The Agency Finds Its Leverage

The long-promised operating leverage at The Agency Group Australia has finally started to show up in the numbers.

For the half year to 31 December 2025, the national real estate network delivered what management describes as an inflection point result, with underlying EBITDA up 199 per cent to $2.06 million and operating cash flow firmly in the black at $1.81 million.

The business is now demonstrating what scale can do to a largely fixed corporate cost base.

Earnings momentum as amortisation headwind fades

The headline improvement was not just at the EBITDA line. Net loss after tax narrowed sharply to $0.83 million from $2.30 million previously , reflecting both stronger trading and the gradual removal of legacy amortisation linked to historical rent roll acquisitions.

Crucially, the bulk of that rent roll amortisation concluded in September 2025, stripping out roughly $3.1 million in annualised non-cash expense that had weighed on statutory profit . That accounting overhang has been a persistent irritant for investors trying to assess the group’s true earnings power.

With that structural drag largely gone, incremental revenue should now fall more cleanly to the bottom line.

Chairman Andrew Jensen said the strategic groundwork of recent years is translating into “tangible financial outcomes”, pointing to improved productivity and earnings quality .

Scale begins to bite

Gross Commission Income rose 34 per cent to $81.6 million, while revenue increased 18 per cent to $57.1 million. The more telling metric, however, was cost discipline.

The cost of doing business fell to about 30 per cent of revenue, reflecting tighter overhead management and better utilisation of the national platform. At a current GCI run rate of roughly $150 million, management says the group is EBITDA positive and generating positive operating cash flow.

This is the operating leverage story in action. Fixed corporate costs are now being spread across a broader revenue base, meaning each additional dollar of GCI contributes more meaningfully to EBITDA.

Importantly, growth is not being fuelled by reckless agent recruitment. Headcount rose to a record 474 agents at period end, up from 442 at 30 June 2025 . Agents recruited within the past 12 months contributed $5.9 million in GCI, but the majority of growth came from improved productivity among existing agents.

That suggests the model is bedding down rather than merely expanding.

Property management underpins resilience

Behind the transactional sales business sits a sizeable property management platform, which continues to provide ballast.

The group manages 12,413 properties nationally, generating property management revenue of $7.1 million, up 11 per cent . Of these, 5,499 management rights are owned outright, with a further 6,914 managed under service arrangements.

An independent valuation in June 2025 assessed the owned rent rolls at approximately $37.4 million , underscoring the embedded asset value within the business.

For investors wary of the cyclicality of residential sales, this recurring income stream offers a measure of cash flow stability through listing downturns.

Market share gains in patchy conditions

Trading conditions across Australia’s housing markets have been mixed, but The Agency has managed to lift its share.

During the half, 3,703 properties were sold, up 12 per cent, while gross sales volume jumped 36 per cent to $4.9 billion . That combination of volume and value growth points to both increased activity and exposure to stronger price segments.

Management attributes the gains to brand strength and national reach, with selective recruitment of high-performing agents remaining central to the strategy.

The group has also refined its services model, consolidating Rightmove and minor brands into a streamlined Service Plus structure. The revamped model, supported by a dedicated East Coast recruiter, is being rolled out with early engagement described as encouraging.

Balance sheet breathing room

Liquidity has also improved.

Cash at bank stood at $4.47 million at 31 December 2025, with the business operating cash flow positive . During the half, banking facilities with Macquarie were extended to 30 June 2028, the interest margin was reduced, a $1.6 million growth facility was added, and the interest cover covenant was removed.

The convertible note facility with Peters Investments was also extended to 31 December 2028 , aligning maturities and easing near-term refinancing risk.

For a company that has historically walked a fine line on liquidity, that extension provides welcome headroom.

The road to $175 million GCI

Looking ahead, management acknowledges second half seasonality and higher commission payouts as agents hit annual targets . Even so, the board is targeting progression from the current $150 million GCI run rate towards a $175 million milestone in coming years .

Whether that target is met will depend on continued productivity gains, disciplined recruitment and housing market stability.

What is clearer after this result is that the underlying model is beginning to behave as advertised. The amortisation fog has lifted, cash is flowing, and incremental revenue is finally translating into earnings.

For long-suffering shareholders, that is more than a green shoot. It may just be the start of a more sustainable growth chapter.