Mortgage Advice Bureau (... Share Discussion Threads

[gsbmba99] 27/5/2021 09:39

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 10:21

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 15:41

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 08:02

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 22:06

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 10:04

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 20:19

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

[spann_703] 17/4/2021 10:29

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 18:12

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 12:14

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.

[tongosti] 05/11/2020 14:45

Proper breakout fellas

[tongosti] 03/11/2020 16:46

Initiated here today. Odds favour a further advance from existing levels. If not - honour thy stop!

[energeticbacker] 30/9/2020 09:24

Mortgage Advice Bureau showed the usual resilience in its interim results for the six months ending 30 June 2020.

This remains a cracking business, reflected in the very high returns on equity of c40%, excellent cash flow and the relatively high rating given the underlying sector. Quality is generally worth a premium!

More on the Investor's Champion website.

[gsbmba99] 18/6/2019 08:47

Do any of the industry folks have a view of First Mortgage? Am I right in thinking that First Mortgage employing their own advisers represents a shift from MAB's current strategy?

[gsbmba99] 24/5/2019 16:07

Q119 product transfer data shows limited growth by value of product transfers (£39.2bn vs £38.8bn last year) but encouraging that a larger proportion (£22.7bn vs £19.9bn last year) were advised with advised share of value inreasing to 57.9% from 51.3% last year. That's 15.3% growth in the advised value.

[gsbmba99] 21/3/2019 15:53

For 2018 as a whole, product transfers represented 1.196m (of which 52.6% advised) mortgages and £159.6bn (of which 54% advised)in value. Seems like advisory penetration of product transfer market very good considering. New mortgage issuance is about 74% advised from memory. Underlying product transfer stats here -

[gsbmba99] 03/3/2019 16:22

Looks like UK Finance have again altered how they report data. Gross mortgage lending now appears to be part of household finance report with a data series that looks like but doesn't match previously reported numbers. Irritating. Anyway, Jan 19 is supposedly £21.6bn, -1.5% on Jan 18.