The Agency Group Australia Limited (AU1) Earnings Call Transcript & Summary

Good morning or afternoon wherever you are, and thank you for joining us for today's investor webinar for The Agency Group Australia, which, as you know, ASX ticker code AU1. I'm David Tasker and I'll be your host for today's session. We're pleased to welcome both Paul Niardone, Executive Director; and Andrew Jensen, Chairman, who will take you through the company's August 2025 investor update. Today's presentation will give you a detailed look at the full year '25 performance, strategic initiatives across sales and property management and importantly, what lies ahead for full year '26 and beyond. Before we begin a few quick housekeeping items. Today's session is being recorded, and a replay will be available shortly after. We'll hold a Q&A session at the end of the formal presentation. [Operator Instructions] We have received a number of questions already, and I will be putting those as a priority through to Paul and AJ, but any additional questions, please send them through. If we run out of time, we will make sure we capture the questions, and management will respond to them over the coming 24 hours. So we will get through as many as we can. With that, I'll now hand over to Paul and Andrew to walk us through the August 2025 investor update and what lies ahead for The Agency. Paul. Andrew, over to you.

Thanks. Thanks, Dave. Well, thank you, everyone, for joining us. I know we've got a mixture of existing shareholders, hopefully, potential investors. And so some of you have been through and know the story very well. Others, this might be the first time you hear it. As Dave said, the presentation's already posted on the ASX. So we're not going to go through word for word but more give you a feel of where the company is at and where we're heading to. So if we go to the first slide, Dave. Okay. So thanks for that, Dave. So as it says at the top, we're a unique -- we're a direct model. We're not a franchise. The agents work directly for us. So it's not a very usual model that exists in the Australian market, but it has some benefits in doing that. It enables a seamless client experience, these cross-country referrals. And not being a franchise, we're one team. So most franchises or models that have offices, usually, there's a strong competition between the offices because they're in neighboring suburbs, and sometimes it's crossover. What we've had with The Agency is the group works as one team, and this has been a great benefit to the culture of the company. So we're not restricted by postcodes. As I said, we work with databases and people being able to sell freely across the metropolitan or country areas. And we're a performance-driven culture. We have multiple events that involve our agents and award nights to show them how they're performing. Our tech platform also gives them that performance and allows them to do their own budgets and modeling and see how they're tracking. One of the other benefits, of course, is the data lake. So the data lake is a single data lake that comes nationally. So that allows us to interrogate it better than most people. Again, if you look at a franchise model, the data sits in the franchise office, with us. The data lake sits nationally and centrally. So we can look at how we can look at that through -- in improved lead generation, improved services and communication with the clients. Again, one of the things that we've always said about our model is that the agents are our clients and the vendors are the agents' clients. And so our job is to be able to deliver the appropriate support at tech and lead gen for the agents. All right. Dave, can we go to the next slide? Okay. So a bit of a breakup of how we are spread nationally. So again, as most people know, the model started in WA. So we've got a bit of a head start, and that will show later on in terms of market share. We have obviously residential sales, property management. We had a mortgage business that now is a joint venture with Oxygen, which we were happy to announce last year. And that has given us this national spread of the mortgage business. It used to be just in WA. But now we're working with the Oxygen team to expand that nationally and get our agents to be able to refer to the Oxygen, the brokers. We are looking at the same with conveyancing. At the moment, conveyancing is in WA. Like our mortgage business, successful, a very profitable business, and we're looking to do a similar model that we did with Oxygen and hooking up with a national partner that allow us then to offer the settlement and conveyancing service to our entire team. Again, as I said, we're one1 team, which is, I think, a massive difference. We're not a franchise. We work as one, and through that, we're able to attack the market as one company. The market is big. You've got the numbers there, $7 billion in gross commissions. And as you know, last year, we finished up with $125 million in GCI, so there's still plenty of room for improvement. The market is also highly fragmented with the largest player in the market share being Ray White with 9%. Also, the property management market is very large. And The Agency at the moment has a portfolio that's valued at $37 million. Again, as most of you know, most of that value is off balance sheet due to the accounting standards but that we have a healthy balance sheet because of that valuation. Our operational cash flow is now being used to fund growth initiatives. We've always said that we wanted to be a national business. We're in every market now except South Australia and Northern Territory, as you can see in the gaps. We get many requests to go into those markets, but we're now -- having built out WA and New South Wales, our focus is now building out Queensland and Victoria. And I think now we've got the platform in place to increase that revenue and build that market share in those states. We've also got, as I mentioned, the strong balance sheet behind us, we're cash flow positive and we've got a great experienced management team now to execute it and to move forward. So in WA, we're at 168 agents. You can see in New South Wales, it's 193. One of the things that we've decided to do is clean our roster last year, and WA probably was the one that needed the most cleaning since we've been around the longest. And it's just, I think, a natural attrition that occurs in the 7 to 8 years that we've been running. People were getting close to being semi-retired. People's lives have changed or they're wanting a lifestyle change. But we thought it's now important that we present to the market and the brand a certain type of professional agent. So we're looking -- we're enforcing our minimum requirements of GCI for agents. We're recruiting people that are doing $300,000 plus. We're getting that experienced agent because we think that adds to the brand that we've got, which is a premium