Mortgage Advice Bureau Regulatory News (MAB1)

28 July 2022

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 six months ended 30 June 2022, ahead of publishing its interim results on 27 September 2022.

Group revenue for the six months ended 30 June 2022 increased to circa £95m (H1 2021: £92m), up 3% on a comparative period in which mortgage completions had been considerably boosted by the stamp duty holiday changes at the end of March and June 2021.

The average number of mainstream1 advisers during the period increased by 19% to 1,890 (H1 2021: 1,584) with total adviser numbers as at 30 June 2022 up 8% to 2,0342 (31 December 2021: 1,885).

During the first half, the time taken to complete a property purchase increased by approximately one month compared to H1 2021. A number of factors have been delaying transactions, including conveyancing and local authority capacity constraints, down-valuations and expiring mortgage offers that need to be reconsidered and reissued by lenders due to the frequency of UK base rate increases in the period.

Despite the rising cost of living for UK households and further national and geopolitical uncertainty, the level of consumer demand for housing remains strong.

The resilience of demand from people moving home is supported by UK full employment, high levels of household savings and, for those who are subsequent movers, rising housing equity levels over recent years. Lenders also have strong liquidity levels, meaning mortgage availability is now close to pre-pandemic highs, thereby helping market activity to remain healthy.

Although interest rates have risen and will most likely continue to rise over the next 12 months, current interest rates remain near historical lows. As anticipated, increases in interest rates have stimulated more refinancing activity, with mortgage borrowers now more motivated than ever to secure the best possible rate to help their household budgeting. 

1 Excludes directly authorised advisers, later life advisers, and advisers from associates in the process of being onboarded under MAB's AR arrangements.

2 Includes a total of 67 advisers at 30 June 2022 who are either directly authorised or later life advisers. The directly authorised advisers are employees of a firm previously authorised under an Appointed Representative agreement with MAB until 7 December 2020. MAB will continue to provide services to this firm, which is now directly authorised by the FCA. 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. Also includes 14 advisers from associates, who are in the process of being onboarded under MAB's AR arrangements. These advisers will shortly become mainstream advisers. Until these 14 advisers become onboarded fully as mainstream advisers, MAB currently only recognises its share of profit after tax from these associates.

Current trading

The Group has started H2 2022 with a larger than usual pipeline of written business, due to the extended timeframe for completion of housing purchase transactions, and refinancing activity continues to be strong. Whilst we expect consumer demand to cool a little over the coming months, transaction levels are expected to remain healthy.

We were delighted to complete the acquisition of The Fluent Money Group earlier this month, which will allow the enlarged Group to benefit from national lead generation across our entire business sooner than initially anticipated. This reinforces our confidence in the outlook for 2023 and beyond.

Following the period end, the Group increased its stake from 49% to 75% in Vita Financial Limited, a leading protection and general insurance advice firm. This is a strategically important step for the Group as we look to achieve an even stronger market presence in this area.

The Group's adjusted profit before tax for the year ending 31 December 2022 is expected to be in line with market expectations.

Peter Brodnicki, CEO of MAB, commented:

"Despite the obvious frustrations with the pace of completion of housing purchase transactions, our growth plans have been further boosted this year by the acquisition of Fluent Money.

"The expected performance of this strong business, and the leverage it will provide to drive new and significant lead flow into MAB, added to continued strong adviser growth and ongoing enhancements in our technology platform, further supports our plan for accelerated growth into 2023 and beyond regardless of market conditions."

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

Numis Securities Limited

Stephen Westgate / Giles Rolls

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").