McGrath, one of Australia’s biggest listed real estate agents, is in crisis owing to the resignation of its chief executive and most of its directors on Monday following the latest in a series of profit warnings.
The company, which listed in December 2015 at the height of Australia’s house price boom, said on Monday chief executive Cameron Judson and head of corporate services Morgan Sloper would leave the company following a “structural review” of costs. Board member Nigel Dews has resigned and chairman Cass O’Connor, as well as non executive directors Elizabeth Crouch and Cath Rogers have announced their intention to resign, said McGrath.
John McGrath, the founder of McGrath, who sold a third of his stake in the company at the IPO earning himself A$37m, will assume the role of interim executive chairman.
The management and governance shake-up follows a horror run for the agency, which listed at a price of A$2.10. McGrath shares were down 7 per cent at 53 cents on the ASX at midday.
“The cost cuts have gone as far as they can while leaving the company with the resources to benefit from market improvements,” said Ms O’Connor in a statement.
A weakening Australian housing market has led to low listing volumes and a slump in company owned sales division, which has hit earnings.
McGrath said it anticipates full year earnings between A$5.8 to $6.8m after one off items. Stockbroker Bell Potter had forecast earnings at A$16.6m. Mr McGrath said he was disappointed with the performance of the company over the past two years and it was time for a new approach.
“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,” he added.