AGM Presentation & Update
Annual General Meeting
16 November 2023
FY23 AGM Presentation 2
Managing Director AGM Presentation & Update
FY23 Key Takeaways FY23 AGM Presentation 3
$(1.30M) $76.9M
Underlying EBITDA1 Revenues from Ordinary Activities (FY22: +$3.85M) (FY22 : $72.7M)
$5.3B 5,734 Gross Value of Properties Sold No. of Properties Sold (FY22 : $5.9B) (FY22 : 5,709)
$95.4M 399 GCI2 No of Agents (FY22 : $102.5M) (30 June 2022: 393)
1. Underlying adjusted for the impact of AASB16 Leasing Standard, Gain on Sale and other one off items. 2. Gross Commission Income (“GCI”) is the fees the vendor pays for the sale of a property.
FY23 AGM Presentation 4
Stable agent productivity against a $102.5m
fall in market volumes 5,7095,734 583,087 570,566 1.23% $95.5m
underpinned market 4,964 0.98% $80.7m
share growth 464,945 0.87% 414,723 384,183 0.76%
3,147 0.63% $47.9m
$37.9m 2,407 0.98% to 1.23% Increase in National Market Share in FY23
Although we are increasing national market share, state mix of sales and average selling price movements have impacted Gross Sales Volume and lower Gross Commission Income.
WA Average Sale Price in the period was +7.6% in FY23, while NSW Average Sale Price was -5.7% in FY23 which are No of Properties Sold National Transaction Volume* National Market Share Gross Commission Income both broadly in line with market movements (+6.0% and -5.3% ($M)^ respectively). FY19 FY20 FY21 FY22 FY23
* Source: CoreLogic Economist Park (Jul 2023). National Market Share Source: The Agency # of Sales / Estimated Properties sold per CoreLogic Economist Park (Jul 2023) Note – recent months sales are subject to revision by CoreLogic ^ Gross Commission Income (“GCI”) is the fees the vendor pays for the sale of a property.
FY23 AGM Presentation 5
A growing brand now with 414 agents at 31 October 2023 with presence across 6 states and territories.
Across FY23, the broader industry saw a number of lower performing agents exit the industry as a result of the tough operating environment on the East Coast. The Agency achieved good recruitment success in Western Australia during the period as we focus on gaining market share in the premium western suburb markets.
Following the July 2022 entry into the Tasmanian market, in December 2022, The Agency expanded its presence to Rockhampton and Capricorn Coast in QLD as part of our objective to have a stronger local presence in regional powerhouses to better service our clients at the local and national levels.
In May 2023, The Agency announced the joining of independent Devine Real Estate to The Agency. Located across 4 offices across Inner West of Sydney selling over $250m in properties annually, this expansion was in conjunction with MDC Trilogy Group Alliance.
On 1 August, The announced the joining of independent Coleman Estate Agents to The Agency. Located in Toukley on the Central Coast region in NSW, the office led by Ron Coleman sells over $100m in properties annually and is a logical expansion from our existing office in Terrigal on the southern area of Central Coast.
FY23 AGM Presentation 6
Over 9,000 investment properties managed by The Agency
Following the acquisition of Bushby Property Group, and the re-establishment of the Western Australia property management business, The Agency has grown to 5,024 properties under management as at 31 October 2023.
Since its announcement, MDC Trilogy Group have deployed nearly $25m in purchasing rent roll assets across NSW and Queensland. These purchased rent roll assets comprise of over 4,000 properties under management which are now managed by The Agency under a services arrangement.
Combined, the 9,000 plus managed properties represent an estimated $8 billion of Australian’s property investors wealth and has the ability for Landlords with a geographically dispersed portfolio the opportunity to have all their properties managed by a single company. The increased portfolio scale enables greater cost synergies across The Agency owned portfolio.
FY23 AGM Presentation 7
Change in sales volumes, four months to October 2023
FYTD24 Market Sales NSW 3.2%
Volume VIC 1.6%
QLD 0.6% In the 4 months to 31 October June 2023, Australian market volumes have increased +2.1% from prior year period SA 8.4% levels.
The Agency has recorded better than WA 3.7% system performance with volumes increasing +10.7%. This has led to increased market share of national TAS -2.7% transactions.
ACT -8.6%
Source: CoreLogic +2.1% +4.5% -2.0% Note – recent months sales are subject to revision by CoreLogic Australia Combined Regionals Combined Capitals
FY23 AGM Presentation 8
Change in dwelling values, three months to October 2023
Last 3 Months Dwelling Value Sydney 2.5%
Price Movement Melbourne 1.2%
Brisbane 3.8% In the 3 months to 31 October, Australian prices increased 2.3%, easing slightly from a recent higher of Adelaide 4.2% 3.1% in the June 2023 quarter.
