When it published abridged results in March, Mortgage Advice Bureau (MAB1) said it had already started to see a sharp contraction in appointment activity and mortgage instructions.
That prompted a halving of the final dividend for 2019 to 6.4p per share, despite the full draw-down of a £12m credit line. With house purchases now on ice, the group has gone further, furloughing some employees and reducing pay for others. Around 13 per cent of all advisers – most of whom are employees of appointed representative firms – have also been furloughed.
While these moves have required the use of the government’s job retention scheme, payment of the £3.3m final dividend has been signed off. Deputy chief executive Ben Thompson denied this amounted to using state funds to pay shareholders, and that MAB has instead struck “the optimum balance between looking after our staff as well as our investors and their respective customers”.
Amid the current turmoil, the advisory firm’s own customers are showing renewed interest in protection products, while recent drops in interest rates are set to boost re-mortgage and product transfer activity.
Numis expects earnings to fall to 18.4p per share this year, swinging back to 35.3p in 2021.
| MORTGAGE ADVICE BUREAU (MAB1) | ||||
| ORD PRICE: | 514p | MARKET VALUE: | £265m | |
| TOUCH: | 502-530p | 12-MONTH HIGH: | 825p | LOW: 330p |
| DIVIDEND YIELD: | 3.4% | PE RATIO: | 18 | |
| NET ASSET VALUE: | 49.6p* | NET CASH: | £17.9m^ | |
| Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2015 | 75.5 | 10.4 | 17.2 | 14.4 |
| 2016 | 92.8 | 15.2 | 25.6 | 18.3** |
| 2017 | 109 | 14.5 | 23.8 | 21.4 |
| 2018 | 123 | 15.7 | 25.9 | 23.3 |
| 2019 | 144 | 17.7 | 28.2 | 17.5 |
| % change | +17 | +13 | +9 | -25 |
| Ex-div: | 30 Apr | |||
| Payment: | 29 May | |||
| *Includes intangible assets of £19m, or 36.8p a share ^Includes £2.8m in lease liabilities **Excludes special dividend of 5.35p per share | ||||
