Mortgage Choice expects uplift in confidence after another year of dampened consumer and business confidence

Mortgage Choice has announced an above-target result for 2013 with a net profit after tax of $15.8 million – up 5%. 

“Delivering solid, above target results for this financial year, the group has exceeded many of its financial goals,’’ the Mortgage Choice chief Michael Russell says.

Russell says the group is expecting ‘’an uplift in confidence’’ next year.

‘’The property market is already showing signs of improvement in terms of property price growth, strong auction clearance rates and steady increases in housing finance commitments, which is reflected in our recent, strong home loan approvals.”

‘’Our core mortgage broking business also achieved a solid result, posting its best cash result on record and the highest annual settlements since 2010.

‘’At the same time we expanded the network of mortgage brokers by 2.3% to reach a franchise footprint of 395 - the highest count since February 2009.

Group revenue on a cash basis was $150 million - up 4.2% on the year – and the cash gross profit rose to $57 million - up 6% on the year.

Russell says shareholders ‘’will be pleased yet again with the dividend result’’ - a fully franked dividend of 13 cents per share, the same as last year.

‘’This solid result continues to reflect the group’s disciplined investment in our diversified businesses,’’ he says.

Other financial highlights:

  • The total Mortgage Choice loan book - loans written by brokers in its franchise network and its aggregation arm, LoanKit - was $47.7 billion. This is up 5.8% from $45.1 billion last year.
  • $11.9 billion worth of housing loan approvals were written - up from $11.2 billion last year.  
  • Core business loan approvals were $10.4 billion - up from $10.1 billion.
  • Annual share of new home loans remained at 4.6%. Mortgage Choice’s core business market share was 4.0% - down 0.2%.
  • Group net profit after tax was $18.7 million, up 1.4% on $18.5 million last year.
  • Earnings per share stood at 15.2 cents compared to 15.4 cents last year.
  • Total group revenue was $156.5 million, down 0.3% on last year.

“We are pleased to report a 5% increase year on year in cash profit after tax, which takes into account our after-tax investment in our exciting new financial planning business,” Russell says.

“These are all excellent results, which were achieved while operating in a period of dampened consumer and business confidence.’’

The group invested in its diversified businesses, aggregator LoanKit, comparison website HelpMeChoose.com.au, and the new Mortgage Choice Financial Planning business.

LoanKit has continued to show a marked improvement year on year with regards to the settlement number, loan book growth and recruitment count, Russell says.

‘’ However, the group has accepted a binding term sheet to sell LoanKit. This will enable management to further focus on its core mortgage broking business, HelpMeChoose.com.au and Mortgage Choice Financial Planning,’’ he says.

HelpMeChoose.com.au had a 61% improvement in net profit after tax on a cash basis in 2013.

“We are excited about the HelpMeChoose.com.au business and its capacity for growth,” Russell says. The financial planning business recruited 11 advisers over the year, against a target of 8 to 10.

“The progress of Mortgage Choice Financial Planning is pleasing. We have a unique proposition for our franchisees, advisers and customers and we are looking forward to a consumer launch in the not too distant future,” Russell says.  

The group will focus on executing its ACT strategy, building a ‘’compelling and differentiated customer experience’’ and providing sustainable earnings for our shareholders.

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