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25 Jan 2024 07:00
25 January 2024
Mortgage Advice Bureau (Holdings) plc
("MAB" or the "Group")
Trading Update
Mortgage Advice Bureau (Holdings) plc (AIM: MAB1) today issues a trading update for the year ended 31 December 2023, ahead of publishing its final results on Tuesday, 19 March 2024.
In September 2023 the Board took a cautious view on expected activity levels for Q4 2023 and hence the outlook for the full year. Actual trading was better than anticipated in Q4 2023 and the Board now expects the Group to report an adjusted profit before tax that is slightly ahead of the current market consensus.
UK Finance's latest estimate of gross new mortgage lending for 2023 is £226bn[1], representing a 28% reduction on 2022. Despite this difficult market, the Group increased its revenue for the year by 4% to circa £239m.
As expected, the total number of advisers at the year-end was down 4% to 2,158[2] (2022: 2,254), including 117 advisers at Fluent, with the average number of mainstream[3] advisers during the year down 2% to 1,940 (2022: 1,988). The number of mainstream advisers at the year-end was down 8% to 1,918 (2022: 2,074).
Current Trading and Outlook
The underlying level of demand for home ownership and home moves remains strong. As the cost of fixed rate mortgages started to reduce at the end of last year, we saw early signs of increased purchase activity as well as re-financing. This pick-up in mortgage volumes has continued into January, with written volumes substantially higher than in January 2023 in the aftermath of the mini-budget. Whilst uncertainty remains in the wider political and geopolitical environment, current trading is encouraging.
MAB remains in a very strong position to capitalise on any market recovery and the inevitable catch-up in house purchase transactions that will follow.
Whilst no organic adviser growth has been assumed for this year, we expect some of our Appointed Representative (AR) firms to resume recruitment earlier than planned if the current momentum continues, with the Group returning to previously achieved levels of adviser growth in 2025. In terms of the addition of new AR firms, activity levels built strongly in H2 2023, and continue to do so. Our delivery of technology, lead generation and retention initiatives are proving compelling, and we expect that to be reflected in our recruitment of new firms this year.
We continued to invest in our proposition throughout 2023, to ensure the strongest possible recovery and continued market share growth in 2024 and beyond. Current trading is encouraging and in line with expectations.
Peter Brodnicki, CEO of MAB, commented:
"2023 was an exceptionally challenging year with consumer confidence heavily impacted, resulting in many customers deciding to delay their house purchase or re-financing.
"Against this difficult backdrop I am very pleased with how MAB has significantly outperformed the market. To ensure we are in the best possible shape when market conditions improve, we have continued to invest across the entire Group to drive lead flow and deliver optimal business and adviser efficiency. There is a great deal to be positive about, and our technology developments and lead initiatives, including the addition of Fluent, have broadened our addressable market and strengthened our growth plans."
Enquiries:
Mortgage Advice Bureau (Holdings) plc +44 (0)1332 525007
Peter Brodnicki, Chief Executive Officer
Ben Thompson, Deputy Chief Executive Officer
Lucy Tilley, Chief Financial Officer
Nominated Adviser and Joint Broker +44 (0)20 7260 1000
Deutsche Numis
Stephen Westgate / Giles Rolls
Joint Broker +44 (0) 20 7418 8900
Peel Hunt LLP
Andrew Buchanan / Mike Burke
Media Enquiries:
investorrelations@mab.org.uk
The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 as it forms part of UK Domestic Law by virtue of the European Union (Withdrawal) Act 2018 ("UK MAR").
[1] UK Finance's previous estimate of gross new mortgage lending for 2023, published in December 2022, was £275bn.
[2] Includes a total of 240 advisers at 31 December 2023 who are later life advisers or advisers in directly authorised firms that use MAB's subsidiary, Auxilium, a specialist protection service provider, for protection. For both later life and directly authorised advisers the fees received by MAB represent the net income received by MAB as there are no commission payouts made by MAB.
[3] Excludes directly authorised advisers, later life advisers and advisers from associates in the process of being onboarded under MAB's AR arrangements.
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