TIDMMAB1
RNS Number : 1758H
Mortgage Advice Bureau (Hldgs) PLC
26 July 2023
26 July 2023
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 2023, ahead of
publishing its interim results on 26 September 2023.
Group revenue for the six months ended 30 June 2023 was up 21%
to GBP116m (H1 2022: GBP96.5m), with organic growth of 1% despite
the market seeing a 40% drop in new mortgage approvals following
the mini-budget in September 2022.
The total adviser number as at 30 June 2023 was down 6%, as
expected, to 2,109(1) (31 December 2022: 2,254). The average number
of mainstream(2) advisers during the period increased by 4% to
1,966 (H1 2022: 1,890), and on an organic basis the average number
of mainstream advisers reduced by 4% to 1,814 (H1 2022: 1,890),
with a circa 5% increase in organic revenue per adviser.
Due to the market turmoil that followed the mini-budget, we
entered 2023 with a lower than expected pipeline of written
mortgages and new Appointed Representative ("AR") firms. In
addition, our existing AR firms focused on efficiency and paused
recruitment, leading to a reduction in adviser numbers.
UK gross new mortgage lending for the first five months of the
year was 28% lower than in the same period in 2022, as rising costs
of living and higher interest rates created further affordability
constraints and reduced consumer confidence. The residential
purchase segment was down 30%, residential re-mortgaging down 18%
and buy-to-let down 46%. Re-financing (re-mortgaging and product
transfers combined) activity performed better overall as it was
bolstered by product transfers, with product transfer lending data,
currently only available for the first quarter of the year, showing
an increase of 12% for Q1 2023 compared to Q1 2022.
UK Gross new mortgage lending for the five months to 31 May,
GBPbn
2023 2022 % (+/-)
------- -------- -----------
Residential purchase 44.0 62.8 -30
------- -------- -----------
Residential re-mortgage 28.8 35.2 -18
------- -------- -----------
Buy-to-let 12.1 22.6 -46
------- -------- -----------
Other 4.6 4.3 +7
------- -------- -----------
Total 89.5 124.8 -28
------- -------- -----------
Source: UK Finance
The strength of the MAB model has again ensured a significant
outperformance of the market and a continued growth in the share of
gross new mortgage lending to 8% for the five months ended 31 May
2023(3) (H1 2022: 6.8%), despite the expected reduction in overall
adviser numbers. The Group continues to grow its market share due
to the high quality of its AR firms and its strong and resilient
lead sources.
Current trading and outlook
The new mortgage approvals reported in Q2 2023 suggested that
activity levels had started to improve. However, market conditions
are now likely to toughen further in H2 2023, driven by a continued
rise in interest rates and fewer consumers opting to purchase or
move home at a time when mortgage rates are at or close to peak
levels in this current interest rate cycle. However, we expect
re-financing will continue to perform strongly.
The underlying level of demand for home ownership and home moves
remains strong, and we are confident that once inflation is under
control and mortgage rates have peaked or start to fall back, we
will see demand and activity strengthen again. It is too early to
anticipate when that will happen, but when it does MAB will have
increased market share and will be in a very strong position to
capitalise on the recovery and the inevitable catch up in house
purchase transactions that will follow.
H1 has seen our new AR pipelines build back to pre-mini-budget
levels and we expect this strong activity to continue throughout
H2. Organic adviser growth will return when the economic outlook is
more certain, which will enable our AR firms to plan with far more
confidence.
Despite the strengthening H2 headwinds, trading is currently in
line with market expectations and the Group is well positioned to
deliver further growth as the market recovers.
Peter Brodnicki, CEO of MAB, commented:
"We had hoped to be in a period of interest rate stability as we
entered Q3, followed by a resumption in organic adviser growth in
Q4. Instead, we find ourselves in an environment of continuing
interest rate rises, reduced affordability, and cost of living
increases, all of which are naturally impacting consumer
confidence. Despite strong underlying demand for property, some
buying decisions are understandably being delayed by our customers
until we have a more stable economic and interest rate
environment.
"Despite the additional market pressure, I am delighted with how
MAB is performing and how our market share continues to grow.
Re-mortgages and increasing numbers of product transfers currently
represent around 60% of our written transaction volumes. This will
deliver MAB a greater number of re-financing opportunities in the
medium term, with the Group's advisers performing particularly
strongly in this area.
"Despite the signs of a market recovery being further off than
we expected three months ago, business efficiency continues to
increase, adviser productivity has been maintained, and all
strategic initiatives continue to progress well. The Group is well
positioned to deliver further growth as the market recovers."
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
Numis Securities Limited
Stephen Westgate / Giles Rolls
Joint Broker:
Peel Hunt LLP
Andrew Buchanan / Mike Burke +44 (0) 20 7418 8900
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 Includes a total of 188 advisers as at 30 June 2023 who are
either directly authorised or later life advisers. For both
directly authorised and later life advisers the fees received by
MAB represent the net income received by MAB as there are no
commission payouts made by MAB.
2 Excludes directly authorised advisers and later life advisers.
3 UK gross new mortgage lending values for June 2023 are not yet available.
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END
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