Via the AFR comes Su-Lin Tan with the leaking of internal McGrathmaggedon documents:
They show McGrath Limited was targeting a $3.3 million net profit after tax between July and November 30 but instead sunk to a $1.3 million loss as it suffered from falling commission income from residential house sales.
…The internal documents show McGrath missed its internal forecast for earnings before interest, tax, depreciation and amortisation (EBITDA) by more than 80 per cent in the five months to November to generate $1.3 million instead of $7.8 million it had earlier expected. This compares to EBITDA of $15.6 million for in fiscal 2017.
The board, led by chairman Cass O’Connor, indicated the company might miss analyst targets in a recent trading update to the market on November 6.
At the time McGrath said EBITDA would be more likely 25 per cent below Bell Potter’s forecast, or $12.5 million.
“FY18 earnings could be 20 per cent to 25 per cent lower than the current analyst estimate, due to high restructuring charges and a partial year of cost savings,” the company said.
While earnings are not linear throughout the year, the bulk of the group’s earnings mainly from bumper spring season trading should already be accounted for in the November year-to-date figures.
It is understood the board were aware of the deteriorating results before Christmas and they were also aware at the time of the November update.
…It is understood there has been infighting within the board, as well as threats by the board to resign en masse over the Christmas holiday.
Time for an ASIC investigation.
I guess the “handsome” McGrathmaggedon’s “big short” celebrated by Ms Tan just two months ago as coming to an end has further to run after all.
