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McGrath seeks 'urgent clarification' of information from John McGrath

Embattled real estate agency McGrath is seeking "urgent clarification" from incoming executive chairman and founder John McGrath after becoming privy to information relating to recent media reports.

The company requested a trading halt on Thursday morning pending an "announcement regarding recent media comment in relation to Mr McGrath", after delaying a conference call with media and analysts to discuss its half-year results. "The event that will end the trading halt is the company issuing an announcement by Mr McGrath," it said.

It earlier reported a half-year loss of $25.5 million, which includes a $21.8 million goodwill impairment of company-owned sales.

"The company has become privy to further information, which I can't comment on, and is seeking urgent clarification from John McGrath," chief executive Cameron Judson said during an investor call.

"The board has considered this trading halt a significant development and let me assure you they have not taken this step lightly."

Mr Judson, who is leaving the company on Friday along with rthe head of corporate services, Morgan Sloper, with the rest of the board set to follow on Monday, said the board was doing everything in its power to update the market as soon as it could.


"An update is contingent upon John McGrath providing further information," he said.

Mr McGrath has been in the news recently, with Fairfax Media revealing that he has a $16 million gambling debt to a betting company run by bookmaker Tom Waterhouse, prompting shares in McGrath Ltd to fall sharply. Mr McGrath, 54, has denied having any gambling debt.

The ASX is also reviewing claims made by McGrath Ltd disputing speculation its Rich Lister founder has a $100 million margin-lending facility attached to his shares in the publicly listed company.

Tough period

The results and trading halt come at the end of a tough seven months for the group, which has been hit hard by the drop-off in residential property listings and its struggling sales division, prompting market suggestions it may announce it will privatise.

The company listed in December 2015 at $2.10. The shares, before the trading halt, were 42.5¢.

The company's chief executive and entire board, barring Mr McGrath, last month flagged plans to quit the company after its lower than expected earnings were leaked to the media.

Melissa Jones has been appointed transitional company secretary, effective immediately.


Mr Judson said the half-year earnings had been adversely impacted by the underperformance of its company-owned sales business, including project marketing.

As well as the impairment on company-owned sales, the result includes a $1.1 million goodwill impairment of property management rights.

Before the one-off charges, the group's statutory loss was $100,000. Revenue collapsed 23 per cent to $51.6 million and earnings before interest, tax, depreciation and amortisation fell 66 per cent to $3.2 million.

''Our annuity businesses, property management, franchise and Oxygen have performed largely to expectations,'' the release said.

''The company has now completed the previously announced restructuring of the board, executive and corporate functions. These changes have delivered annualised savings of $5 million and a leaner organisational structure. Other things being equal, this structure and cost base is consistent with the earnings guidance given on 22 January 2018."

More to come