The McGrath Ltd (ASX: MEA) share price is booming today. At the time of writing, McGrath shares are up 14.8% to 66 cents apiece.
The surge comes after the real estate services company reported its half-year results for the period ended 31 December 2020 (1H FY21).
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Strong financials send McGrath share price soaring
McGrath reported revenues for the period totalling ~$56.8 million for 1H FY21. This is a 16% gain compared to the ~$48.9 million reported for the period ended 31 December 2019.
Across the half, company owned sales were a major factor in performance. McGrath advised that there was a 22% increase in the number of properties sold and a 7% increase in the average sales price.
The business earned a net profit after taxes (NPAT) for the period of $8.1 million, compared to a $1 million loss reported in the first half of FY20.
The company's underlying earnings before interest, tax, depreciation and amortisation (EBITDA) blew up a massive 317% compared to the prior corresponding period (pcp). Underlying EBITDA for this half was ~$6.6 million, compared to ~$1.6 million in the pcp.
This underlying EBITDA result is at the top end of the guidance that McGrath provided on 26 November 2020.
The company also announced a fully franked interim dividend of 5 cents a share.
CEO commentary
Reflecting on McGrath's results amid the challenges of COVID-19, CEO Eddie Law said:
The residential property market has proved to be very resilient during the ongoing COVID-19 pandemic, compared with other sectors.
Cashed up homeowners, many of whom are prevented from travelling either domestically and internationally, are now largely working from home and as such, are reassessing their lifestyle and surroundings. This is positive for our industry as it results in homeowners either transacting or improving the asset value of their current home.
Despite a challenging year navigating the various lockdowns, McGrath has demonstrated our ability to continue to transact successfully and efficiently should further COVID restrictions are deemed necessary in the future.
We are very pleased as foreshadowed at the AGM, to return to the payment of dividends to shareholders as the business continues to recover and grow.
McGrath share price snapshot
McGrath has a current market capitalisation of $95.9 million. There are 166.8 million shares outstanding.
The McGrath share price zoomed as high as 74 cents during trading today, the highest price it has been since 11 September 2017. Year-to-date, McGrath shares are now up by 43%.
