Mortgage Advice Bureau maintains dividend after mixed year

Mortgage Advice Bureau said in its final results on Tuesday that despite a challenging environment, it achieved a revenue increase of 3.8% in 2023 to £239.5m, and a notable 11.5% rise in gross profit, reaching £70.2m.

The AIM-traded firm said the improvement boosted the gross profit margin by two percentage points to 29.3%.

However, the group faced some headwinds, as evidenced by a decline in adjusted EBITDA by 8.1% to £26.7m, and a 14.8% decrease in adjusted profit before tax to £23.2m.

Statutory profit before tax dipped 6.8% to £16.2m, with the declines reflecting adjustments for various non-operational items.

On the operational front, Mortgage Advice Bureau increased its market share of new mortgage lending by 11%, reaching 8.3%.

That growth came despite a reduction in gross mortgage completions by 8% to £25.1bn, and a more significant 21% fall in gross new mortgage completions to £18.6bn.

The company also experienced a 4% decrease in adviser numbers to 2,158 and a slight reduction in the average number of mainstream advisers.

Despite those challenges, the firm said it had seen a positive trajectory in revenue per mainstream adviser, which increased 6% following the full impact of its acquisition of Fluent.

The proportion of revenue generated from refinancing activities also rose to 35%, indicating a shift in business focus towards more stable revenue streams.

As of 15 March, Mortgage Advice Bureau hosted 2,135 advisers, including 116 advisers from Fluent.

The company maintained its proposed final dividend at 14.7p, the same as in 2022.

“Against a very challenging backdrop in 2023, MAB continued its exceptional track record of outperformance and market share growth in all market conditions,” said chairman Peter Brodnicki.

“Despite the severe market downturn, we continued our investment across the entire business and remained resolutely focused on long-term growth.

“Our proposition for growth focused mortgage and protection firms is outstanding, underpinned by best-in-class technology, lead generation and infrastructure, and our aim is to continue to further increase MAB's differentiation versus our competitors and grow market share and profitability.”

Brodnicki said 2024 had started well, with both purchase and re-financing activity having picked up significantly.

“We believe this signals the early stages of a market recovery that builds towards a catch-up year in 2025, with pent-up demand continuing to be released as consumer confidence and affordability increase.

“Although we expect organic adviser growth to start building some momentum again in the second half as our AR firms gain more confidence in the sustainability of the recovery, recruitment activity in terms of new AR firms is exceptionally strong, reflecting the significant strides we have made in terms of our technology and lead generation developments, as well as how we have engaged with and supported our partner firms with the introduction and integration of Consumer Duty.”

Following an “exceptionally strong year” for the company’s most mature investment First Mortgage, Peter Brodnicki said strong progress had been made in terms of efficiencies and lead sources in all of its other AR investments, with adviser productivity in those firms being significantly higher than the average across the group.

“We expect a record performance from our investments this year and believe the portfolio will contribute to accelerated group profit growth over the medium term.”

At 1157 GMT, shares in Mortgage Advice Bureau Holdings were flat at 800p.

Reporting by Josh White for Sharecast.com.