Revenue rises in pandemic year at Mortgage Advice Bureau

Mortgage Advice Bureau reported a 3% improvement in full-year revenue on Tuesday, to £148.3m, which included £14.7m of revenue generated by First Mortgage Direct.

The AIM-traded firm said its gross profit was up 9% for the year ended 31 December at £39.8m, while its gross profit margin was 26.9%, up from 25.3% in the prior year.

Its adjusted overheads ratio was 14.5%, compared to 12.4% in 2019, while its adjusted profit before tax slipped 5% to £17.8m.

The company said its statutory profit before tax was 16% weaker year-on-year at £14.9m.

Its adjusted profit before tax margin fell to 12% from 13%, and its reported profit before tax margin was 10%, down from 12.3%.

Adjusted earnings per share were 5% weaker at 28.6p, and basic earnings per share slid 16% to 23.7p.

The board reported a continued high operating profit-to-adjusted cash conversion of 112%, compared to 119% in the prior year.

It proposed a final dividend of 19.2p, making for total proposed dividends for the year of 25.6p, up from 17.5p.

Operationally, Mortgage Advice Bureau said its adviser numbers were up 8% to 1,580 at year-end, including 97 advisers at First Mortgage, up from 82.

The average number of active advisers during the period was ahead 9% at 1,455, and was 6% higher to 1,374 when excluding First Mortgage.

Its market share of new mortgage lending was 6.3%, up from 5.7%, while gross mortgage completions, including product transfers, were 5% firmer at £17.6bn.

Product transfer completions grew by 50% to £2.3bn.

Revenue per active adviser slipped 5%, which the company put down to the closure of the housing market and the general economy in the second quarter after the outbreak of Covid-19.

It said it had repaid its £12m revolving credit facility in full, while income of £0.5m from the Coronavirus Job Retention Scheme was also repaid in full in December.

Mortgage Advice Bureau said it had a “very strong” pipeline of written business and adviser recruitment, with 1,637 advisers as at 19 March, up 4% since the year-end.

“Despite the impact of the pandemic, our profitability and cash generation profile remained strong, which enabled us to reimburse all the government furlough grant income received,” said chief executive officer Peter Brodnick.

“Accordingly, we are pleased to propose a final dividend of 19.2p per share, in line with our policy of paying out a minimum of 75% of adjusted earnings, making total proposed dividends for the year of 25.6 pence per share.

“This includes the 6.4p per share 'catch up' interim dividend paid in December 2020.”

At 1130 GMT, shares in Mortgage Advice Bureau Holdings were up 1.13% at 1,120p.