1H FY2025 Investor Presentation
1H FY2025 Investor Presentation
28 February 2025
1H FY2025 Investor 2 1H FY2025 Key Takeaways Presentation
Underlying EBITDA1 Revenues from Ordinary Activities (1H FY2024: $557K) (1H FY2024 : $43.9M)
Properties Under Management Estimated Net Assets 31 December 2023: 5,089 (30 June 2024: $36.80M)
Gross Value of Properties Sold No. of Properties Sold (1H FY2024 : $3.3B) (1H FY2024 : 3,115)
GCI3 No of Agents (1H FY2024 : $56.9M) (31 December 2023: 411)
1. Underlying adjusted for the impact of AASB16 Leasing Standard, Gain on Sale and other one off items. 2. Independent Valuation conducted by Pendium Advisory as at 23 August 2024 3. Gross Commission Income (“GCI”) is the fees the vendor pays for the sale of a property.
1H FY2025 Investor Presentation 3
Record transaction $3.6bn $60.9m
volume underpinned $3.3bn $52.9m $56.9m
$3.0bn growth in other $45.8m
metrics 316,068 2,910 2,847 3,115 3,311 $2.6bn
$38.1m 271,169 $2.2bn 266,598 260,470 236,535 2,407
Record six month result of 3,311 transactions under pinned record Gross Sale Volume and Gross Commission Income level.
Improved transaction contributions from East Coast states assisted the growth in Gross Sales Volume. Total Properties Sold in Australia* No of Properties Sold by The Gross Sales Volume Gross Commission Income ($M)^ Agency Group
1H FY21 1H FY22 1H FY23 1H FY24 1H FY25
* Source: CoreLogic Economist Park (Dec 2024). ^ Gross Commission Income (“GCI”) is the fees the vendor pays for the sale of a property.
1H FY2025 Investor Presentation 4
A growing brand with 464 agents with presence across six states and territories.
The Agency group of brands achieved #2 market share in Perth, Western Australia in CY241 with 9% market share in the Perth and greater metropolitan region where we operate.
Our focus to continue to grow our East Coast presence has resulted in our New South Wales business increasing to representing 26.8% of The Agency 1H FY2025 exchanges (1H FY2024: 25.7%).
1. Based on # of Transactions
1H FY2025 Investor Presentation 5
“When I wanted to start my own real estate “It’s really allowed me to run my business my way What do our business, I looked at the model and thought: this model works perfectly for me because I don’t have and to be part of a fantastic culture environment.” Bethwyn Richards – Property Partner, NSW Agents say ? to have a front of house reception, an operations manager, a marketing team, I don’t manage a trust “With The Agency, I get the admin side supported, account and best of all, I don’t have the Department and I get to just do the part that I’m good at, which of Fair Trading walking into my office to check my is connecting with people.” files. My focus is purely my clients that I look after.” Sabrina Bestel – Property Partner, Victoria Sunny Gandhi – Property Partner, NSW “The Agency provides you a model that allows you “I don’t think I’d have the same freedom to run my to grow your business. It’s got lots of flexibility on business the way I want with any other model how you do that: you are your own boss.” The Agency is the only direct premium national brand besides The Agency.“ Todd Brandon – Property Partner, QLD operating in Australia. All compliance and operations are Catherine Murphy – Property Partner, NSW handled centrally which reduces the cost of an agent “With the support and systems in place at The “It gives me the ability to do the work when I need Agency, from joining the industry with The Agency doing business, and minimise distractions to allow them to do the work. Whereas previously working for a six years ago, I now have a team doing a sale a to solely focus their attention on selling real estate. bigger franchise company, it was very strict in the day” way that your day is scheduled.” Team Rash – Property Partner, WA We are the first to recognise that the Agent is our client Luke Saville– Property Partner, Victoria “They really encourage you to step up and want to and our job was to help them do what they do best – achieve more.” “I’ve got great admin support behind me. So that sell and list property, and remove as much of the non allows me to do more what I need to do: go and see Stephanie O’Sullivan – Property Partner, NSW dollar producing activities, while assisting them with clients, get listings, prospect.” marketing and lead generation Jim Christou – Property Partner, Victoria
1H FY2025 Investor Presentation 6
