Given anaemic UK housing transaction volumes – which dipped 2.5 per cent last year – estate agents are understandably feeling the pressure. Mortgage Advice Bureau (MAB1) expects ongoing Brexit-related uncertainty to result in “muted” trading for its estate agency-based adviser representatives in 2019 and result in flat revenue for each of those advisers. Adviser representatives pausing expansion plans and delaying filling vacancies is also expected to impact “marginally” on the mortgage brokerage’s adviser growth rate this year, before a return to normal levels in 2020.
Boosting adviser numbers is one of the main ways the group grows its market share. Last year it increased the average number of representatives by 12 per cent to 1,213, rising to 1,234 by mid-March. That helped grow its market share of new lending to 4.7 per cent, from 4.3 per cent last year. New mortgage lending arrangements were up 14 per cent, while product transfers –where lenders switch providers – grew more than three-quarters to £1.3bn. However, the jump in product transfers and a drop in protection sales – due to lower house purchase mortgages – meant the gross profit margin dipped to 23.1 per cent, from 23.8 per cent.
Analysts at Numis expect adjusted pre-tax profits of £17.8m and EPS of 29p, up from £15.7m and 25.9p this year, respectively, in 2018.
MORTGAGE ADVICE BUREAU (MAB1) | ||||
ORD PRICE: | 546p | MARKET VALUE: | £279m | |
TOUCH: | 544-568p | 12-MONTH HIGH: | 740p | LOW: 470p |
DIVIDEND YIELD: | 4.3% | PE RATIO: | 21 | |
NET ASSET VALUE: | 40p* | NET CASH: | £26m |
Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
2014 | 56.6 | 6.9 | 9.6 | 2 |
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 |
% change | +13 | +8 | +9 | +9 |
Ex-div: | 25 Apr | |||
Payment: | 24 May | |||
*Includes intangible assets of £4.8m, or 9p a share **Excludes special dividend of 5.35p a share |