Perth 4.6%
Hobart 0.3%
Canberra 0.7%
Source: CoreLogic +2.3% +1.5% +2.6% Australia Combined Regionals Combined Capitals
FY23 AGM Presentation 9
Annual change in rental rates to October 2023
Annual Rental Movement Sydney 9.9%
Melbourne 11.8%
Brisbane 7.9% In the 12 months to 31 October, Australian rental rates changed 8.1% Adelaide 7.0%
Perth 13.2%
Hobart -3.3%
Canberra -3.0%
Source: CoreLogic +8.1% +4.0% +9.7% Australia Combined Regionals Combined Capitals
FY23 AGM Presentation 10
Business Performance Update
4 months to 31 4 Months to 31 Variance October 2023 October 2022 # of Listings 2,282 2,152 +6.0% # of Properties Sold 2,071 1,861 +10.7% Gross Sales Volume $2.1b $1.7bn +22.4% Gross Commission Income (GCI) $36.8m $30.8m +19.4%
The Agency has outperformed that national market number of properties sold, with 10.7% increase in transactions, compared to 2.1% growth in market. The Agency had 414 agents as at 31 October 2023, up from 399 Agents reported at 30 June 2023.
A return to a greater portion of East Coast Sales has assisted the Average selling price increase of 10.8%, which has assisted the growth of GCI of 19.4% over the first 4 months of the financial year. Circa 10% of the GCI growth has come from growth in existing geographical locations, with the remainder growth is from new geographical regions.
Pleasingly, this GCI Growth, along with disciplined cost control has enabled a return to EBITDA Pre AASB16 profit in the first 4 months.
A number of growth initiatives continue to be implemented that enables further benefits from The Agency’s existing office infrastructure and additional geographical areas that will enable the The Agency continues on its path to grow Gross Commission Income to $200m.
FY23 AGM Presentation 11
Strategic objectives
Growth in agent Developing adjacent Multi Brand Strategy. Training and coaching. Leveraging numbers. offerings. technologies. Further expansion of Enhancement of Continue development Further investment into Leveraging technology and geographical regions across adjacency offerings to and rollout of training and coaching cost of doing business Australia in a disciplined our agents and secondary brand. initiatives ensuring efficiencies enhancing agent capital and operating expense customers to increase Agents and support experience. Focus on building approach. This will include the share of wallet. teams are well placed out the scalable platform for potential acquisitions through to capitalise on future growth. MDC Trilogy Group. evolving market Continued growth in agent conditions. numbers across all targeted regions across the country.
FY23 AGM Presentation 12
FY2024 Outlook
Volume increases Greater price stability. Shift towards larger Market consolidation to Mixed consumer expected. agent teams. continue. sentiment. Across FY24, states with Following the expectation that Super Agent Teams to Market Consolidation 1H FY24 consumer sentiment lower median price points to interest rates are at or very continue to grow as continues as smaller to remain broadly at currently continue to transact above near the terminal rates, FY24 inexperienced agents continue independents and franchisees levels as consumers adjust to decade average volume is expected to see a period of to leave the industry. look to access operating higher interest rates, levels, outperforming higher price stabilisation across the efficiencies. The MDC Trilogy followed by a rebound in median priced states which country. However it may be a Group alliance means we are consumer sentiment during 2H are expected to transact 2-tier market, with more listings well placed to capitalise on FY24 as media start below decade volume in lower value properties this. discussing the peak of the averages. potentially causing price falls, tightening cycle having been while higher value properties reached. may experience price increases.
FY23 AGM Presentation 13
Geoff Lucas
Managing Director & CEO geofflucas@theagency.com.au linkedin.com/Geoff-lucas
FY23 AGM Presentation 14 FY23 AGM Presentation 14
Not an offer This presentation is for information purposes only. This presentation political and social uncertainties and contingencies; does not comprise a prospectus, product disclosure statement or involve known and unknown risks and uncertainties that other offering document under Australian law (and will not be lodged could cause actual events or results to differ materially with the Australian Securities and Investments Commission) or any from estimated or anticipated events or results reflected other law. in such forward looking statements; and may include, among other things, statements regarding estimates and assumptions in respect of prices, costs, results and Summary information capital expenditure, and are or may be based on This presentation does not purport to be all inclusive or to contain all assumptions and estimates related to future technical, information about the Company or any of the assets, current or economic, market, political, social and other conditions. future, of the Company. This presentation contains summary The Company disclaims any intent or obligation to information about the Company and its activities which is current as publicly update any forward looking statements, at the date of this presentation. The information in this presentation is whether as a result of new information, future events or of a general nature and does not purport to contain all the information results or otherwise. which a prospective investor may require in evaluating a possible investment in the Company. The words “believe”, “expect”, “anticipate”, “indicate”, “contemplate”, “target”, “plan”, “intends”, “continue”, The Company does not undertake to provide any additional or “budget”, “estimate”, “may”, “will”, “schedule” and similar updated information whether as a result of new information, future expressions identify forward looking statements. events or results or otherwise. All forward looking statements contained in this Presentation are qualified by the foregoing cautionary Forward looking statements statements. Recipients are cautioned that forward looking statements are not guarantees of future Certain statements contained in this presentation, including performance and accordingly recipients are cautioned information as to the future financial or operating performance of the not to put undue reliance on forward looking statements Company and its projects, are forward looking statements. Such due to the inherent uncertainty therein. forward looking statements: are necessarily based upon a number of estimates and assumptions that, while considered reasonable by the Company, are inherently subject to significant technical, business, economic, competitive,