The Agency
ASX-listed The Agency has had a strong year, and has big plans. Source –
  • The Agency (ASX:AU1) grew its profit five-fold last year, and has plans for growth
  • They had 0.85% of total sales in Australia, but made 1.3% of total commissions
  • With 300 real estate agents on board, The Agency should grow to 600 in a few years

The residential and commercial property market in Australia is worth a combined $9.5 trillion, which is more than three times the size of the ASX or the total amount in super, and four times the size of the whole economy.

Just one year’s growth in residential property worth is equivalent to 50% of Australia’s GDP.

So, property is big in Australia. Not only is much of our wealth tied up in property, everyone’s talking about it, and the next generation is wondering how they can get into the market.

The Agency

Established in 2016, listing on the ASX the same year, The Agency is a vertically-integrated real estate company.

What that means is that real estate agents can join the company, and get on and do what they do best – list and sell.

Everything from listing the property, to a multitude of admin, selling and finance tasks can be handled by the company.

The Agency also offers its agents higher commissions than the average real estate agency.

“There are companies trying to copy our model – but the simple answer is they can’t. They think it is all about offering higher commissions, but that is only one part of it,” said managing director and founder, Paul Niardone.

“To excel, agents also need high levels of support, which we offer in an efficient and effective way. We also have unparalleled national scale that creates industry leading efficiencies across our business.”

Paul Niardone, MD and founder

After a stellar financial year 2021, the company is now enjoying a strong growth trajectory.

The Agency webinar, with Tim Lawless, on the residential property market

Strong Returns

The company’s fifth of operations saw it return a profit (EBITDA) of $4 million, which was up from $700,000 the year before. The company owns assets worth $25 million, and has reduced its debt to $8 million.

The company is well poised to scale and grow, and add new agents. They have just opened their doors in Queensland, and still have NT, Tasmania and South Australia to get on board. So there is a lot of upside.

“Transactions drive the business,” said Mr Niardone. “We’ve grown to 300 agents, and our objective now is to grow this to 600 in next few years, and be worth 2% of total market. Good agents drive transactions, and this will grow the business.”

Group CEO Geoff Lucas came on board earlier this year, having previously been CEO of McGrath.

“We’re a truly national business; and that’s important, as outbreaks and difficulties in various places mean we can benefit from good growth elsewhere,” he said.

Across the country last year, there were 583,000 residential sales, worth a collective $376 billion. If we assume the average sales commission was 1.6%, then the total commissions income for agents was around $60 billion.

The Agency accounted for $80.7 million of that market (up from $47.9 million the year before), so they had 1.3% of total commission pie, despite only having 0.85% of the total number of sales.

“We are doing better than the average agency.

“We grew 57% last year thanks to a strong market, but the market grew 40.7% so we did better than most.

“We also have a rent roll (3,900 properties) & mortgage book worth more than $25 million.”

Geoff Lucas, Group CEO, The Agency

At the time of writing, The Agency’s current share price is 5.2c, with values the company at $25 million. They have $5.7 million in cash.

The Agency is a company investors might consider. Being ASX-listed, it is easy to do so.

“We are only five years old. Clearly, our business has a lot of upside,” said Mr Lucas.

For more information on The Agency, visit their website.


Before making any financial decisions, please do your own independent research, taking into account your own situation. This article does not purport to provide financial or taxation advice. See our Terms of Use.

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