Mortgage Advice Bureau has seen revenue increase by 28 per cent over the first six months of the year to £31.2m, driven by a 20 per cent rise in the average number of advisers in the year to the end of June to 638.
This came from a combination of newly appointed representatives and the organic expansion of existing appointed representatives, while growth was also helped along by procuration and client fees both going up since the implementation of the Mortgage Market Review last April.
Adviser numbers now total 779 as at 18 September.
The network’s gross profit margin reduced marginally to 24.3 per cent, from 24.5 per cent during the previous period, with the group receiving a slightly reduced margin as existing ARs grow their revenue organically through increasing adviser numbers.
Chief executive Peter Brodnicki explained that this year, MAB continued to attract larger AR firms, although typically, they join on lower than average margins due to their existing scale.
“As a result we expect to see some erosion of our gross profit margin due to both the continued growth of our existing appointed representatives and the acquisition of new larger appointed representatives.”
Gross profit also increased in this period, up 27 per cent to £7.6m.
Overheads as a percentage of revenue also rose, up to 13 per cent during the first six months of 2015, compared to 11.9 per cent during the same time last year.
The results statement read that total additional costs of £42,000 during the first half comprised £26,000 associated with being listed on the London Stock Exchange, along with additional Financial Services Compensation Scheme of £16,000.
These costs are not treated as exceptional as the directors consider them to be ongoing. Excluding them, overheads as a percentage of revenue would have slightly improved to 11.7 per cent. Mr Brodnicki said that he expects to see a reduction in overheads as a proportion of revenue.
Earlier this summer, MAB’s pre-close trading update revealed that revenue growth allowed it to absorb ongoing listing costs and increased Financial Services Compensation Schemes levies, with an end of June balance sheet cash position of over £11.5m, including over £6.9m of unrestricted cash balances.
MAB’s intermediary market share continued to rise and in the first six months of the year stood at 69 per cent, with new lenders entering the market with “highly intermediary-focussed business models”, according to Mr Brodnicki.
“Recent speculation that a base rate rise may be on the horizon has triggered the first signs of increased activity in the remortgage market as borrowers look to secure mortgage deals at the record low rates of interest currently available.”
He continued that the network will maintain a focus on specialisation in terms of estate agency (including online), new-build, mortgage shops and telephone based advice, with plans to extend this specialist approach to buy-to-let.
peter.walker@ft.com
