For all the market concern about a decline in mortgage applications after the buy-to-let stamp duty increase and the EU referendum, Mortgage Advice Bureau (MAB1) is holding up well. Bosses say overall written business has remained stable following the vote, after easing slightly in the run-up to it. Still, gross mortgage lending in the reported period increased by almost half year on year to £4.8bn.
The group grew its market share from 3.3 per cent to 4 per cent. This was partly due to a spike in mortgage applications from buy-to-let landlords prior to April, but also reflected its growing distribution network. Adviser numbers increased by more than a quarter to 851, boosting MAB's mortgage procuration fees by more than half to £19m. The adviser total rose to 921 by 23 September, and is expected to be ahead of expectations for the full year, although revenue per adviser is likely to be below previous estimates.
Larger adviser companies have been joining the network, which give a smaller cut of their income to MAB. As a result gross margins were eroded slightly, falling to 23.1 per cent from 24.3 per cent. Advisers also completed more lower-margin remortgaging and protection work.
Analysts at broker finnCap expect adjusted pre-tax profit of £12.3m for the year to December 2016 and EPS of 19.4p (from £10.4m and 16.6p in FY2015).
MORTGAGE ADVICE BUREAU (MAB1) | ||||
|---|---|---|---|---|
| ORD PRICE: | 330p | MARKET VALUE: | £167m | |
| TOUCH: | 315-330p | 12-MONTH HIGH: | 399p | LOW: 192p |
| DIVIDEND YIELD: | 5.2%* | PE RATIO: | 17 | |
| NET ASSET VALUE: | 29p** | NET CASH: | £16.3m | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2015 | 31.2 | 3.9 | 6.5 | 4.9 |
| 2016 | 43.1 | 5.3 | 8.6 | 7.8 |
| % change | +38 | +34 | +32 | +59 |
Ex-div: 6 Oct Payment: 28 Oct *Excludes special dividend of 4.25p paid in August 2016 **Includes intangible assets of £4.1m, or 8p a share | ||||