Benefits of • The Agency is the only direct model with a national exposure which enables cross country referrals of clients and single process workflows that mean a client experience The Agency model does not change regardless if they transact in Rockhampton, Sydney or Perth. • In franchise brands where you’re very much hemmed in by certain postcodes, that’s not the case with The Agency. So our Property Partners are free to list and sell wherever they choose to. • When you become a part of The Agency, you join a community and a culture of motivated and visionary people and teams leveraging our resources, expertise and methodologies for success. • To achieve more as a real estate agent, you need to implement change in every element across the selling and purchasing journey. At The Agency you have the complete technology stack to do this, provided on Day 1, to enable you to grow and become more. Due to its scale, The Agency is able to offer • While agents can separately purchase an IT platform solution for each stage of the all agents a singular and consistent market purchasing journey, hire my own trust accountant, franchise an office, what they can leading technology solution at every stage of not purchase separately is The Agency workflows and API linkages between various the prospecting, listing and selling stage of SAAS providers through our proprietary data lake developed that enables efficient, consistent experiences for Agents clients. the buying and selling journey. • At The Agency, we adopt a progressive stance towards technology. As part of our approach, we implement end-to-end technology that streamlines the nurturing, listing and selling process for our agents. This state-of-the-art platform exemplifies our dedication to providing a seamless and efficient experience. • Our nationwide concierge agent support network further enhances our innovative practices and support, setting The Agency apart as a leader in tech-driven real estate solutions.
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Over 12,000+ investment $6.4m
properties managed $4.7m $5.5m 5,355 10,571 by The Agency 4,908 5,089 10,092 $4.1m
$4.6m $3.5m $4.1m $3.0m 3,601 3,398 $3.3m $2.5m 5,891
As at 31 December 2024, The Group managed 10,571 (31 December 2023: 10,092) properties on behalf of landlords. The property 3,601 3,548 management business is comprised of 5,355 (31 December 2023: 5,089) that are owned by the Agency and 5,216 (31 December 2023: 5,003) externally owned management rights.
Further to the above, at the balance sheet date, there was a contract to purchase a further 1,500+ management agreements by the external MDC Trilogy Group which once completed, will result in # of AU1 Owned Properties Under # of Total Properties Under Mgmt AU1 Mgmt Fee Income Total Property Mgmt Income which will be managed by The Agency under a services arrangement. Mgmt
Combined, the 10,000 plus managed properties collected $309m of rent in CY24 on behalf our landlords and represent an estimated $9 1H FY21 1H FY22 1H FY23 1H FY24 1H FY25 billion of Australian’s property investors wealth. Our national footprint enables 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.
1H FY2025 Investor Presentation 8
Gross Commission Income (GCI^) On Target for record $140m Current Run Rate FY25: $120M GCI^ in FY25, $120m GCI^ Current Run Rate
underpinned by a $102.5m (Agents: 393) $112.5m (Agents: 433) record number of $100m $80.7m $95.4m
property sales and $80m (Agents: 308) (Agents: 399) Current Pipeline growing market share GCI $20M $60m
$47.9m (Agents: 283) $40m Record GCI contributions from Tasmania, VIC and $38.0m Queensland contributed to a record Group GCI in FY24 and growing in FY25. (Agents: 272) $20m
$- FY19 FY20 FY21 FY22 FY23 FY24 Current Run Rate FY25
^ Gross Commission Income (“GCI”) is the fees the vendor pays for the sale of a property.
1H FY2025 Investor Presentation 9 • Structured to be able to be flexible and adopt to industry and agent demands and challenges. Unlike Franchises competitors who are restricted by franchisor relationships and existing Franchise agreements.
Why be a • Difficult to recreate by existing franchise brands who are limited by the franchise code and committed contract terms to pivot to a direct engagement model. Franchisees profit margins is Shareholder of being squeezed by higher agent commissions, higher operating costs and franchise fees attached to revenue (rather than business profit). The Agency? • Difficult to replicate The Agency existing licenses to operate a sales and property management business along with the knowledge of the operational requirements (and differences) with each state Office of Fair Trading which require state based oversight, residency and audits.
