Business
  1. Home
  2. Business
  3. CBD
Save
Print
License article

John McGrath lashes mutineers but his investors can now join them

Colin Kruger, CBD

The tumult continues at the perennial real fixer-upper that is John McGrath's real estate shop McGrath Ltd.

Another profit downgrade before Australia Day has left the stock trailing a string of record lows in the lead up to its half year results to finish on Friday at 71.5¢ compared to an IPO price of $2.10.

Up Next

How to stop land rezoning corruption

null
Video duration
02:07

More BusinessDay Videos

null
Video duration
01:06

CEO discusses McGrath's future
null
Video duration
02:07

How to stop land rezoning corruption
null
Video duration
01:59

Uber rival Didi Chuxing worth $50 billion
null
Video duration
03:32

Is it time to dip back into risk assets?
null
Video duration
00:22

Thomas resigns as Ardent CEO
More videos

CEO discusses McGrath's future

Speaking to Fairfax in November, McGrath CEO Cameron Judson admits FY16 saw an unprecedented decline in volumes and listings, but predicts a more positive 2017.

And it is not just investors who have felt mutinous, of course.

The latest downgrade was caused, in part, by some of McGrath's top talent splitting ranks with the real estate guru and setting up their own shop under a new the banner: The Agency.

"The recent net outflow is more than we usually see, and we believe it prudent to alert the market to the likely impact," said the new CEO, Cameron Judson, in the January 23 update which informed the market that the second half results will be weaker than the first half and recent analyst estimates "look high".

According to a report on a memo to his fellow agents, John "Bligh" McGrath was more forthcoming on how exactly he felt about this mutiny.

Advertisement

"They actually started this process long before they departed and whilst we were paying them handsomely and confiding our plans with them," said McGrath in a report of the memo.

He said, "for that reason, I have zero respect for any of them."

Given the performance to date, CBD was not sure how "confiding" McGrath's future plans was going to have any effect other than sending them fleeing for the front door.

McGrath report that the "damage" will mainly impact its urban precincts "until we replace them (with better people with integrity I can assure you!)."

"The thing that annoys me more than anything else is there is sooooo many amazing stories of great success and personal growth inside the business and on behalf of our clients that this unsavoury group seeks to nullify and mask that with their dirty tactics and mudslinging."

What a pity none of this made its way into the ASX release.

If any McGrath investors feel like joining this mutinous crew, Perth financial outfit Ausnet Financial Services has a 12-month option to buy the The Agency's holding company.

Regulatory rivalry

Reporting season kicks into high gear this week, but there were a few gems in the first few days of the season.

The focus may have been on Tabcorp's disappointing results last week, but chief executive David Attenborough managed to find some solace in the shellacking the government is handing out to those British upstarts camped out in the Northern Territory – even alleged suitors like William Hill and Ladbrokes.

Attenborough mentioned that Malcolm Turnbull's government is expected finalise changes to the Interactive Gambling Act (IGA) which will more effectively corral competitors "who had been circumventing the law" with online in-play betting.

He also welcomed the success of South Australia government in implementing a point of consumption tax that ensures the online bludgers now have to pay tax in the state for bets placed from the state – not in the low-taxing Northern Territory where they are based.

"We encourage other state and territory governments to consider similar models," said Attenborough who obviously was not on the Christmas card lists of his online rivals.

Name check

It wasn't the way he wanted his first investor presentation to go, but for the new investor relations director at Charter Hall, Phil Cheetham, it will be a day etched into his memory.

Having been the senior analyst at Citi for many years, Cheetham was poached to the other side of the fence by his mate, David Harrison.

But when Cheetham last grilled Charter Hall over results, David Southon was also at the helm as joint CEO.

So perhaps Cheetham can be forgiven when he stepped to the podium at Charter Hall HQ, 1 Martin Place at last Thursday's investor day, and introduced his MD "Harro" as Southon.

CBD's spy said it was chuckles all round and a few "that's OK mates", but we are sure he will be given some pictures of Mr Harrison to take home and study in time for the group's half year results on February 26.

Got a tip? ckruger@fairfaxmedia.com.au