Mortgage Advice Bureau (... Share Discussion Threads

[chapchip] 10/10/2022 08:30

looks like Liontrust have unloaded 11m shares plus market sentiment of how housing market may be affected by the current interest rate turmoil.

£14 to sub £6 in 10 months is not good

[judyelliot] 09/10/2022 11:55

why has this share price reversed direction in recent months, when on the results it seems to be expanding and doing pretty well?

[chapchip] 19/5/2022 09:25

km18...wrong thread for the pub outfit

[km18] 18/5/2022 14:23

Mitchells & Butlers (MAB) posted Interims this morning. The business has bounced back from COVID, posting like-for-like sales growth of 1.0% over the first half versus FY 2019 (pre Covid-19) and has seen encouraging like-for-like sales growth of 3.8% versus FY 2019 through the second quarter. Total revenue was £1,159m, operating profit £121m, profit before tax £57m and basic EPS 7.7p. Net debt reduced to £1,253m (HY 2021 £1,472m), excluding £483m of IFRS 16 lease liabilities (HY 2021 £541m). Sales recovery is ongoing, cost headwinds are a challenge, management are pushing forward with capital investment plans which are delivering strong sales uplifts. Valuation looks pretty attractive with forward PE ratio under 10, profitability ratios are decent for the sector, operating margin should return to double digits. Share price is in a 15 month correction which appears to be extending. There is no rush to buy yet, but there are plenty of positives. M&B is a share to monitor for now....

...from WealthOracleAM

[km18] 22/2/2022 18:15

...from last year...

Mortgage Advice Bureau published its H1 interims earlier this week and they were impressive. Revenues grew 46% versus H1 20 to £92.4m, and they were up 52% versus H1 2019. Statutory profit before tax was up 77% on the year to £10.8m, basic EPS was up 63% to 16.5p. An interim dividend of 13.4p was reinstated. Growth has continued post reporting period as well. Numbers of advisers are up to 1800 and a 49% stake in Evolve FS Ltd, a leading specialist new build mortgage broker has been acquired. The company is delivering solid and very profitable growth – RoE 50% and RoCE 42.5%. Unsurprisingly valuation is not cheap, forward PE ratio at 27 is bottom quartile for the sector. PS ratio is mid-range at  around 3.6. Share price is currently in a pull-back, around 20% below early August peak. With valuation where it is and a share price correction underway there is no rush to buy MAB1 just yet. But the business is solid and should be worth owning at some point in the next 6-12 months. Monitor for now....

...from WealthOracleAM

[gsbmba99] 02/6/2021 16:46

I tend to skew heavily towards tech and healthcare so I haven't got BLV but know many who do and can see the attractions. Dorian and Louise at BLV are doing a good job of executing (as is TPFG though they aren't a MAB1 client, I don't think, and I don't know them as well). I think people tend not to investigate the impact of the differential operating/ownership structure of some of the estate agency companies thinking they're all the same. There's a huge difference between BLV/TPFG as franchisors of estate agency brands relative to being an actual estate agency. The focus on lettings over sales is also a key attraction.

[spann_703] 02/6/2021 16:29

Agreed, gsbmba99. I wonder how many investors [like myself] own shares in both companies. They both exhibit similarly-good quality metrics - I think BLV still looks decent value too, despite the recent appreciation in share price.

[gsbmba99] 02/6/2021 16:20

Belvoir, MAB1's largest customer, is acquiring the Nottingham Mortgage Services Limited unit from Nottingham Building Society. The Nottingham Building Society is entering into a 10 year agreement with MAB to provide mortgage and protection advice, through Belvoir as an appointed representative of MAB, to its members via its branch network and over the phone. From the finnCap BLV note this morning: "The Nottingham currently has 50,000 18-39-year-old Lifetime ISA savers (which is expected to increase to 100,000 within a few years) the majority of whom are highly likely to need a mortgage for the first time in the future. If these potential new clients convert over a three to five year period (which would likely be from 2024) this could represent a significant increase on the 12,000 mortgages Belvoir arranged in 2020." Sounds like a good outcome for BLV and MAB1.

[gsbmba99] 27/5/2021 10:39

Encouraging news from the AGM trading update of Belvoir, MAB1's largest customer: "Additionally, the financial services division continues to achieve substantial growth with net income up 24% in part arising from an increase in Belvoir's adviser network, up 12 since the year end to 214, and in part from the high demand for mortgages resulting from the increase in property transactions."

