Mortgage Advice Bureau sees FY profit above consensus
By Michele Maatouk
Date: Thursday 23 Jan 2025
(Sharecast News) - Shares in Mortgage Advice Bureau sparked on Thursday after the financial services firm said full-year pre-tax profit was set to be above consensus expectations and that it had outperformed the market.
In an update for the year to the end of December, the company said revenue rose 11% to around £266m, above the estimated 4% growth in UK gross lending for the same period.
It said it expects to report around 31% growth in adjusted pre-tax profit for the year to about £30.5m. This is approximately 4% ahead of consensus forecasts of £29.2m, excluding the £1.5m positive impact of the capitalisation of Midas platform internal development costs in 2024.
MAB said the number of mainstream advisers grew modestly in the second half, to 1,941 at the year-end from 1918 a year earlier.
However, lower-than-expected growth in adviser numbers was more than offset by a significant rise in productivity.
MAB said the average revenue per mainstream adviser grew about 12% to £138,000.
As far as current trading is concerned, the company pointed to "clear signs" of pent-up demand, evidenced by the fact that mortgage applications rose 15% on the quarter in the final quarter of 2024. MAB said it expects this positive momentum to be maintained.
It also noted that UK Finance forecasts gross new lending to rise 11% in 2025 to £235bn, and said this was a "realistic" estimate.
Chief executive Peter Brodnicki said: "Despite two challenging years in terms of UK mortgage volumes, I am very pleased with how MAB has performed. We have increased strategic spend over this period and are starting to see the benefits of this come through in the positive momentum we're building.
"We expect purchase transactions to steadily increase over the next year, whilst several years of strong refinancing transactions will provide additional opportunities for growth.
"We are seeing increased optimism among many of our ARs, and as a result, expect to see organic growth in adviser numbers start to return in a more meaningful way. Following a slower period in terms of new AR recruitment, we plan to onboard more firms this year while continuing to explore value-accretive acquisitions.
"The step up in productivity in 2024 has been very pleasing, so our focus for this year is on maintaining that momentum, supported by development in technology and AI, and our continued focus on lead generation."
At 1000 GMT, the shares were up 9% at 686.72p.
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