The troubled real estate group founded by John McGrath has issued another profit warning, after new management reassessed the financial pain inflicted by agent exits.
The latest downgrade follows the appointment of a fresh board and chief executive last month.
McGrath said it now expects underlying earnings for the financial year to come in between $5 million and $5.5 million.
That is about half the $10.6 million to $11.6 million range forecast in January, when it was revealed the chief executive and the entire board except for John McGrath would be leaving.
"I think that was a view the board took at that particular point in time — that was before my time," new chief executive Geoff Lucas told the ABC.
"I've been here just on two weeks now, so it was important for myself and the new board to get an understanding of the trading conditions to date."
Mr Lucas said sales volumes have suffered from the departure of agents, many of whom have gone on to form rival agencies.
"The task for us is to stabilise the business, stabilise the agent numbers and, from that platform, go forward and grow the number of agents and franchisees," Mr Lucas said.
Mr Lucas was previously McGrath's chief operating officer and spent more than eight years with the company before departing in 2016.
He said the company saw an increase in auction bookings last month but it was adopting a "conservative and realistic view" about its performance for the rest of the financial year.
"It is important that the market is aware of the right baseline financial position that appropriately reflects the current status of the McGrath business and trading conditions," he said in a statement to the ASX.
After taking a hit of around $4 million for restructuring costs, McGrath said it expected to report full-year earnings between $1 million and $1.5 million.
Following the latest profit warning, McGrath shares had fallen 1.2 per cent to 42.5 cents by 12:20pm (AEDT).
'Noise' drowning out McGrath's success: Lucas
The board and executive team overhaul followed a turbulent period for the real estate agent, which reported a $25.5 million loss for the first half of the financial year after writing down its company-owned sales business.
Mr McGrath, who is also a major shareholder, was forced to deny reports he held a $100 million margin lending facility against his shares in the company to fund a gambling debt.
"Like many Australians, I enjoy a punt. I have a credit account with a bookmaker for this purpose," Mr McGrath said in a statement to the ASX last month.
"That account is not secured by, or otherwise connected with, my shares in the company … I have never, and would never, let what I might choose to do in my personal time impact upon the company."
It is an issue that the new chief executive would not be drawn on.
"In terms of that being over or clarified, that's a personal matter for John," Mr Lucas told the ABC today.
He said the speculation has been a distraction for the business.
"There's been a lot of attention to date and noise around the business but not necessarily the success that we're having in the field."