The Agency Narrows Loss but Faces Challenges in Competitive Real Estate Market

Robust Revenue Growth Amid Market Momentum

The Agency Group Australia Ltd (ASX: AU1) has delivered a strong interim result for the half-year ended 31 December 2025, reporting an 18% increase in group revenue to $57.1 million. This growth was underpinned by a buoyant national property market and a 34% surge in gross commission income (GCI) to $81.6 million, reflecting heightened sales activity and improved agent productivity.

The company sold 3,703 properties during the period, a 12% increase on the prior corresponding period, with total property sales value rising 36% to $4.9 billion. This operational momentum was supported by a successful agent recruitment campaign, expanding the agent base to 474 and maintaining a strong pipeline of 3,709 listings.

Profitability Progress and Cost Efficiencies

Despite continuing to report a net loss after tax of $0.83 million, The Agency significantly narrowed its loss from $2.30 million in the previous half-year. EBITDA rose sharply to $3.53 million, an 86% improvement, while underlying EBITDA (adjusted for lease accounting impacts) nearly tripled to $2.06 million. The cessation of amortisation on legacy Top Level rent roll assets in September 2025 contributed an annual $3.13 million benefit to net profit after tax, enhancing the company’s cost structure.

The company’s balance sheet remains stable with net assets of $1.63 million and cash reserves of $4.47 million. The Agency also secured an extension and expansion of its banking facilities with Macquarie Bank Limited, including a $1.6 million growth facility, reflecting strong lender confidence and providing financial flexibility for future growth initiatives.

Strategic Focus on Agent Growth and Market Expansion

The Agency continues to pursue its direct engagement business model, which eliminates traditional franchise layers to offer agents greater autonomy and support. Investment in agent services, infrastructure, and training remains a priority to sustain productivity gains and market share expansion. The company’s property management portfolio grew to 12,413 properties, with over 5,499 owned management rights, further diversifying revenue streams.

Looking ahead, The Agency plans to leverage its strong market position to explore acquisitions of smaller independents and franchisees, capitalising on industry fragmentation. Partnerships with MDC Trilogy for rent roll acquisitions and ongoing technology innovation are expected to underpin future growth and operational efficiencies.

Outlook and Market Position

While the real estate services sector remains competitive and sensitive to macroeconomic factors such as interest rates, The Agency’s improved financial performance and strategic initiatives position it well to capitalise on market opportunities. The company’s ability to attract and retain high-performing agents, combined with a strong sales pipeline and expanded banking facilities, provides a solid foundation for continued growth.