THE ASX-listed real estate business McGrath (ASX: MEA), has been plunged into chaos after it was announced CEO Cameron Judson and the entire board, with the exception of founder John McGrath, will resign after yet another profit warning.
John McGrath will will take over as interim CEO after the company announced it expects full-year earnings before interest, tax, depreciation and amortisation (EBITDA) of between $5.8 million and $6.8 million.
McGrath had already revealed it did not expect to meet analyst expectations of $16.6 million in EBITDA because of slower-than-expected sales, particularly at its company owned agencies.
The turmoil has caused MEA's share price to plunge as much as 10 per cent in early trade to $0.52.
The shares were priced at $2.10 ahead of its market listing in December 2015.
John McGrath said Cameron Judson, who took over his role in August 2016, and head of corporate services Morgan Sloper will leave because the firm no longer requires their expertise in organic growth or merger and acquisitions.
Chairman Cass O'Connor said circumstances had changed since Mr Judson took over from Mr McGrath in August 2016.
"Cameron and Morgan were engaged when we anticipated a higher volume of corporate activity. Their skill sets are broader than the company currently needs," says chairman Cass O'Connor.
Agent departures and restrictions on foreign ownership have hit the agency, which was rumoured to be considering delisting from the ASX after it plunged to a $1.3 million loss in the five months to November.
"Like all shareholders I am very disappointed with the performance of the company over the last two years," John McGrath says.
"Now is the time for a new approach. Despite the challenges we have endured since listing, McGrath remains one of the best real estate businesses in Australia with outstanding talent throughout the company.
"I am very excited and proud to once again be leading the team in the future.
"Our investors and team have exhibited great patience and loyalty during this difficult time and I intend to work very hard to repay them for their confidence in the company.
"I have a clear plan to rebuild momentum but I will let our results speak for themselves from here."
Other departures from the board in include Nigel Dews who was appointed CEO of Message Media along with Cass O'Connor, and current non-executive directors Elizabeth Crouch and Cath Rogers who will resign following an orderly transition period. This period will include the release of the Company's Interim Results in February which is when John McGrath will assume the role of interim Executive Chair.
Business News Australia
Help us deliver quality journalism to you.
As a free and independent news site providing daily updates
during a period of unprecedented challenges for businesses everywhere
we call on your support