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On it’s IPO debut in Q3 2015, McGrath Estates (ASX:MEA) was valued at around $282 million and priced at $2.10 a share, with the initial public offering worth $129.6 million.

When the share price plummeted to a low of 91 cents, the Chief Executive Officer John McGrath resigned his position from Australia’s third largest property agency in August last year in response.

McGrath handed over the day-to-day running of the business to now Chief Executive Cameron Judson, and instead remained on board as an executive director with a focus on brand, growth and innovation.

The reputation of the brand took a massive hit among industry professionals and the general public, and has struggled to recover since, with the shareprice sitting at an even lower $0.58 and a value of $79.8 million (just over a quarter of the company’s original value), with no finance experts predicting a comeback in sight.

ASX:MEA – McGrath Limited’s fall from grace, as illustrated by their share price

In recent times, realestatebusiness.com.au (owned by Momentum Media) has published stories almost daily highlighting positive developments of McGrath Estates as they attempt to rebuild a positive public relations image and recover John’s once sparkling reputation as an industry giant.

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Bonnie Stokes, head of Marketing and PR at Media Sociale in Adelaide, said that the company was likely looking to leverage off John’s personal brand to create a positive image since his return to the spotlight.

“As McGraths Estate is so closely tied up with John’s personal brand they can really leverage off this and use his image and expertise to make the business look as though it is in a better position and make them appear as though they are active and growing,” she said.

“The company experienced difficulties once John stepped away so moving him back in the spotlight could increase confidence in the brand.”

However, there is not always a guarantee that this will have a positive impact and it can be seen as a significant risk.

“Having a company tied so closely to a personal brand can have great positive or negative impacts on a business, it is most definitely very risky,” she said.

“In this case they have seen serious detriment to the brand as John stepped down as CEO however they can now leverage off John’s personal brand to put the company back in a positive place, tapping into his personal expertise to show the industry they are able to innovate and recover from this setback.

“Running this PR campaign effectively will increase confidence in the business within the industry with will flow on to the general public in time.”

Ms. Stokes said that choosing to use an industry specific media outlet to clean up their image, such as realestatebusiness.com.au, is a strategic move on McGrath Estates part.

“By focusing first within the industry they can grow their credibility, they will also be found easily when the public are looking within real estate news,” she said.

“Another reason for releasing so many articles following a negative event for a company is to ‘bury’ the negative stories, these positive articles will populate search engines – such as Google – and will push the negative stories further down so they are not easily found.”

Comments thanks to Bonnie Stokes, head of Marketing and PR at Media Sociale in Adelaide mediasociale.com.au.

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