brand, and that's the brand we want. We don't want to become known as the brand that people come to retire at all. As I said, we're performance-driven, and that's part of our culture. Thanks, Dave. Okay. So why be a shareholder of The Agency? Again, on the left-hand side, we've mentioned the strong balance sheet. It's a big market. We think there's opportunities in both the sales and property management side. We will talk about our joint ventures in the property management and our view to expand that and the opportunity then to unleash that value that's off the balance sheet and use it positively. We've been using our revenue, as I said, to fund growth. We're focusing on Queensland and Victoria in getting that. We've focused a lot on IT, both in the sales side of the business and in the property management side of the business. We now have a great support service. We have a good team that's offshore in our sales support. Our agents always tell us it's the best sales support that they've ever come across and that they've used. And our motto there is to do everything that's a nonproductive task. So we want them to focus on listing, selling and managing the vendors -- managing their vendors. So our target is to do $200 million GCI. We've always said that, and that's what we're -- we want to try to reach. And we've got a slide at the back showing our run rate and how we're performing. It's good to know that we've grown pretty much every year since we've been in existence. I think there's only 1 year when the -- just when the interest rate started to kick in. That became a very tough year. But every other year, we've grown in both our agent numbers and our GCI. And now we're the only listed residential real estate investment opportunity. So for investors that want some coverage in the real estate market at the moment on the ASX, we're the only opportunity to do that. On the right-hand side1, I mentioned we're flexible model. So even though we're growing, again, one of our mantras is to be flexible and to move as the market dictates, and having the agents work directly for us allows us to do that. So we don't end up having franchise law and franchisee disputes. When we want to replicate or implement something, we can do it directly. Hence, one of the other benefits that we've encountered is that we have very good relationships with the IT teams at both REA, Domain and CoreLogic. So when they were looking at a new application or a new idea that they want to implement, we normally get a call to see if we can be one of the test models. So at the moment, we're at 440-plus agents. We've got over 12,000 properties, and it's growing, which is very pleasing to see. Year-on-year, our property management business has been growing 15%. I think we collected just under $300 million in rent, which just gives you a bit of the size and scope of what we're dealing with, which is fantastic. And that produced probably a revenue of around $13.5 million. One of the exciting aspects of our rent roll is the strategic partnership with Trilogy that's now been running for probably just over 2 years, nearly 3 years. And we've learned a lot from that exercise and having that rent roll fund. And this is one of the opportunities we see as one of -- our main priorities going forward in this financial year is how to expand that and grow that opportunity in having a rent roll fund. Now as I said, we'll talk about that a bit later on, but that is a very important part of what we're looking to do this financial year. One of the others is we've got a new model coming out. It was called the RightMove model. It's been rebranded. What we found out that we were -- when we were recruiting, there was people that were wanting to -- a new start but wanting to have their own brand but were wanting to have that support service and technology that The Agency provided. So we've decided to take that into account and grow that. It also started with the fact that here in WA, we had a second brand called SLP, which we wanted to phase out and rebrand, and we did that. We also -- that also led to us developing a new technology platform for these guys, which is now complete. We've been testing that for the last 6 months, and the new model is ready to roll out in the next 4 weeks or so. Next slide, Dave. Okay. So here, we've just got some financial takeaways. Again, I'll just do a quick summary from the left-hand side. So we finished up with $1.12 million in EBITDA. So again, just to put some meat around that number. We've been spending on fixing up our recruitment services, looking how the onboarding is done in a better way. How do we utilize technology in doing that? We've been spending on technology platforms, as I said, both in sales and property management. If we're looking at growing the property management side and the fund, one of the things that we have to put in place is that as you acquire these businesses in property management, everyone's got a different way of doing it. So we've been building a model that centralize it and it makes it The Agency way across the country. And on the back of that, we've streamlined the process. There's a lot of duplication in property management. We've created our own platform for our property managements here in Australia to use. But also with the support services overseas that they can follow and now a lot of the admin and repeated tasks is done overseas by the support services. Right. As I said, nearly 12,000 properties now and growing, which has been fantastic. We sold $7.4 billion worth of property, $125 million worth of GCI. The net -- combined revenues of the group now is $98 million and growing. It was up from $87 million. So all the numbers are up in terms of the number of properties sold. The only one, as I said, that's down, is the agent number because we did do a cleanup of the roster, and that also allowed for other agents. So one of the other reasons we did the cleanup of the roster is we were finding out that agents that were wanting to join us would look on our website and see that there was an agent already in their area, so would hesitate in giving us a call. So by getting the nonperformers or -- and I should say the sort of semiretired, when I say they were good performing agents when they joined to move on, it's opened up those areas for new people to come onboard. Next slide, Dave. Okay. So now we're going into some of the numbers, and AJ will be jumping in. But here, you can see the gross commission and the increases that we've had on year-on-year and more importantly, the operating expenses. And you can see the difference that last year operating expenses only increased 4.9%, while our GCI went up 11%. So we've been keeping a very strong eye and look at our operating expenses. We've trimmed a lot of fat from the previous year, but as I said, but on top of that, we've then increased our spending in things like recruitment, IT and marketing. AJ, did you want...

