John McGrath confirms credit account with bookmaker

Star real estate agent John McGrath has closed out a chaotic day for the listed company he founded by declaring his gambling habits are no threat to the business or his wealth.

Trading in McGrath shares was halted on Thursday morning and the company's results announcement delayed as the company said it had to deal with information linked to media speculation around Mr McGrath.

McGrath posts $25m loss

Real estate agency McGrath has entered a trading halt after reporting a $25.5 million loss in the six months ending December 31.

The company's outgoing chief executive Cameron Judson refused to comment on the nature of the information.

But Mr McGrath released a statement to the ASX late on Thursday night blasting "ridiculous recent press coverage".

He said that coverage was "distracting attention from the important work of the company to a point where I have concluded I need to make a statement to clear the air".

"Like many Australians, I enjoy a punt. I have a credit account with a bookmaker for this purpose," he said.

"That account is not secured by, or otherwise connected with, my shares in the company.

"The account is well within my means in the context of my net wealth."

Mr McGrath said he was in full compliance with the terms of that account.

"I have never, and would never, let what I might choose to do in my personal time impact upon the company," he said.

Fairfax Media reported earlier this month that Mr McGrath had a $16 million debt to bookmaker William Hill. In a statement to staff, Mr McGrath branded the report as "rubbish" .

In another late statement the company also restated a number of key figures it had released only earlier that day at its earnings call.

Fairfax Media can also reveal the McGrath board had to engage a ''round robin'' scramble late on Wednesday night that led to a surprise trading halt and confusion about the company's leadership.

The company said in a statement on Thursday morning that the halt was necessary due to new "information" it had received.

Mr Judson, who finishes at the company on Friday afternoon, said the step was not taken lightly but declined to comment on the detail of the issue.

It can now be revealed that the board had gathered at McGrath's Edgecliff head office in Sydney's east on Wednesday to sign off on the results.

Founder and current executive director John McGrath, was in Melbourne where he had been meeting with his agents and dialled into the boardroom discussion.

But later that night ''further information'' relating to recent media speculation that has been swirling around Mr McGrath came to the board's attention.

That set off a round robin of phone calls between the directors, which culminated in the company asking for the trading halt.

As the ASX processed the McGrath announcements, the directors, led by the outgoing chief executive Cameron Judson, delayed a media webinar that had been scheduled for 9am for two hours.

When the results presentation got under way at 11am, Mr Judson said the trading halt was a ''precautionary and prudent'' move.

"The company has become privy to further information, which I can't comment on, and is seeking urgent clarification from John McGrath," Mr Judson said during the investor call.

"The board has considered this trading halt a significant development and let me assure you they have not taken this step lightly."

One insider said the continued media speculation had the potential to become ''very distracting''.

It is understood the issue does not relate to an ASX review of McGrath Ltd's denial of speculation that Mr McGrath has a $100 million margin-lending facility attached to his shares in the publicly listed company.

Other media speculation swirling about recently includes that Mr McGrath is keen to privatise the company he founded in 1998, of which he still owns 26 per cent; and an alleged gambling debt of $16 million, which Mr McGrath has denied.

Mr McGrath did not return phone calls on Thursday.

Horror time

It has been a horror time in recent months for the company, which listed with much fanfare in December 2015 at $2.10. But with residential listings almost falling overnight and the decline of overseas buyers, the share price collapsed. The shares were at 42.5¢ before the trading halt.

Last month, Mr Judson and the entire board, barring Mr McGrath, flagged plans to quit the company after its lower than expected earnings were leaked to the media. Mr McGrath agreed to take up the position of executive chairman.

In the results release on Thursday, which included a $21.8 million goodwill impairment on company-owned sales, Mr McGrath said he was ''very proud and excited'' to again be leading the business.

Mr Judson, who will leave alongside the company's head of corporate services, Morgan Sloper, said the board was doing everything in its power to update the market as soon as it could.

The board, including chairman Cass O'Connor, will leave the company on Monday.

Ms O'Connor declined to comment on the trading halt, except to confirm that "nothing has changed to make me change my mind to leave".

''I have told the ASX and the board I am leaving close of business, Monday and that is still the case,'' she said.

It is understood Mr McGrath is in discussions with a number of new director candidates.

To remain a public company, McGrath Ltd must have at least three directors (not counting alternate directors) and at least two must live in Australia.

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