RMA Global (ASX: RMY) – real estate agents review platform
ABOUT COMPANY
RMA Global (RMY) (https://www.rma-global.com/) offers sale results for residential real estate agents and agencies, as well as reviews of agent performance from vendors and buyers of residential real estate. It operates in Australia, the United States, and New Zealand.
CAPITAL STRUCTURE
| ASX Code | Share Price | Shares | Option (In) | Market Cap | Cash/Asset ($m) |
| RMY | 0.072 | 557942632 | 40171869.504 | 4.9/0 |
| Holders No | Top 20 (Cur) | Top 20 (Pre) | Director Hold | Performance Right | Note |
| 1123 | 73.6% | 75.6% | 35.93% | last raise $5.1m@7c; pre raise $3.5m@22c |
At December 2022, it has $4m contract liability.
In October 2022, the long-term CEO and director, Mark Armstrong (56.4m shares), resigned. He started dumping shares in August 2023.
In Feb 2024, another CEO resigned with immediate effect.
BUSINESS
Below is the company’s past 5 years performance:
| RMY | 2023 | 2022 | 2021 | 2020 | 2019 |
| Operation Revenue | 17325 | 15248 | 11052 | 7256 | |
| Cost of Sale | -2800 | -2935 | -2029 | -774 | |
| Gross Revenue | 14525 | 12313 | 9023 | 6482 | 0 |
| Gross Margin | 0.8384 | 0.8075 | 0.8164 | 0.8933 | 0 |
| Overheads | -19236 | -18954 | -17790 | -15932 | |
| Fixed Overheads | |||||
| Variable Overheads | |||||
| Total Operation Expense | -19236 | -18954 | -17790 | -15932 | 0 |
| Operation Profit | -4711 | -6641 | -8767 | -9450 | 0 |
| Other Revenue | 304 | 321 | 389 | 164 | |
| Interest Expense | -47 | -49 | -26 | 9 | |
| D&A | -436 | -338 | -450 | -410 | |
| Income Tax | -27 | -3 | |||
| Net Profit | -4890 | -6707 | -8881 | -9690 | 0 |
| NOTES |
The company has a scalable business model. The only question is how fast they can grow in the United States, and cover the $17m expenditure. Obviously, it hasn’t been fast enough in FY21 and FY22.
The company will need $3om revenue to breakeven, the additional $15m will all come from US market. This means, it will need to show $1m plus revenue a quarter from US from FY23 onwards, or it will have difficulty raising capital at a reasonable price.
Currently, US market growth rate is around 20% Q on Q, which is far less than what is needed to satisfy the market’s expectation.
SUMMARY
There will be substantial headwind ahead for the real estate industry in 2024 in both Australia and the USA, the company simply couldn’t generate enough revenue to justify its cash burn and the market cap.