I want to just add to that, Paul, if that's okay. I think one thing we need to notice is that the business made a $440,000 loss the year before. We've now turned that around to obviously a $1.1 million profit, and that's off the back of you've seen your GCI increase from $112 million to $125 million. So as you'll see, this GCI increasing, it's going to hit your bottom line directly while we're still trying to manage our cost structure. And that's what this graph is really demonstrating, that we've got our costs under control. As we continue to increase our agent numbers, increase their productivity, continue to increase our GCI and obviously continue to perform on our property management business, it now falls to the bottom line on an EBITDA piece.

Yes. And so one of the things that I forgot to mention in that as well in the previous slide, in -- our agent and productivity is now at 80%, which is unheard of with -- in terms of most brands because of that -- also the cleanup that we did. But also importantly, we had an independent group, Culture Amp, to come in and do a survey of our agents and a rating score. And we had an approval rating of over 80%. Now on average, in most companies, Culture Amp informed us that rating's usually around 70%. So they thought our scores were exceptional. And I think this also goes to against -- shows -- sorry, that when our agents are approached and one of the good things is our agents are constantly approached to leave. They're offered money to leave. They usually get on the phone to me and AJ to let us know that they've had a call, but very rarely have we lost agents to competitors. Next slide, Dave. Okay. So here we go into a bit more detail. AJ, did you want to talk?

Yes. Look, I think the most important thing is that we've increased our profitability off the back of our residential sales business 84% of our total revenue. It was actually the same last year as well. So that is staying consistent on the back that our property management business has got now recurring revenue of over $10 million a year. Obviously, recurring revenue is a key part of any real estate business and the rent roll plays a pivotal part to that. What we are seeing on our sales business is that we are seeing that productivity increase per agent. And that is the basis we have had a bit of a cleanup but also the refocus that we are focusing on those agents that contributed a GCI component of more than $300,000, where previously that had probably been a lower number. And we feel that -- and from internally, from we're talking to our agents, et cetera, the $300,000 is a key number for us moving forward. So our agent numbers might not be as aggressive growing, but our GCI is growing a lot more rapidly because we're putting on those more experienced agents into our business. When we look at conveyancing revenue, look, we did 1,800 transactions last year. This business actually did contribute around about $800,000 EBITDA. As Paul touched on, we're looking at a joint venture with an alignment with a group in the eastern side of Australia, which we'll be launching in the next 2 months, which will actually start providing good profitability straightaway to the bottom line under the arrangements we've done and we use the infrastructure that we've already gotten, landmark on the West Coast. So this is another revenue and EBITDA opportunity for the group. Just on property management, we're now at nearly a 24% EBITDA margin, which is pretty rare for a business that's on our size at 5,500 that we actually run and own ourselves. On that number on its own, we continue to grow it organically. We do have opportunities in the market to vendor finance some rent rolls, mainly because we're now at a position where agents do want to join us and they want to build up a rent roll of 50 to 100 under management but then realize that they actually lose money unless they get to a couple of hundred rent rolls under management because of the costs associated to it. So that rent roll, we do believe, will grow over the next 12 months and will continue to improve its financial performance. Move to the next one, Dave.

