Revenue, adjusted earnings rise for Mortgage Advice Bureau

24th Sep 2024 12:30

(Sharecast News) - Mortgage Advice Bureau reported a 5.4% improvement in first-half revenue on Tuesday, to £123.9m, as gross profit increased 14.5% to £37.7m.

The AIM-traded company said its gross profit margin improved to 30.4% for the six months ended 30 June, up 2.4 percentage points from the prior year.

Adjusted EBITDA grew 31.3% to £13.8m, reflecting a margin expansion to 11.1%, while adjusted profit before tax rose 39.9% to £12.3m, although statutory profit before tax decreased 17.9% to £6.2m due to non-recurring costs and adjustments.

Despite challenging market conditions, MAB maintained its market share in new mortgage lending, increasing slightly to 8.2%.

Gross mortgage completions, including product transfers, remained flat at £12.1bn, while gross new mortgage completions, excluding product transfers, rose 1.3% to £9.1bn.

Revenue per mainstream adviser increased 9.2% to £65,300, even as the number of advisers saw a marginal decline of 0.7% to 1,908.

However, since the period ended, the number of advisers had grown to 1,945 as of 20 September.

The firm achieved adjusted fully diluted earnings per share (EPS) of 14.8p, up 25.8%, while basic EPS fell 42.3% to 6.5p, primarily due to the impact of exceptional costs.

Adjusted cash conversion remained strong at 119%, albeit down 12 percentage points compared to the prior year.

MAB maintained its interim dividend at 13.4p per share.

"The first few months of 2024 started well as mortgage rates edged down ahead of expected base rate cuts and a more stable political outlook," said chief executive officer Peter Brodnicki.

"When it became clear those cuts were not imminent, lenders adjusted their mortgage rates back up and the increased activity we saw started to tail off towards the end of the first quarter.

"Refinancing and purchase activity remained subdued for the rest of the first half, ahead of the general election."

Brodnicki said that, having now seen the first of a number of expected base rate cuts, activity levels were starting to gradually build, with the firm expecting momentum to continue.

"Against this backdrop, I am very pleased with the progress MAB continues to make in a year that mortgage volumes are likely to be at very similar levels to 2023.

"MAB's investment in technology and AI remains a strategic priority as we shape the business for strong and sustainable growth, while further increasing our operational resilience.

"Significant progress continues to be made in terms of lead generation, which is becoming an increasingly major differentiator, and will support our strategy to help scale firms and increase adviser productivity."

Peter Brodnicki said the company's adviser numbers had started to pick up since the period ended, as it expected to deliver further growth as new ARs were recruited into MAB and its existing ARs started growing adviser numbers again after a sustained period of market-induced consolidation.

"We expect to see record years in terms of re-financing activity in 2025-2026 and it is very encouraging to have a new government that is so focused on housebuilding and other initiatives that will bring a tail wind to MAB and our market."

At 1211 BST, shares in Mortgage Advice Bureau Holdings were up 9.28% at 594.51p.

Reporting by Josh White for Sharecast.com.