Mortgage Advice Bureau Regulatory News (MAB1)

28 January 2020

Mortgage Advice Bureau (Holdings) plc 

("MAB" or the "Group")

Trading Update 

Mortgage Advice Bureau (Holdings) plc (AIM: MAB1), one of the UK's leading consumer intermediary brands and specialist Appointed Representative networks, today issues a trading update for the year ended 31 December 2019, ahead of publishing its final results on Tuesday, 24 March 2020(1).

Revenue for the year increased by 16% to £143m, with strong organic revenue growth of 10% (11% on an underlying basis(2)) to £135m for the core MAB business driven by a 14% increase in the average number of core MAB Advisers for the year to 1,293 (2018: 1,130). First Mortgage Direct Limited ("First Mortgage"), which was acquired on 2 July 2019, contributed an additional £8m of revenue.

We increased the total number of Advisers at the year end by 20% to 1,457 (2018:1,213), with organic growth in adviser numbers of 13% or 162 to 1,375, supplemented by the 82 Advisers brought into the Group with First Mortgage. 

Activity in the housing market was impacted by the continuing political and economic uncertainties associated with Brexit, particularly in the earlier part of 2019, and we saw a drop in underlying average annual revenue per Adviser for the core MAB business of 3%. However, we have seen improving productivity through H2 2019, relative to H1 2019, and we expect the UK General Election result along with the many focused initiatives that MAB has in place, including process efficiencies and lead generation, supported by our technology developments, to generate growth in revenue per Adviser in 2020, irrespective of the level of activity in the broader market. 

UK Finance(3) estimates that gross new mortgage lending for 2019 was £266bn, a 1% reduction on 2018. The Intermediary Mortgage Lenders Association's current estimates (published post the general election) are £268bn for gross new mortgage lending in 2020 and £275bn in 2021.

The Group's profit before tax for the year ended 31 December 2019 is in line with the Board's expectations. At 31 December 2019, the Group had a strong balance sheet with a cash position of £21m, including £7m of unrestricted cash balances. At the year end the Group had no borrowings drawn down on its revolving credit facility (which was put in place at the time of the First Mortgage acquisition), demonstrating the strong cash generation of MAB's business model.

(1) It is expected that a proposed final dividend in respect of the year ended 31 December 2019 will be paid on 29 May 2020 to shareholders on the register at close of business on 1 May 2020.

(2) Underlying basis excludes a one-off adjustment in H1 2018 of £1.7m for procuration fees awaiting processing

(3) UK Finance estimates for gross new mortgage lending for 2020 and 2021 were published before the general election in December 2019

Peter Brodnicki, CEO of MAB, said:

"MAB has delivered another strong performance despite the prolonged political and economic uncertainties throughout 2019. We continue to deliver on our strategy to grow our market share in all conditions by investing to ensure sustainable growth whilst maintaining a strong financial position. 

"We are capitalising upon our protection and lead generation initiatives to further improve performance and continue to pilot our new technology platform, with rollout to a number of our ARs in the first half of 2020. These initiatives are important recruitment drivers for ARs, Advisers and lead sources."

Market Abuse Regulation (MAR) Disclosure

The information contained within this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulations (EU) No 596/2014. Upon the publication of this announcement, this inside information is now considered to be in the public domain.

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 / Hugo Rubinstein (Corporate Finance)

Michael Burke (Corporate Broking)

Media Enquiries:

investorrelations@mab.org.uk