- Due to the predominance of the small family owner office within our industry, difficulty in replicating The Agency has an addressable commission market of $7+ billion a national brand and leadership team with experience of running a direct engagement model, operating nationally with 450+ agents and 12,000+ properties under management. and is the only listed residential real estate investment opportunity.
The Agency business is difficult to replicate a national brand • Geographically diverse sales business in each state provides exposure to each state’s economy. Establishment costs/investment of each state have now occurred, with each state now supporting quickly or cheaply due to a highly regulated industry at a state its own state general manager. In FYTD25 each state is delivering positive cashflow to invest in based level, making AU1 attractive for consolidation in the industry. future strategic objectives.
The Agency has had a growing off balance sheet asset base driven • Annual Recurring revenue of in excess of $10m from a geographically diverse property by Property Management assets that have been independently management portfolio that was independently valued at $36.32m at 30 June 2024.
valued at $36.32m at 30 June 2024. The directors value the business in excess of 5.5 cents per share. • Established external funding mechanism with Trilogy Funds ($2bn Funds under management) to acquire rent rolls ($40m+ of rent rolls so far acquired) under a Services Management Agreement that delivers earnings to The Agency (separate to our existing 5,000+ property managements)
- Creation of new brand/service offering model targeting offices that wish to remain independently branded
- Alignment of interests with agents and management team who own ~25% of the business.
1H FY2025 1H Investor FY2025 Presentation Investor 10 Presentation
We are a small Residential Real Estate $11.1 Tn
piece of a big pie Australian Superannuation $4.1 Tn
55.9% of Australian Household Wealth is held in Residential Housing with a $6.9 Australian Listed Stocks $3.3 Tn Billion annual addressable sales commission market.
Commercial Real Estate $1.3 Tn
Sales in FY24 Gross Value of Sales in FY24 CY25 Total Annual Addressable Market* (GCI)
Source: CoreLogic, RBA, APRA, ASX * Assessed at 1.50% Average Commission Rate of Gross Sales Volume of $459.2Bn. Number of investment Estimated Value of investment properties in Australia properties in Australia
1H FY2025 Investor Presentation 11
1H FY2025 1H Investor FY2025 Presentation Investor 812 Presentation
Business Performance Update Record GCI result After continued investment in recruitment activities, cost of doing business ratio decreased 89 basis points from 1H FY2024 to 1H FY2025 1H FY2025 GCI of $60.94m was a record GCI half for the company (previous record was $56.9m in 1H Continued efficiencies in the cost of doing business ratio is expected in 2H FY2025 and FY2026 as recruitment efforts FY2024 continue to grow Gross Commission Income.
Agent Mix and increased Property Management UNDERLYING1 UNDERLYING1 revenue driving Revenue growth
($M) Change During 1H FY2025, a higher percentage of sales by 1H FY2025 1H FY2024 employee agents resulted in Revenue growth above GCI growth2. Gross Profit growth exceeded GCI growth. GCI 60.94 56.89 7.1% Property Management Revenue grew from to $6.40m in Revenue2 48.34 43.93 10.0% 1H FY2025 from $5.52m in 1H FY2024, a 15.8% increase. Gross Profit 15.78 14.61 8.0%
Other Income 0.36 0.37 -3.8%
Operating Expenses (15.45) (14.43) 7.1% Investment in Recruitment initiatives
Cost of Doing Business3 32.0% 32.8% -89 basis points Significant recruitment initiatives continue to be undertaken, with formation of a national recruitment, new model concept (Rightmove) department in 2H EBITDA $ 0.69 $ 0.56 +16.2% FY2024.
