Mortgage Advice Bureau (... Share Discussion Threads

[gsbmba99] 20/3/2018 10:57

"Zeus view: ... Management has indicated that it intends to “invest in IT” through increased day-to-day expenditure. We have increased our forecast IT costs materially: this results in a £0.3m increase in our forecast administration costs (N.B. 2017 administration costs were £0.1m below our forecasts). For 2018 we expect: 18% yoy growth in gross profit to £30.4m (2017: £25.9m); Gross profit margin of 23.2% (2017: 23.8%); 16% yoy growth in PBT to £16.8m (2017: £14.5m); 16% rise in FD adj EPS to 26.9p (consensus 2018: 26.5p 2017: 23.2p); 16% rise in the total DPS to 24.8p (consensus 2018: 24.6p; 2017: 21.4p). For 2019 we expect FD adj EPS to rise 16% to 28.7p (consensus: 30.7p)." ( )

[gsbmba99] 26/2/2018 13:01

Jan 18 gross mortgage lending figures are out. £21.9bn up 9.8% on £20.0bn last year. UKFinance spreadsheet here:

[gsbmba99] 23/2/2018 08:55

Wasn't previously aware that MAB published a National Mortgage Index. The most recent one is here:
Looks like the National Mortgage Index is published on the last day of the month covering the previous month. You can also find brief company commentary on other housing market surveys (eg Rightmove, Halifax) under market news:

[gsbmba99] 31/1/2018 08:23

LSL has purchased a company called Personal Touch for £5.4m (including assumed intercompany debt). Apparently, Personal Touch has an adviser network of 200 firms with 474 advisers that originated £5.1bn of mortgages in 2017. Not sure I understand why a firm that is a little less than 50% the size of MAB is only worth £5.4m. I'm assuming there are very material differences in the respective business models - eg Personal Touch has very small revenue share and/or doesn't offer the compliance oversight - that would explain the enormous gap in valuations.

[chapchip] 27/1/2018 08:59

exchange of contracts.......its more 0.35%...on resi, 0.45% on BTL and 0.175 - 0.20% on Product transfers

[chapchip] 25/1/2018 11:15

lowest mortgage approvals in Dec since 2013.....not seeing that myself as don t think we ve ever been so busy

[gsbmba99] 25/1/2018 10:56

Dec 17 CML gross mortgage lending estimate is £20.2bn which is +1.2% on Dec 16. 2H17 gross mortgage lending was £135.5bn, +8.4% on the £125.0bn in 16. Full year estimate is £256.1bn, +4.5% on £245.1bn in 16. Can't find any commentary. Commentary on the numbers has been haphazard since the CML was put under the UK Finance umbrella.

[gsbmba99] 22/1/2018 17:43

"Zeus view
This trading update confirms MAB is delivering double-digit revenue, profit and dividend growth through growing adviser numbers and benefits of scale.
Unrestricted cash balances have risen by more than £2.1m (June 2017: £10.9m): this is encouraging. We leave our PBT, EPS and DPS forecasts for 2017 and 2018 unchanged (page 2).
For 2017 we expect:
16% yoy growth in gross profit to £25.7m (1H17: £12m; 2H17E: £14m);
Gross profit margin of 23.7% (1H17: 24.1%; 2H17E 23.3%);
13% yoy growth in PBT to £14.2m (1H17: £6m; 2H17E: £8m);
13% rise in EPS to 22.9p (1H17: 10.4p; 2H17:12.5p);
15% rise in the total DPS to 21.0p (interim DPS of 9.5p; final DPS: 11.5p)
For 2018 we expect EPS to rise 21% to 27.8p (consensus: 26.5p)."
From

[gsbmba99] 22/1/2018 09:42

The borrowers refinancing expiring deals with another lender is included in the UKFI (CML) market estimates. What isn't included is borrowers who refinance with the same lender. This market has been opening up to MAB representatives, as highlighted in the FY16 full year results, and is worth about £90bn. More remortgaging has offset lower transactions from home movers. MAB should still be able to grow at the rate of adviser growth if overall mortgage market "pretty much flat" assuming no adverse change in mix or margins.

[caterham88] 22/1/2018 09:27

The overall mortgage market forecast to be pretty much flat, but with many borrowers on fixed interest deals that will expire, won't the demand for MAB's services be pretty positive?

[gsbmba99] 22/1/2018 08:06

Trading update out. FY17 revenue of £109m, +17% YoY driven by 14% increase in avg advisers. Total advisers +13% to 1,078 at period end. 3% increase in revenue per adviser. PBT in line with expectations.

