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Mortgage Advice Bureau flags jump in completions

The mortgage intermediary also outperformed the wider industry last year after growing market share
Mortgage Advice Bureau flags jump in completions
  • UK mortgage lending is forecast to be 6 per cent higher this year, against 2019 volumes
  • Growing market share meant gross mortgage completions grew in a declining market last year

The extension of the stamp duty holiday and the prospect of government-backed 95 per cent loan-to-value mortgages should drive activity higher this year, Mortgage Advice Bureau (MAB1) has said. 

The Intermediary Mortgage Lenders Association expects a 16 per cent increase in gross new mortgage lending for this year to £283bn, which represents a 6 per cent increase compared to 2019 - and that bullish forecast was prior to the government’s housing-friendly Budget announcements. 

Last year, the mortgage intermediary grew gross mortgage completions by 5 per cent, against a 9 per cent decline in the broader market following the second quarter lockdown. 

That was thanks to a rising market share that reached 6.3 per cent, up from 5.7 per cent in 2019. 

The rebound in activity during the second half of the year also meant recruitment picked-up. The average number of active advisers were up 6 per cent excluding the acquisition of First Mortgages, and 9 per cent with the business included. However, the second quarter lockdown did mean average revenue per adviser fell 5 per cent.  

Analysts at Peel Hunt forecast adjusted pre-tax profits of £24.3m and EPS of 37.6p in 2021, rising to £27.9m and 42.9p, respectively, the following year. However, solid earnings expectations are reflected in a price/ earnings ratio of 28, which is considerably higher than the shares’ five-year average. Hold. 

Last IC View: Hold, 720p, 29 Sep 2020

MORTGAGE ADVICE BUREAU (MAB1)  
ORD PRICE:1,078pMARKET VALUE:£ 573m
TOUCH:1,055-1,090p12-MONTH HIGH:1,215pLOW: 405p
DIVIDEND YIELD:2.4%PE RATIO:45
NET ASSET VALUE:67p*NET CASH:£30m
Year to 31 DecTurnover (£m)Pre-tax profit (£m)Earnings per share (p)Dividend per share (p)
201692.815.225.618.3**
201710914.523.821.4
201812315.725.923.3
201914417.728.217.5
202014814.923.725.6
% change+3-16-16+46
Ex-div:29 Apr   
Payment:28 May   
*Includes intangible assets of £18.3m, or 34p a share  **Excludes special dividend of 5.35p per share