And on the property management and the conveyancing, one of the other important is that those numbers are growing and the referrals are coming predominantly from our teams. So the fact that the property management works and the model with [ MD ] works is because the fund -- the rent roll is being topped up with referrals from our team constantly. And this is an important part of what makes that fund work, is that the asset doesn't decline. It's actually growing because our rent roll will have natural sales from it and churn. So to be able to make up that churn and grow from your team is very important. And the same goes with our conveyancing. We get a good referral rate from our agents. The reason we did the Oxygen deal was to still -- but mortgage broking is a lot more competitive in the market, but it works both ways. For example, they've now -- Oxygen has got a great product in -- for financing superfund purchases and our agents that we're working now for our agents to take advantage of that when they're looking at investment properties that are being bought under superfunds.

I might just jump on this slide. So as we're showing here, the total properties sold in Australia did go down there for a period of time. But back to Paul's point is that we've continued to grow year-on-year based on properties sold. That's because we are taking market share in the market. I'm happy to say that we're the only group that's in the top 10 from a branding position in 9 years. There's no other group that's done it as quickly as that, that we're aware of. In fact, the one that's closest to us is 25 years older than us. So for some -- a company in its infancy to be in the top 10 in Australia from a branding real estate residential sales and property management business just demonstrates our growth that we've achieved in such a short period of time. And I think the last one, another group is 2016, who's in the top 10. So -- sorry, 2016 and 1991 was the other brand who's in the top 10. So it just demonstrates that we've got there a lot quicker. We've obviously invested a lot of money to get there. It does demonstrate we're still in our infancy and still growing, and we still got a lot of opportunity ahead of us. Next slide, Dave. Probably the important one here is to demonstrate where our current run rate is. At the moment, based on where we finished the year, we finished very strongly. We had a good second half to FY '25. We've started strong in the first 2 months. I think the market is obviously assisting that. However, we've also had more productive agents on that were recruited in the last 6 months that are now producing numbers for us. Our run rate at the moment is around $137 million. That excludes any new agents that we might have put in the last 3 months and any agents that we continue to put on during the year, this financial year. So at the moment at $137 million, we obviously -- we are factoring in that, that GCI growth will once again contribute to positive EBITDA along with other avenues that we said that we're introducing such as East Coast conveyancing and an increase in our property management. Was touched on the $150 million. That's one of our short milestones. We've got 3- to 5-year plans. We believe that the $150 million is a plan that we see short term based on where we're heading at the moment. And we believe the $200 million can still be achieved by just working on the states that we're currently in. So there shouldn't be a requirement to spend more infrastructure to go into new markets like South Australia and the Northern Territory or New Zealand, where we do have the trademarks. But at the moment, we just -- core focus is still that we've got an opportunity to grow even in our primary market, New South Wales. Paul didn't touch on we are #2 in WA. That's where we do believe that having another brand offering or another offering from our actual solution to agents to enter markets that we're already in, which we'll be launching shortly, will provide even another scope to increase on our run rate. Next slide, Dave. What this is, is basically just demonstrating what I spoke about. We're still very strong. 87% actually of our total turnover came from the states of Western Australia and New South Wales. We believe that will be down to about 82% based on the growth we've already achieved in Victoria and Queensland in the first couple of months of this year. It is in its infancy. We've got new GMs in those states. We do start -- we are seeing some significant upswing. Obviously, Victoria in itself, the market has come back to normal reality in relation to where the market should be sitting, and we're starting to see some really good transactions come through Victoria. We actually -- 3 of our agents that we reported on in the last 12 months actually do have #1 market share in those markets that they actually operate from, which is a difficult market in Victoria, because predominantly independent brands and the smaller boutique brands. But it does demonstrate The Agency now is starting to get a position where it is a recognized brand in Melbourne, and we're starting to attract more agents to us, 1.3% from a national piece that, as I said, puts us in the top 10, if not, the top 8 and we continue to grow that and evolve.

