Sherry FitzGerald looking at re-entering UK market

Estate agent Sherry FitzGerald is looking at re-entering the UK market and also has an eye on acquisitions in the Republic to further bolster its position as the largest player in the market.

“We are looking at opportunities in Ireland and in the UK,” Sherry FitzGerald’s chief executive Stephen McKenna said. “We’re set up for growth and we need to look to expand. There’s expansion in the Irish market through further consolidation within the industry. We’re also looking at the UK, having been there before. There’s good opportunities over there potentially, even with Brexit.”

Mr McKenna said a deal between the UK and the European Union on Brexit would likely see "pent-up demand coming back into the marketplace" in Britain.

In 2011, Sherry FitzGerald exited the UK when it sold its majority share in Marsh & Parsons in a deal that netted the Irish company €44 million. That money was used to support the Irish business through the depths of recession at home.

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The latest accounts for Sherry FitzGerald show that the company’s turnover increased to €28.3 million last year from just under €27 million in 2017.

Rising staff costs

However, the agency recorded a loss for the year of €2.5 million. This was due to €2 million in various costs related to the sale of its 71 per cent stake in the Irish commercial property division to Cushman & Wakefield, and rising staff costs.

Sherry FitzGerald recorded ebitda (earnings before interest, tax, depreciation and amortisation) of €1.5 million in 2018, half the level of a year earlier.

Its net assets reduced to €8 million from €23 million, reflecting the sale of its stake in the commercial business.

Mr McKenna described it as a year of “restructuring and investment” for the group.

Sherry FitzGerald acquired two franchisees in the Dublin region while also adding new franchise operators with offices in Maynooth, Abbeyfeale, Claremorris, Loughrea and Portumna.

Including franchisees, Sherry FitzGerald group sold 8,300 units last year with a combined capital value of €3 billion. This included 1,800 new homes, up from 1,500 a year earlier. The agent had a 15.5 per cent share of the Irish residential market last year.

In 2017, it sold 7,400 homes with a total value of €2.6 billion, while its market share was 14.6 per cent.

Current year

For the current year, Mr McKenna is forecasting single-digit revenue growth and a return to profitability, in spite of weak consumer confidence around Brexit, and issues around new housing supply.

It plans to open company-owned offices in Tallaght and Phibsborough in Dublin in 2020, he said.

Staff costs last year rose by €1.7 million to €22.3 million, with the headcount at its Sherry FitzGerald-owned operation rising to 260 from 234 previously. Directors’ emoluments rose by 20 per cent to €2.8 million.

The group now has 96 offices (27 owned and the rest franchisees) and is on course to top the 100 mark this year, Mr McKenna said.