Source - RNS
RNS Number : 2975H
Mortgage Advice Bureau(Holdings)PLC
24 March 2020

24 March 2020


("MAB", or "the Company", or "the Group")


Moratorium on publication of financial statements, trading update, current trading and Coronavirus


Mortgage Advice Bureau (Holdings) PLC (AIM: MAB1.L) announces today that it will be complying with the recommendations from the Financial Reporting Council (FRC), the Financial Conduct Authority (FCA), and the London Stock Exchange (LSE) to all listed companies to delay the publication of financial results for at least two weeks. MAB had intended to release its final results for the year ended 31 December 2019 today. Further updates will be given as to the timing of the publication of our 2019 results, as soon as we are advised by the FCA, the FRC and the LSE.


In light of this, we are today providing an update on our 2019 results, current trading and our responses to the Coronavirus pandemic.


Summary of unaudited results for the year ended 31 December 2019


Financial highlights:


Revenue up 17% to £143.7m (2018: £123m)

Gross profit up 28% to £36.4m (2018: £28.4m)

Gross margin up 10% to 25.3% (2018: 23.1%)

Overheads ratio (before acquisition-related costs(1)) of 12.4% (2018: 10.7%)

Profit before tax and acquisition-related costs(1)up 19% to £18.7m (2018: £15.6m)

Statutory profit before tax up 13% to £17.7m (2018: £15.7m)

Profit before tax margin pre acquisition-related costs(1) of 13.0% (2018: 12.7%)

Reported profit before tax margin of 12.3% (2018: 12.7%)

Adjusted(1) EPS up 16% to 30.0p (2018: 25.9p)

Basic EPS up 9% to 28.2p (2018: 25.9p)

Continued high operating profit to adjusted cash conversion(2) of 119% (2018: 113%)

Operational highlights:

Adviser numbers up 20% to 1,457 at 31 December 2019 (31 December 2018: 1,213), which includes 82 Advisers from the acquisition of First Mortgage Direct

Average number of Advisers during the period up 19% to 1,341 (2018: 1,130), and up 14% to 1,293 excluding First Mortgage Direct

Underlying revenue per Adviser broadly flat for 2019(3), with improved banked productivity in H2 2019

Gross mortgage completions (including product transfers) up 20% to £16.7bn (2018: £14.0bn)

Gross mortgage completions with new lenders up 20% to £15.2bn (2018: £12.7bn)

Market share of new mortgage lending up 20% to 5.7% (2018: 4.7%)

Final dividend

In line with the Group's policy of paying-out a minimum of 75% of adjusted earnings, as announced on the acquisition of First Mortgage Direct, the Board had intended to propose an increased final dividend of 12.8 pence per share, making total dividends for the year of 23.9 pence per share, up 2.6% on the previous year. However, in view of the escalating severity of the current Coronavirus pandemic, we now intend to propose a final dividend of 6.4 pence per share, with the intention to pay a further 6.4 pence per share when the Board considers it prudent to do so.

Regulatory capital, unrestricted cash and net debt

The Group has a regulatory capital requirement amounting to 2.5% of regulated revenue. At 31 December 2019 this regulatory capital requirement was £3.1m (31 December 2018: £2.8m), and the Group held a surplus of £11.7m (31 December 2018: £12.0m). The Group's unrestricted cash balance was £7.0m as at 31 December 2019 and £11.4m as at 20 March 2020 (prior to the drawdown on our Revolving Credit Facility referred to below).

To give the Group additional flexibility to react quickly in this environment and capitalise on potential new opportunities, we drew down the full amount on our Revolving Credit Facility of £12m with National Westminster Bank Plc on 20 March 2020.

Trading since 1 January 2020, and response to the Coronavirus pandemic

A clear change in customer sentiment following the General Election in early December 2019 led to much improved activity in the housing market from the start of 2020, giving our AR firms and their Advisers a strong start to the year in terms of new business levels and productivity. This marked increase in activity has remained strong up to 22 March 2020, despite increasing concerns about the Coronavirus pandemic. Adviser numbers increased to 1,484 at 20 March 2020, despite a noticeable slowdown in recent weeks. It is too early to predict what the impact of the Coronavirus pandemic will be on the Group's results, but we do anticipate an inevitable disruption to trading in the coming months and an associated impact on our results for the full year.

We are starting to see a decline in new appointment activity in the purchase market, and expect this trend to continue as the Government has imposed further restrictions on social activity. Consequently, despite the strong start to the year, we have factored into our planning and expectations a considerable reduction in purchase related activity, which we expect to have a consequential impact upon adviser numbers and productivity. We expect volumes to continue as anticipated in the re-mortgage and product transfer markets.

