The Agency Group Australia (ASX:AU1) is running the ruler over of up to twelve acquisition opportunities as it aims to be the fastest growing real estate brand nationally following a strong March quarter.
The opportunities form part of the all-in-one real estate and financial services company’s aggressive national expansion which includes the pending merger of fast-growing east coast real estate agency Top Level Real Estate.
The company is currently progressing talks with a number of top-tier advisers to raise additional funds above the previously reported minimum $10 million to progress these opportunities.
Up to twelve potential opportunities are currently being evaluated from a strategic perspective, which will increase its agent numbers and contribution to EBITDA.
In addition, by seeking additional funds as part of this capital raising, the Company said it won’t need to go back to the market in the foreseeable future to raise additional capital to progress its acquisition strategy.
The aggressive acquisition strategy is to take advantage of a rapidly changing real estate market where both principals and agents under large franchise chains are looking at moving away from traditional real estate models, the Company said.
“Agents are forcing change as they want far greater value for their efforts, higher revenue splits and a much broader value proposition in acknowledgement of their results,” the company said.
Success of The Agency model is based on addressing the needs of the agents and providing them with the opportunities not currently offered in traditional real estate structures. The Agency is disrupting the traditional model by reducing structural layers and focusing on the agent rather than the brand – providing a significant value proposition compared to the traditional model.”
The Agency – which has recruited a large number of big-name real estate agents across the country – continues to receive enquiries from agents and real estate firms across Australia who are attracted to the model.
The combined entity remains firmly on track for 300 recruited agents nationally by July 2018.
Meanwhile, during the March quarter, The Agency successfully acquired and integrated Sell Lease Property (SLP) into the business.
The benefits of this tie-up were highlighted in March when The Agency and SLP in Western Australia ranked first and second respectively for top office in the state and in the top five as a marketing group in the state (REIWA Numbers) as had been the case in January and February.
The Agency reported 64 sales valued at $44.9 million while Sell Lease Property had 55 sales valued at $28.5 million during March.
Total revenue for The Agency Group (WA) came in at $10.6 million for year-to-date March Quarter 2018, on target for approx. 40% growth year on year.
In terms of real estate commissions only in WA, revenue was $5.72m YTD for March Quarter 2018, on track for 100% year on year growth.
Cash receipts for March were up 10% to $4.2 million.
Top Level has achieved exceptional results for the year up to 31st March 2018 with total sales of $695 million, total commissions of $10.2 million and 380 settlements.
During the quarter, the Company assisted with expansion into the key market of Melbourne with the opening of a new office in the prime inner suburb of Albert Park.
Shares in The Agency were trading today at 1.5c.