1. Underlying adjusted for the impact of AASB16 Leasing Standard, Gain on Sale and other one- off items. 2. According to accounting standards, recognition of revenue is dependent on the engagement mechanism of the Agent. A sale by a payroll agent will result as revenue equal to GCI, with an agent commission expense in Cost of Sales. A sale by a non payroll independent contractor agent, revenue is equal to The Agency share GCI. There is no cost of sale expense for a non payroll agent. As a general rule, Western Australia agents are predominantly Payroll agents, while East Coast agents are predominantly non payroll agents. 3. Operating Expenses Pre AASB16 Leasing Standard as a percentage of revenue n.m – not material
1H FY2025 1H Investor FY2025 Presentation Investor 813 Presentation
Significant shareholder value growing off + The value attached to internally generated Property Management and remaining Mortgage book is not recorded in the balance sheet. Despite the value of the property Balance Sheet due to amortisation of rent management portfolio increasing in the period, under the accounting standard rules, the Profit & Loss statement for the roll asset due to AASB accounting six month period includes an amortisation charge of the externally purchased property management assets held as an intangible asset. This amortisation charge has resulted in standards a reduction of Statutory Net assets and results in an increase in assets not recognised in the balance sheet. + An independent valuation was undertaken at 30 June 2024 which valued the Property Management portfolio at $36.32m STATUTORY STATUTORY ($7.40m of this value was on balance sheet at 30 June 2024). The management fees collected by the company from ($M) 31 December 2024 30 June 2024 Change the property management portfolio increased in Q2 FY2025 compared to Q4 FY2024. While the Directors believe that the Cash at Bank 4.94 4.90 +0.8% increase in management fee income has increased the value of the property management portfolio, the Directors have -29.1% held their assessment of the value of the property Net Assets 5.59 7.89 management portfolio stable at $36.32m as at 31 December 2024 Another independent valuation will be completed for Assets not on balance sheet 30.86 28.91 +6.7% the Directors at 30 June 2025. + Only $5.46m of the property management value is held on Estimated Shareholder Net Assets 36.45 36.80 -1.0% the Balance Sheet as an intangible asset as at 31 December 2024 ($7.40m as at 30 June 2024), leaving $30.86m of shareholder value off balance sheet at 31 December 2024 ($28.91m at 30 June 2024).
+ Adjusting for these off balance sheet assets, Estimated Shareholder Net Assets has decreased 1.0% to $36.45m ($36.80m at 30 June 2024).
1H FY2025 Investor Presentation 14
Balance Sheet.
Statutory Statutory
($M) 31 December 2024 30 June 2024 Change
4.94 4.90 +0.8% Cash at Bank
15.23 15.00 +1.5% Other Current Assets
29.62 27.05 +9.5% Non Current Assets
49.79 46.96 +6.0% Total Assets
(37.05) (27.76) +33.4% Total current liabilities
(7.16) (11.30) -36.7% Total Non current liabilities
(44.21) (39.07) +13.2% Total Liabilities
5.59 7.89 -29.2% Net Assets
30.86 28.91 +6.7% Assets not on balance sheet1
36.45 36.80 -1.0% Estimated Shareholder Net Assets
+ Growth in Non Current Assets of $4,498k due to new leases signed in 1H FY25, offset by the net $2,250 depreciation and amortisation charge. Non current liability increase of $4,161k due new leases signed in 1H FY25 and accounted for under AASB16. + 1: An independent valuation was undertaken at 30 June 2024 which valued the Property Management portfolio at $36.32m. The management fees collected by the company from the property management portfolio increased in Q2 FY2025 compared to Q4 FY2024. While the Directors believe that the increase in management fee income has increased the value of the property management portfolio, the Directors have held their assessment of the value of the property management portfolio stable at $36.32m as at 31 December 2024 Another independent valuation will be completed for the Directors at 30 June 2025. Only $5.46m of the property management value is held on the Balance Sheet as an intangible asset as at 31 December 2024 ($7.40m as at 30 June 2024), leaving $30.86m of shareholder value off balance sheet at 31 December 2024 ($28.91m at 30 June 2024).
