REAL estate group McGrath Limited (ASX:MEA) has shaken off a tough week on the stock market with news that it has expanded its presence in Melbourne.
McGrath has secured two new franchise offices in Melbourne's south-eastern bayside at Bentleigh and at Croydon in the city's outer east.
The new locations, due to open in May, bring McGrath's growing network in Melbourne to four.
The Victorian capital is a prized market for the group's expansion plans, and comes amid revelations that its home market in Sydney may be coming off the boil.
McGrath shares this week have endured a rollercoaster ride after resuming trading on Monday following calling for a trading halt last week to issue a profit update.
A slowdown in Sydney's property market, and a fall in listings, has led the group to downgrade forecast revenue in FY16 to between $136 million and $140, down from a prospectus forecast of $141 million.
Pro forma EBITDA also has been revised down from $31 million to between $26 million and $27 million.
News of the downgrade sent McGrath shares tumbling to a low of 85.7c, down by a third of its previous close last Friday. The shares have since recovered strongly, closing on Wednesday at $1.125.
The shares were buoyed by news that CEO John McGrath had forked out almost $500,000 to acquire 555,000 shares in the company this week at an average price of 90c.
Meanwhile, McGrath says Melbourne remains a key focus for the group's expansion plans after first dipping its toe into the market last December.
"Melbourne is one of Australia's most dynamic property markets and one where we see great opportunity for our company and its clients," he says.
"Melbourne has continued to see solid growth over the past 12 months with gains of 9.8 per cent year on year which is the highest of any capital city, followed by Sydney."
McGrath Bentleigh has enlisted former Hodges agents Melissa Ryan and Peter Sinclair as principals, who will target Ormond, Bentleigh, Bentleigh East, Oakleigh and Murrumbeena.
McGrath Croydon will be led by former Stockdale & Leggo agent Paul Fenech. His turf encompasses Croydon, Kilsyth, Mooroolbark, Croydon Hills and Croydon South.
The new Melbourne offices will lift McGrath's network to 84 offices along the eastern seaboard.
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