 October TAS -16.0% 2022, Australian market volumes have reduced 15.8% from prior corresponding period. ACT -3.7%
The Agency has recorded better than system performance with volumes reducing bu 0.9%. This has led to increased market share of national transactions. Australia Combined Regionals Combined Capitals – – – 15.8% 14.8% 16.4% Recent months of sales volumes are modelled estimates, and are subject to revision
Source: CoreLogic Economist Pack October 2022 Nov 2022 AGM Presentation 9
Business Performance Update Key Performance Indicator Update
4 months to 31 Oct 4 months to 31 Oct Variance 2022 2021 # of Listings 2,152 2,072 +3.8% # of Properties Sold 1,861 1,878 -0.9% Gross Sales Volume $1.7bn $2.0bn -12.8% Gross Commission $30.8m $34.2m -10.0% Income (GCI) No of Agents 415 340 +75 agents Despite the national market number of properties sold reducing by -15.1%1, we have achieved better than system performance with movement in properties sold of by -0.9%. This has lead to increased market share of national transactions. Although we are increasing national market share, reduction in sale prices is the main contributor to lower Gross Commission Income. Notwithstanding a softer market environment, to ensure future growth is not inhibited, management have remained committed to invest in initiatives that ensure solid foundations. During the 1H FY23, these include a branding refresh, data consolidation strategy, data security review and establishment costs relating to MDC Trilogy Group. Costs are also being impacted by inflationary pressures. These initiatives and along with inflation have result in increased operating expenses. Operating Costs are in line with plan, however the reduction in revenue against plan is likely to result in an EBITDA Pre AASB 16 in 1H FY23 up to negative $1.0m. Management intends to continue focusing on investing in future growth initiatives in 2H FY23 however has commenced a number of cost reduction actions which the company will see a benefit of in 2H FY23 and FY24. Nov 2022 AGM Presentation 10 1: CoreLogic Economist Pack October 2022
STRATEGIC OBJECTIVES
Further expansion of Enhancement of adjacency Further development and Training initiatives to ensure Leveraging technology and geographical regions across offerings to our agents and rollout of a Multi Brand our Agents are positioned to cost of doing business Australia in a disciplined customers to increase the Strategy. capitalise on changing market efficiencies to enhance agent capital and operating share of wallet. conditions. experience and ensure a solid expenses approach including scalable platform for growth. through MDC Trilogy Group.
Continued growth in agent numbers across the company.
Nov 2022 AGM Presentation 11
CY2023 OUTLOOK
Across 2023, states with lower In May, we have revised our Inexperienced agents Market Consolidation Consumer sentiment lower median price points to CY22 National price growth to continue to leave the industry. continues as smaller than GFC despite reduction in continue to transact above be -4% to -8%. Calendar year independents and franchisees quantum of interest rate decade average levels, to date is -5.3%. look to access operating movements. outperforming higher median efficiencies. The MDC Trilogy priced states which are CY23 likely to be a year of two Group alliance means we are Recent weeks has started to expected to transact below halves. The beginning of the well placed to capitalise on see an improvement in decade volume averages. year is likely to have continued this. auction attendance and price reductions, followed by clearance rates as rates get price stabilisation in Spring closer to their terminal value 2023. Expectation of -2% to – for this cycle. 7% national price decline across the fill year.
Nov 2022 AGM Presentation 12
Geoff Lucas Managing Director & CEO geofflucas@theagency.com.au LinkedIn: www.linkedin.com/in/geoff-lucas
David Tasker Chapter One Advisors dtasker@chapteroneadvisors.com.au
Nov 2022 AGM Presentation 13