I think the fact that we're national and there's a spread, again, New South Wales market at the moment is doing very well. For those that might not know WA, so WA has gone from 12,000 -- an average of 11,000 to 12,000 listing to the report was 2,980. So it's been a massive drop. It's been that way. It's been happening over the last 3 or 4 years. But unfortunately, it's continuing to drop. So in the last 12 months, it dropped from the previous level 20%. And we're still maintaining our listing levels and sales pretty accurately, so -- and that's by getting more market share.

Next, Dave. All right double-digit income, property management. As I spoke about, our EBITDA is around the 24% on our business in property management. And that graph is basically just demonstrating that we've got 5,500 of our own on our balance sheet. And then we've also got our relationship with MDC Trilogy, which is another 7,000 roughly that we've actually got under a management services agreement, which has got another 2.5 years to run. And they are obviously outperforming what their expectations were. We believe that that's still got some opportunities for growth with us. They've got funds to deploy. We work with them in relation to other opportunities. They're obviously based on the yield play. The relationship for us is based on a sales play. We obviously do get some income uplift from the management service agreement, but predominantly, the reason why it's an attractive model for us is it helps us grab sales market share in the industry, which we did in the inner west of Sydney, Rockhampton. We're #3 market share in Rockhampton because of this relationship. So the MDC piece is a really important piece. And what it has demonstrated to us in the last 2.5 to 3 years is that this fund is a possible opportunity for us to look abroad not just from one fund but other fund sources. We are looking at it because, obviously, it's an opportunity where we see significant market share grab for us from the sales piece. Not only that, we're the only property national brand that can demonstrate and execute such a plan. We have obviously agents and property management teams around the country. They're all predominantly under one brand. It's segmented like a franchise network, where they have their own property management team in each office. We have one property management team nationally, even though they're in different states. So the only one to be able to execute such a service arrangement would predominantly be us. The most important thing for any kind of property funds business is to make sure that you replenish any churn. And to do that, you need sales agents. And that's obviously what we've got, and that's what the attraction was from MDC Trilogy, was the ability for us to continue to sustain the growth in those funds that they've actually acquired.

I think, AJ, we've actually demonstrated that in the last 2.5 years, and MDC has demonstrated that to their investors with the returns they've provided. So I think we are the only company that's done it.

No, you're right. Next slide, Dave. I might just whiz through these. I think we just touched base on that. Look, obviously, if there is opportunities in the market, you can see there that we're not in Queensland. We are -- we do have capacity to do something in Queensland. I know MDC Trilogy are also interested in doing something. However, we as a group [ solidly ] would like to be in Brisbane itself. It's a growing market for us. There is a lot of opportunity for us in Brisbane, especially with grabbing GCI growth as well. So we do have now -- we're looking at opportunities at the moment that are in front of us. Next slide, Dave. I think we can just say about the services arrangement, the property management assets. As I touched on and Paul touched on, The Agency is seeking similar partnership arrangements. We're positioned to support those. But not only that. We're actually the only business that can probably look after a national aggregation channel referral system. We have financial planners and mortgage brokers that is harder for them to obviously execute such a strategy. When you have to go to each individual office in each state, we actually can just go through one source, and we can actually refer to the best property management team in those markets. And we manage it centrally rather than being managed by multiple avenues and multiple territories. That gives us an ability to talk to multiple groups in this space, which we will probably be in a position to announce something over the next 3 months in relation to a proper opportunity and will see us help replenish our churn on our rent rolls but also see it grow organically.

And we've learned a lot from the last 2 years. We've refined the model, and we've also had the model now independently verified by independent accountants.

Next slide.

