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Real estate group The Agency's (ASX: AU1) shares surged 19 per cent after the company announced a solid performance in the March quarter backed by a booming property market.
The Agency has reported a 39 per cent increase in group revenue to $15 million for the period, with March alone accounting for a record $6.4 million.
The heightened activity has led to a 65 per cent increase in combined gross commission income (GCI) for the real estate network to $20 million, up from $12.1 million a year earlier.
The figures have delivered The Agency an unaudited EBITDA of $554,000 for the March quarter, bolstered by EBITDA of $807,000 recorded in March alone.
However, the group recorded net cash outflows of $641,000 over the three months, and its total cash position fell by almost $1 million.
The company says the quarter was impacted by a slow start in January and February, in addition to abnormal costs involving the defence of legal actions brought by former director Mitchell Atkins and his Magnolia Capital which agitated but failed to seize control of The Agency.
"When considering the seasonally quiet months of January and February, the March quarter 2021 results were positive and reflect the continuing growth of the company coupled with the rebounding property market nationally during the period," says managing director Paul Niardone.
"Results for the month of March were particularly encouraging, with a record revenue of $6.4 million and $9.3 million of GCI."
The news pushed The Agency's shares 1c higher to 7.5c by noon, edging the shares closer to the year's high of 9c.
The upbeat performance by The Agency aligns with similar activity reported by arch-rival McGrath (ASX: MEA). Earlier this week McGrath announced a forecast underlying EBITDA for FY21 of between $16.51 million and $17.51 million up from $3.7 million the same time last year.
The Agency secured 1,232 sales valued at $1.2 billion in the March quarter, up from 801 sales totalling $748 million a year earlier. Listings were also up from 1,001 to 1,299.
In a sign of confidence in the company's recent performance, Macquarie Bank has cut the interest rate margin on The Agency's debt facility from 8.5 per cent to 4.75 per cent.
The Agency owes Macquarie Bank $5 million, down from $12.1 million after it secured shareholder approval in January for an $11 million long-term funding package via a convertible notes issue to Peters Investments.
The private investment vehicle of Western Australian racing identity Bob Peters converted $3 million of its notes to shares in February, giving Peters Investments a 30.24 per cent interest in The Agency.
"With a strengthened balance sheet and improving financial performance, we will continue to work on delivering the best service to clients and customers nationally with a focus on maximising value to our shareholders," says Niardone.
Major milestones for The Agency over the period include an expansion into Queensland with a new Brisbane office and a new commercial division headed by former Ray White executive Mark Williams.
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