New directors for McGrath boardroom

High-profile real estate agent John McGrath has dumped plans to step up as executive chairman of his troubled agency.

McGrath ounder John Mc Grath and CEO Cameron Judson. Picture: Renee Nowytarger

High-profile real estate agent John McGrath has dumped plans to step up as executive chairman of his troubled agency and has instead tapped two new directors to sit on the board while he takes up a role at the coalface, trying to turn the business around.

Mr McGrath is preparing to take on the new role that will bring him closer to the group’s 95 agencies, with a focus on managing and keeping the network intact after the company has endured a horror two years on the Australian Stock Exchange.

The listed vehicle has been left reeling after its earnings fell, chief executive Cameron Judson left and it suffered a dramatic walkout of the remainder of its board, with industry players saying the stream of bad publicity is affecting listings, property management and the other parts of the company, despite denials.

Mr McGrath, who has also identified a new chief executive for the company, will return to his roots in marketing, sales and business development as the company seeks to fend off rival agents who are now keen to make inroads into traditional McGrath strongholds by attracting the company’s best talent.

The two new directors — with legal and financial backgrounds respectively — are on track to be unveiled today to sit alongside Mr McGrath, just as the company’s remaining board members are due to depart. It comes after the company last week fell to a $25.5 million first-half loss on the back of a series of earnings downgrades and its directors admitted to a communications breakdown with the company founder.

The company plunged into a trading halt last Thursday before Mr McGrath that evening issued a statement admitting he enjoys a punt and held a bookmaker account, as he sought to defuse a Sydney Morning Herald report over a gambling debt of up to $16.2m to William Hill.

However, the veteran agent then insisted that he would not let his personal affairs interfere with his business and believes he can now turn around the company he set up 30 years ago, with a leaner, more responsive board and management structure.

The company’s share price has crashed from $2.10 in December 2015 to below 40c after coming out of a trading last week, following the Cass O’Connor-led board demanding clarity on Mr McGrath’s affairs, including a historic margin lending facility, to ensure the company was compliant with ASX listing rules.

The latest appointments mean the board will consist of the minimum number of directors required under listing rules. It marks a shift from the previous high-profile chief executive Cameron Judson, who had earlier run a human resources company, with Mr McGrath now seeking to preserve the value that remains in the agency’s brand.

Millions have been wiped off the value of his 26 per cent stake in the listed company.