Our management team has responded quickly to the Coronavirus pandemic, as follows:

Business Continuity Plan (BCP)

Maintaining the health and well-being of our staff and AR network remains a priority . We have successfully implemented all aspects of our Business Continuity Plan, requiring staff at all levels and in all functions to work remotely. Our IT platform ensured a smooth transition and is well adapted to maintain operations on this basis for as long as is required. 

Seamless transition to telephone advice

All elements of the mortgage and protection advice process can be transacted by telephone. Unsurprisingly, in recent weeks this has become by far the preferred option for customers. Telephone advice is already a fast-growing area of our business, both through strong growth in specialist telephone advisers, as well as an increasing number of telephone appointments being conducted by traditionally face-to-face advisers. MAB has been providing new guidance and tools to support a seamless transition to telephone advice across our distribution network, ensuring business continuity for advisers and customers across all purchase and re-mortgage transactions.

Realignment of resources

As well as realigning our resources to enable more telephone advice and to support advisers working from home, all our systems and processes have been robustly tested to allow MAB's head office and field based teams to work as effectively from home as in the office, ensuring continued and tailored support for our distribution channels.

Despite the anticipated reduction in the purchase market, we expect volumes to continue as expected in the re-mortgage and product transfer markets. Together they currently represent around 65% of the value of all UK mortgage transactions. This area of sustained activity is clearly one of the key priorities for MAB in this climate with resources now being largely focused on optimising the growth opportunities for MAB in this sector.

Although we expect protection sales to fall in line with purchase activity, the escalation of the Coronavirus pandemic has resulted in a heightened awareness of the importance of such products amongst customers. We have increased our focus and that of our ARs and Advisers on protection especially in the re-mortgage and product transfer markets, so that appropriate solutions can be presented to customers in the current circumstances.

New campaigns and initiatives

The changes in the circumstances and priorities for consumers has led us to design new campaigns and initiatives as part of our communication strategy. These include a free mortgage information support service to help the financial wellbeing of homeowners worried about paying their mortgage. In addition, all our online, social media, and existing client communications, which now feature this free service, have also been tailored to reflect a heightened awareness of protection and refinancing.

In response to the challenging environment, MAB, our AR firms and their Advisers have an increased focus on business efficiency and ensuring no opportunities are missed. We have commenced the implementation of new technology-led processes and efficiencies to optimise working practices, customer engagement and income generation, which we expect to deliver long lasting benefits.

Government stimuli

In addition to these initiatives, the Government has also announced a strong package of measures to ensure lenders can continue to lend to mortgage borrowers as usual, including access to new, significant and cost-effective funding and reduced regulatory capital buffer requirements in this period of exceptional challenge.

The Bank of England has also reduced its base rate to a record low of 0.1%, allowing the cost of mortgages to be reduced even further. This will benefit all those buying a new house or moving home and create more re-mortgage and product transfer opportunities. Wider measures, including increased investment in all types of housing, should ensure the medium to long term outlook for our market remains very positive.

Peter Brodnicki, Chief Executive, commented: 

"Over 20 years we have built a high-quality distribution network, a leading consumer brand, and an exceptional management team that continues to adapt quickly to our new ways of working. The Group has a strong balance sheet, is cash generative and enjoys a healthy surplus over its regulatory capital requirement. To give ourselves additional flexibility to capitalise on potential opportunities quickly, we drew down the full £12m limit on our Revolving Credit Facility on 20 March 2020. We are in a stronger position than many to deal with the challenges that lie ahead and are confident in our ability to continue growing our market share, with a specific additional short-term focus on re-mortgages and product transfers.

MAB has a clear strategy and we continue to strengthen our proposition. During this pandemic our priority is to redeploy our resources where possible to focus on lead generation, telephone advice and remote working. We remain very optimistic about MAB's growth prospects in the medium to long term and intend to be in a strong position to react quickly and take full advantage of the opportunities that will present themselves in the future."







1 Costs associated with the acquisition of First Mortgage, including £0.4m of one-off acquisition costs, £0.2m amortisation of acquired intangibles and £0.4m of additional non-cash operating expenses relating to the put and call option agreement to acquire the remaining 20% of First Mortgage.

 2Adjusted cash conversion is headline cash conversion adjusted for increases in restricted cash balances of £2.2m in 2019 (2018: £1.0m) as a percentage of adjusted operating profit.

3 Based on average number of Advisers. Underlying basis excludes a one-off adjustment in H1 2018 of £1.7m for procuration fees awaiting processing.


  For further information please contact:

Mortgage Advice Bureau (Holdings) Plc

  Tel: +44 (0) 1332 525007

Peter Brodnicki - Chief Executive Officer


Ben Thompson - Deputy Chief Executive Officer


Lucy Tilley - Chief Financial Officer




Numis Securities Limited     Tel:  +44 (0)20 7260 1000

Stephen Westgate / Hugo Rubinstein / Laura White (Corporate Finance)

Media Enquiries: [email protected]






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