Shares in real estate agency group McGrath have plunged to an all-time low after the business warned that its full-year earnings will be lower than expected.
McGrath's shares had plunged more than 22 per cent, or by 13.5 cents, to 47.5 cents by 1032 AEDT. Just after opening, at 1004 AEDT, they were trading at 45.5 cents.
That is their lowest since listing on the share market two years ago.
The firm says it has had a weaker-than-expected first four months of trading largely due to weak company owned sales, with listings in most of its markets down and fewer agents.
It also blamed government policy changes around foreign buyers and developers, and tightened lending requirements.
The company has not provided specific earnings guidance for the 2018 full year, but says it does not expect to reach analyst group Bell Potter's estimate of $16.6 million EBITDA (earnings before interest, tax, depreciation and amortisation).
"In order to deliver a result that would align with forecasts in the market of $16.6 million, EBITDA in FY18, we would be required to make significant cost cuts that may not be in the best interests of the business in the long term," the company said in a statement to the ASX on Monday.
Instead, McGrath forecasts earnings will be 20 per cent to 25 per cent lower than Bell Potter's estimate, due to high restructuring charges.
McGrath said it plans to remove about $5 million of annualised costs from the business at a one-off restructuring cost of between $1.4 million and $1.6 million.
Most of the savings will be achieved by restructuring the board, executive and leadership team, and removing management associated with company-owned office expansion and non-revenue generating roles across the organisation.
The group's full-year net profit dropped 42 per cent to $4.9 million in the 2017 financial year.
It was the first real estate agency to list on the ASX when it debuted in December, 2015 with an offer price of $2.10.
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