The newly minted board of embattled property agency McGrath Ltd has moved swiftly to slash its expected profit for the listed company.
In a statement to the Australian Securities Exchange on Monday morning, McGrath said it now expected the company to generate underlying profit before tax, depreciation and amortisation (EBITDA) of between $5 million and $5.5 million. This more than halves the figure (between $10.6 million and $11.6 million) it flagged only weeks ago in January when it announced almost the entire board and the company's chief executive would leave.
High-profile real estate agent John McGrath is the biggest shareholder in the listed company.
Photo: Daniel MunozThat would produce a "reported" EBITDA of between $1 million and $1.5 million after about $4 million in one-off costs. That compared to a prediction in January for full-year EBITDA to be in the range of $5.8 million to $6.8 million after one-off items.
McGrath shares fell 2.33 per cent to 42¢ when the sharemarket opened on Monday.
The drastic earnings reduction followed an initial review by the board and chief executive after their dramatic appointments last month.
"It is important that the market is aware of the right baseline financial position that appropriately reflects the current status of the McGrath business and trading conditions," chief executive Geoff Lucas said.
"The impact of reduced sales volumes has affected the company more significantly than the prior forecast contemplated."
Star real estate agent John McGrath is the co-founder and biggest shareholder in the business.
More to come
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