[gsbmba99] 16/1/2018 08:11

Trading update apparently on 22 Jan

[gsbmba99] 11/1/2018 18:57

Wasn't familiar with the fund. Turns out it's run by Rosemary Banyard who co-managed or worked together with Andy Brough at Schroders. They had a pretty stellar track record, I think. From the November fund fact sheet: "New investments have included Mortgage Advice Bureau, which is building a technology based platform in the UK mortgage broking market. The business has many characteristics I like, including being a highly scaleable platform in a regulated industry, achieving very high returns on equity, showing discipline in capital allocation, having a conservative balance sheet and having significant director ownership. A UK B2B market share of around 4% offers plenty of room for growth and the company is also beginning to expand overseas."

[caterham88] 11/1/2018 15:31

Today's Share magazine mentions MAB1 as being a recent purchase by CFP SDL Free Spirit fund.

[gsbmba99] 10/1/2018 09:57

Nice find, edale. ( [...] ) This link has a video interview with Peter Brodnicki. The technology improvement comments match comments from chapchips further upthread. The recent multiple expansion suggests market coming around to viewing this as a franchise/platform/infrastructure play with attractive, virtually cap-ex free growth prospects. If Brodnicki suggests margins could expand over time (not clear whether that's at the AR or MAB1 level), all the better.

[edale] 09/1/2018 18:10

Worth a read :-

hxxp://www.proactiveinvestors.co.uk/companies/news/189727/mortgage-advice-bureau-chief-says-technological-shake-up-will-create-opportunities-189727.html

[gsbmba99] 28/12/2017 11:12

CML have released Nov gross mortgage lending estimate ( ) (bottom of page in Nov 17 spreadsheet) but there's no press release I can find. Anyway, Nov 17 estimate is £23.1bn, +9.2% on £21.2bn in Nov 16. 2H to date is £115.2bn, +9.6% on £105.1bn in Jul-Nov 16. An unchanged Dec 17 figure (£20bn) would give us £255.8bn for the year (+4.4%) and £135.2bn for 2H (+8.1%). Seems pretty healthy all things considered.

[gsbmba99] 18/12/2017 13:39

Latest set of CML forecasts for gross mortgage lending were released a couple of days ago ( ). 2017 - £255bn up from £248bn. 2018 - £260bn up from £252bn. 2019 - newly estimated at £271bn. "We are slightly more optimistic about the next two years than we were a year ago. We expect more first-time buyers over the next two years, helped in part by competitive mortgage rates and government housing schemes. Home movers numbers have recovered a little in 2017, but look set to remain flat over 2018 and 2019, as they have benefitted less from government support and have been largely left to fend for themselves. The number of home owners re-mortgaging with a new lender has grown strongly in 2017, and our expectation is for this to continue over the medium term."

[chapchip] 12/12/2017 09:44

hi

sorry I don t know anything about that.......assume MAB will pay for it

[gsbmba99] 12/12/2017 09:14

Sounds good. Do you have a view on the proposed direct to consumer advertising campaign which is scheduled to begin next year? Do you know who's paying for it? Which medium (TV?)?

[chapchip] 12/12/2017 08:48

theres lots of reasons to be cheerful within MAB.....

new processes internally and with lenders next year should reduce time spent on a data entry for applications, new protection process should increase penetration, the product switch market will continue to grow

advisers should be more productive per man hour going forward as technology reduces the paperwork

[gsbmba99] 12/12/2017 08:30

Belvoir Lettings provided an update on their acquisition of Brook, a MAB affiliate. Brook's net written business (net commission after deduction of MAB1 share?) for October and November was £570k (£285k/month or £3.42m/year annualised) which is +57% on last year or +40% on the average of January to late July when it was acquired. Thus far they are covering 66% of the 39 Newton Fallowell offices (their sales focused brand). Three new mortgage advisers in training and further recruitment planned. Mortgage offering to be rolled out to other sales-focused Belvoir and Northwood offices starting in January. Probably not material to MAB1 (guessing about 3% of advisers) but encouraging progress nonetheless.

[gsbmba99] 27/11/2017 09:01

CML October 17 gross mortgage lending estimate is £23.1bn +13.5% on Oct 16. 2H17 is £91.7bn or +9.3% on Jul-Oct 16. Showing good YoY growth in second half.

[gsbmba99] 27/10/2017 08:46

CML September 17 gross mortgage lending estimate is £21.4bn +4.5% on Sep last year and -11.6% on August 17. 2H17 is £68.6bn or +7.9% on Jul-Sep 16. Reasonably healthy year on year 2H gains.