All right. I'll take this. So as I said, we started from -- predominantly from WA and the need to look at moving agents in the SLP brand that joined us almost the year after we started. We were getting, as I said, inquiries by people that wanted our support, wanted our back office that they had heard about but wanted their own brand. So this model has been predominantly set up to go to -- for a franchise that sees no value being in a franchise anymore that wants to take down that sign, put up their own sign and then also get the benefit of having our centralized support, centralized property management. So -- and the offering that we've done is everything from trust accounting to running their office to property management to sales to sales support to HR and legal. So it's a full gamut of service for a group that wants to move or a group that wants to set up a new company and just want to focus on what they do best, which is listing and selling. So we've been building the platform out to be able to incorporate all these things. But apart from the support platform, it's the reporting platform. It's a platform that allows them to put their own brand on it. So there's minimal connection back to us and allows them to manage and run whether it's 1 office or a group of 10 offices that are independent. They'll be able to come and use this technology. And as I said, if they don't want to run their rent roll but want a rent roll, we can do that for them. So these are the little differences that's not available to others out there. We've already got a group in New South Wales. So again, in building this platform, we have to build a platform that catered for the legislation in each state, whether it be it in sales or property management. That's been done now. And we've been trialing it now in New South Wales. We have one person in Queensland and obviously, in WA. We've been looking at the branding. We did have the RightMove branding. But again, in the trial, most people would prefer to have a connection with The Agency rather than a new brand called RightMove. So we're looking at how we change that and repackage that. But now we're confident that we're ready to go. So we've not had any large issues with tech. We always wanted to make sure that if we're going to roll this out nationally, it's got to be working smoothly. And in 6 months' worth of testing, we're now confident we can go. And this will just be another string in our bow that when we're talking to agents, right, we have 2 options: you can come into The Agency, or you can set up your own brand and have the benefits of the support from The Agency.

Thanks, Dave. Look, the performance, I think we've touched on this. You might just skim over it. But as we're saying, the cost of doing business is coming down 32% from 34%; EBITDA, $1.12 million. And as I mentioned, it is off the back of the GCI. We are seeing revenue growth of 12%, and that is falling to the bottom line based on the growth that we've now done. The fixed cost structure is there. Obviously, we're always going to have cost increases with premises, et cetera, 4% and pressure on wages, for example. However, that growth continues to fall to our bottom line, which is demonstrated in those 2 numbers there. The agent mix is obviously a really important piece for us from a revenue growth, scalability as well from our perspective. The way the matrix works is the performance on the WA market, the revenue is basically treated at 100% compared to the East Coast where we actually have an independent contractor model versus employee on the West Coast. That's probably one of the reasons why the revenue discrepancies when people look at it. But on that, our revenue has jumped up by 12%. As we talked about the investment in Queensland and Victoria to build market share, we have deployed OpEx to focus on these markets because we believe there's significant upsize on those. I can say they are profitable in each of those states now. However, the benefit that we've got in front of us is the fact that we've actually taken a position with some key agents, which those agents are now helping us build a brand and presence in those markets, which we can now build upon.

And again, in that operating expense, just to remind people again, even though it's come down, we've probably spent an extra $1 million on our recruitment and our tech to get the platform ready for further growth.

Next slide, Dave. Okay. So our balance sheet, our cash at bank is a strong position at $5 million. One piece that -- from the balance sheet point of view, which is -- always makes it difficult, the balance sheet, we've been amortizing a rent roll, and that obviously impacts our net profit position as well. Any assets that rent rolls we acquire under the AASB accounting standards, you do actually have to amortize them over a 6.5- to 7-year period. That will actually cease during 2026 for the 2 assets we acquired in New South Wales. So we will see that benefit go through to our net profit position, which is we've been unfortunately amortizing about $3.3 million from our balance sheet and also against our net profit position. We do value -- get an independent valuation each year on our rent roll, even though we have to amortize it. We did get a valuation of $37.4 million done in July this year. Obviously, that's demonstrated on the balance sheet. We can't put that on the balance sheet as a valuation, but it just demonstrates that we do have a solid asset. If we look at our rent roll less our debt, if we look at a basis that we've got 442 agents, we believe that it gives us a share value in excess of $0.055 a share. If we look at just our net asset position and give some value to our agents and our brand, so obviously, that's not representative of what we see in the market. Next slide, Dave. [ Looking forward ], here's the depreciation and amortization piece, is what I touched on, which puts us in a net loss position. We will see that adjust accordingly with about $3.3 million this year, which will help support -- that happens in October, which will help support our focus to a positive EBIT number, which we hope to achieve in FY '26 with the removal of that. Our profitability from an EBITDA perspective, $1.12 million. As I said, we've got a good run rate of $137 million, which is falling through to our bottom line. So based on where we're at and what we showed last year and the growth that we had, it puts us in a strong position. Outlook, I might let you, if you like, Paul, to get to that.