[chapchip] 26/4/2021 11:21

absolutely........many strands to the revenue streams in addition to the mortgage product

Buildings & Contents
Life Assurance etc
Wealth advisory - pensions and investments
Equity Release
Specialist funding - commercial & bridging etc
Solicitor referrals

[gsbmba99] 23/4/2021 16:41

Thanks for the insight. It would certainly seem to be something that could be enhanced electronically with account follow-up/reminders without a huge amount of wasted effort. Perhaps the BLV model where they have separate remote call centre staff and in estate agent staff represents a good model. It seems apparent from management presentations that MAB1 are keen to extend the useful life of a customer relationship into areas prior to and after the normal mortgage years.

[chapchip] 23/4/2021 09:02

the recurring revenue streams are being looked at.

There is a significant amount of brokers that only service the first hit and then the customer drifts off, especially those serving new build.

Brodnicki is very driven regarding customer retention and the message being driven out is for firms to make sure they focus on retaining and servicing back book.

The majority of deals are either 2 or 5 yr......so there is definitely a recurring revenue opportunity for firms in terms of the mortgage plus the associated insurances that clients need

[gsbmba99] 22/4/2021 23:06

I was encouraged to hear Dorian Gonsalves, CEO of Belvoir (MAB1's largest external customer), say in the Investor Meets Company presentation that he expected adviser numbers to grow from 202 on 31 Dec 20 to about 240 at year end or about 10/quarter. One thing I would love to learn more about is how MAB1 think about lifetime customer revenue and whether they have stats on that. There could be a significant element of "recurring" revenue albeit on 2-5 year intervals instead of yearly. I would also be interested to know if there were any publicly available sources for mortgages by type, in particular how long the fixed rate period is. Let me know if anyone has ideas.

[chapchip] 22/4/2021 11:04

unlikely a problem........MAB continues to grow adviser numbers which in turn grow turnover.

95% mortgages becoming more freely available, so would continued strong numbers

its had a strong run up to £13 so maybe some profit banking

[typo56] 21/4/2021 21:19

Is there a problem here, or simple a bit of profit taking?

[spann_703] 17/4/2021 11:29

Thanks for the considered and informative response, gsbmba99.

As you say, the higher quality AIM shares are not cheap. All things being equal, I intend to continue to hold MAB going forwards - holding high quality businesses for lengthy periods of time, despite high valuations, has generally yielded decent results.

Currently watching the Belvoir results presentation, another decent business but one which is much less expensive IMO. I note they actually took profits on the sale of some MAB shares during the past year.

[gsbmba99] 14/4/2021 19:12

I think the board is very quiet for a number of reasons. First, the company makes no effort to engage with individual shareholders. The fact that Numis is the broker also means individuals can't get access to research notes. Second, I suspect the company is not well understood by individuals. The name of the company would lead you to believe it dispenses mortgage advice but I tend to think of it more in the vein of SaaS albeit operating on a revenue share.
I've been a shareholder since 2016 and think it's a very strong business with good potential to grow revenue at low double digits. In previous interviews, Brodnicki has said that MAB1's pool of ARs are growing adviser numbers at roughly 8% and the company seeks to augment this growth by winning over new ARs to get to their target of 15% adviser growth. So, about half the growth happens without the company lifting a finger. All other things being equal, if you grow advisers at 10-15%, you should grow revenue at 10-15%. They're about 6% or so market share so there's still plenty of room to grow. To the naked eye, the profit margins don't look particularly exceptional but they actually are extraordinary. Only 25% (roughly) of the company's revenue is their own (75%, roughly, is paid to the ARs with holdbacks). So the 12.5% net income margin (roughly) on 25% (roughly) of own share of revenue actually works out to 50% net income margin on their revenue share.
It is definitely expensive. The higher quality AIM shares do tend to trade at quite high valuations. Might reflect IHT considerations.

[spann_703] 14/4/2021 13:14

One of the quietest boards on advfn. I always take that as a good sign, and apologise for disturbing the peace :-D

Still a good business with fantastic ROCE, and has had a great run-up. Feels like there has been consistent buying pressure this year. Looking expensive in terms of P/E valuation though, but on the other hand given post-lockdown demand / short-term stamp-duty relief maybe a boom is on the cards.

Any thoughts / anyone still out there?

[chapchip] 26/2/2021 16:15

where has the original thread gone ??

[tongosti] 19/1/2021 14:05

Been scaling over the last few days. Today am out completely. Not more than +10% for a two months+ commitment but still not to be sniffed at.

[tongosti] 04/1/2021 11:06

Let's hope gents this will be the start of the breakout!

[tongosti] 31/12/2020 15:18

Let's see if the new year will push up meaningfully higher from here.

[tongosti] 04/12/2020 12:21

Is this baby ever going to move out of the current trading range? One hopes so ...

[tongosti] 19/11/2020 10:47

Gigantic volumes traded this morning. Still in a trading range so we will hopefully get going soon.