Listed property valuer LandMark White (ASX: LMW) was no stranger to the headlines during 2019.
The company was thrust into the limelight following two cybercrime incidents, the result of which slashed company earnings and saw its business suspended by major bank clients.
But at yesterday's AGM the chairman and CEO sought to put those incidents in the past and focus on a brighter future for the company.
"The last nine months has been a very challenging time for LMW as a result of the criminal cyber-attacks we were the victim of and the resulting impact on our revenue and profitability following bank valuation panel suspensions," says chairman Keith Perrett.
"But we are pleased that this is now behind us and believe that the company has come out of the adversity with extra strength and is well placed to return to profitability in 2020 and beyond."
Aside from the cyberattacks, a key highlight for the group was the acquisition of Taylor Byrne in October 2018, adding regional network and rural and agribusiness capabilities to the company.
The company also completed a capital raise of $5.4 million during FY19 following the cyberattacks to help get the group back on its feet.
Perrett says the raise enabled the company to recover from the cyberattacks and allow the group's share price to recover since its reinstatement in late August.
But ultimately the cyberattacks had a material impact on LMW during FY19; profit dived by 468 per cent, down from $4.1 million in FY18 to a loss of $15.1 million at the end of the last financial year. As a result, LMW was unable to declare a dividend to shareholders.
According to CEO Tim Rabbitt, if those cyberattacks had not occurred, LMW was on track to record a bumper $6.8 million profit before tax.
"We estimate that the bank panel suspensions cost us almost $10 million in FY19," says CEO Tim Rabbitt.
"[The bank panel suspensions] continues to result in lower revenues in FY20."
In the wake of the attacks Rabbitt says the company has invested heavily in cybersecurity to deliver "arguably the most secure valuation platform in the industry".
LMW is now protected by multi-factor authentication, anonymisation of data, encryption of data, increased restrictions of access both internally and externally, and the white listing of domains applications.
"Throughout the response to the criminal activities, our people have been incredibly loyal and have stood by the company," says Rabbitt.
"Unfortunately, some staff were forced to look for employment elsewhere as their take home pay was reduced."
"They did this reluctantly and we would not be at all surprised to see many return as LMW restores its market share and revenues."
While the storm of the cyberattacks might have passed, LMW is still staring down the barrel of a rough property market.
"The property sector is still facing headwinds and we do not see a significant pick up in lending/valuation volumes," says Rabbitt.
"Confidence is low as a result of the low interest rates, political issues globally and the ongoing scrutiny of the finance sector and lending in particular."
The CEO is optimistic in spite of the industry trends and expects to restore LMW to its position as a leading valuation business.
"Whilst we have been a little disappointed with the speed at which some of our clients have reinstated LMW on their panels, at this point in time we believe that we will achieve the forecast provided in our prospectus," says Rabbitt.
"This remains dependent on a number of factors including rebuilding our revenues to $38 million and we will be closely monitoring this through the coming months."
"I would like to reassure investors that, following the successful capital raise, LMW is in a strong financial position to rebuild its business through FY2020."
Business News Australia
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