1H FY2025 Investor Presentation 15
1H FY2025 Investor Presentation 16
Expectation of strong growth underpinned by large addressable market
The annual value of residential real estate commissions is $7bn+. What to watch for The second and third largest states for # of sales each year are in the infancy and are expected to contribute meaningful growth in comings years. Increased number • Recruitment model in place and being expanded to target growth in quality agents in $7 billion + Gross Commission national market of quality agents • Management structure back in place to generate previously achieved agent and EBITDA growth • Strong office and infrastructure footprint across six states and territories
- Partnership with external rent roll funder to build sales market share and GCI growth
- Factualising cost of doing business ratio
- Increasing value of property management rent roll as rents continue to increase across the country
1H FY2025 Investor Presentation 17
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Profit and loss statement. UNDERLYING1 STATUTORY
($M) 1H FY2025 1H FY2024 Change 1H FY2025 1H FY2024 Change Revenue 48.34 43.93 10.0% 48.34 43.93 10.0% Cost of Sales (32.56) (29.31) 11.1% (32.56) (29.31) 11.1% Gross Profit 15.78 14.61 8.0% 15.78 14.61 8.0% Other Income 0.36 0.37 -3.8% 0.36 0.37 -3.8% Operating Expenses (15.45) (14.43) 7.1% (14.25) (13.30) 7.1% EBITDA 0.69 0.56 16.2% 1.89 1.69 12.1% Share of profit/(loss) from equity accounted investments 0.02 – n/a 0.02 – n.a Depreciation and Amortisation (2.25) (2.45) -8.2% (3.23) (3.35) -3.6% Share-based payments expense – (0.22) n.a. – (0.22) n.a Fair Value Gain/(Loss) on Financial Asset – – n.a. – (0.11) n.a One off legal fees2 – – n.a. – (0.32) n.a Profit/(Loss) on Sale of Asset/lease exit – – n.a. 0.05 0.05 n.a Other (0.02) – n.a. (0.02) – n.m EBIT (1.56) (2.11) +26.1% (1.28) (2.26) n.m Net Finance Income (Expense) (0.51) (0.56) -8.9% (0.79) (0.76) -3.9% Embedded derivative non-cash finance gain/(cost) – – n.a. (0.23) (0.50) n.m Net Profit/(Loss) Before Tax (2.07) (2.67) +22.5% (2.30) (3.52) n.m Income Tax Expense/(Benefit) – 0.40 n.m – 0.40 n.m Net Profit After Tax (2.07) (2.28) n.m (2.30) (3.12) n.m 1. Underlying adjusted for the impact of AASB16 Leasing Standard, Gain on Sale and other one off items. 2. Legal costs associated with The Agency Group’s intellectual property action against the company H.A.S. Real Estate, the registered owner of The North Agency. n.a – Not Applicable / n.m – Not Meaningful
Cashflow Statement. 1H FY2025 Investor 1H FY2025 InvestorPresentation Presentation 19 19
1HFY24 FY24 (Statutory) FY23 (Statutory) ($M) (Underlying)* (Post AASB16) (Post AASB16) (Pre AASB16)^ EBITDA 0.69 1.89 1.68 Change in net working capital 0.06 0.23 0.46 Net interest Paid (0.30) (0.34) (0.38) Net Cashflow from Operating Activities 0.45 1.78 1.76 Purchase of property, plant and equipment (0.17) (0.17) (0.21) Purchase of intangibles (0.21) (0.21) (0.11) Refund/(Deposit) for bank guarantees – – (0.00) Net Loans to other entities (0.03) (0.03) (0.06) Net cash received on disposal of asset – – (0.05)
Net cash (used in) / received from investing activities (0.41) (0.41) (0.33) Payment of principal portion of lease liabilities – (1.33) (1.36)
Net cash used in financing activities – (1.33) (1.36) Net (decrease)/increase in cash and cash equivalents 0.04 0.04 0.07 held
Cash and cash equivalents at the beginning of the year 4.90 4.90 4.63
Cash and cash equivalents at the end of the year 4.94 4.94 4.70
* Underlying adjusted for the impact of AASB16 Leasing Standard, Gain on Sale and other one off items. ^ This is a non A-IFRS measure Note – may not add through due to rounding differences
1H FY2025 Investor Presentation 20
Andrew Jensen Executive Chairman andrewjensen@theagency.com.au
David Tasker Chapter One Advisors dtasker@chapteroneadvisors.com.au
21 1H FY2025 Investor Presentation 21
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,