Yes, sure. Okay. So we've got a good pipeline in place now for increasing the number of agents. I said there's a national strategy. Materials have been improved. Our database of agents has been improved. Our state managers have got some extra training in terms of helping them to recruit. Matt Lahood sits over the top. Matt Lahood is very well respected in the industry and has a large network of contacts and is also one of the better trainers there are. We work well with all of the trainers out there who sometimes see someone and would say, "Have you considered The Agency as a model?" So we've been building those relationships over the last few years. The management structure is in place for our guys. And the infrastructures, I guess one of the most important points is we're comfortable now that we've got very strong infrastructure in place across the country to help the business grow in terms of recruiting agents, and not only recruiting agents, training them, making sure they're kept up-to-date. So there's 2 ways to increase GCI. One is to recruit the number of agents. Second one is to get your agents to be able to sell more. So by giving them support, we're taking -- we're relieving them of time and admin duties that they would work on to focus on listing and selling, but we're also training them to be better at listing and selling. The partnership with the external rent roll generator has also had a lot of work done on the last 12 months, in particular. As I mentioned, it's been 2, 2.5 years of now learning, learning from our mistakes, knowing what to tweak, what we would do to make it better going forward. And we think that's going to be an important boost for us to grow our agent numbers but also grow the property management asset as well and unleash it from the balance sheet. Next slide. That's the corporate structure. One of the new members to the Board is Dr. Michael Schaper. It was very important for us to get him onboard for -- one is to strengthen our compliance and governance. Dr. Schaper was the Deputy Chair of the ACCC, is on the Board of the Australian Company Directors and a number of other Boards. He's already added and contributed greatly to the Board processes that we've got in place. Adam Davey has been on the Board from the beginning with us and brings his expertise from the capital markets. So the team has been working very well together, and the team also works very well with the executive team below.

Thanks, Paul.

That's it. So Dave, some questions.

Thanks, guys. A very comprehensive and insightful presentation. And as I think a lot of comments coming through, sometimes you can see a deck, but it's not until management present it and you hear it in their own words that it really sinks in, the impressive nature of where the business has evolved. We will jump in now to Q&A. We've got about 10 minutes to get through as many as we can. There has been a lot of questions coming in through. As I said at the beginning, we'll get through as many as we can, but any that we miss, we will capture and put forward to management who will deal with them over the next 24 hours. So let's just jump straight into it. Now you've talked about a $150 million target on GCI. You've obviously got a strong run rate at the moment. How does the pipeline of what you see coming into the business help you move towards that target?

Okay. So...

Do you want jump to on that, Paul?

Yes. Again, I guess it's twofold, as I mentioned. There's market conditions that you've got to take into account. And one of the benefits of this business being national, usually, you find out when one market's down, another one improves. So in the last, I guess, few years, WA has had a strong market as opposed to the East Coast. And now you're seeing the East Coast having a very strong market and the WA constrained by the number of listings. So you need agents, and that's why there's always a focus on recruitment of agents. And that pipeline at the moment -- AJ, what was the number that we said Matt had? 47 on the East Coast?

We've got 47 in New South Wales -- we've got a pipeline of in excess of $20 million GCI at the moment who we're talking to. So that could be offices to individual agents. We've run it through HubSpot. We've got a platform that's been specifically built for us, which is all around recruitment. We've got recruitment marketing teams specifically to recruit. Our pipeline -- and it's really a focus for our state GMs who they have to talk to regularly through their HubSpot accounts. So we actually do track regularly and daily who we're talking to, how many agents are coming in. And at the moment, we've got a pipeline of in excess of $20 million that we're in deep discussions with.

And as I mentioned, Dave, there's 2 sides to that coin. One is recruiting of agents and quality agents that now we're focusing on and improving your current list of agents. And from next year, we actually -- and it's all budgeted. But again, this is the investments we're looking in. We have a national training coordinator who will pool all the training materials that we have and run a national training program for all our agents.