Mortgage Choice post strong interim results, highlighting an improvement in what is a resurgent housing market
Mortgage Choice’s financial results for the six months ending 31 December 2019 have a number of financial highlights that will excite broking firm as they look to capitalise on a resurgent housing market.
The figures signal that the mortgage industry remains robust in spite of tightened lending environment, with the national dwelling index having recovered by 6.7%.
Mortgage Choice chief executive officer Susan Mitchell said the period saw improving market conditions and early benefits from the company’s investments for growth.
“The interim results reflect a turnaround in the nation’s housing market and are in line with expectations,” she said.
“We have seen a steady increase in the volume of applications and approvals and despite settlements being down slightly on the previous corresponding period, they were up 22% on the six months to 30 June 2019.”
Mitchell said following the investment made in their broker remuneration model and technology platforms in FY19, they are starting to see regeneration of their broker network with an improved rate of growth in new brokers joining the network.
“We have also seen an improvement in productivity as a part of this activity, enabling our network to operate more efficiently and dedicate more time to customer interaction,” she said.
“The industry has experienced significant regulatory change and uncertainty in recent times related to declining credit growth and uncertain economic conditions.
“This was exacerbated by a prolonged drought and, more recently, a devastating bushfire season.
“However, the turnaround in the housing market in the second half of 2019 has continued into 2020 and I believe we are well-positioned to take advantage of this new environment as we focus on building a long-term, sustainable business.”
Mortgage Choice is adamant in not resting on their laurels and has vowed to ensure take advantage of their recent momentum and improve on their results.
“We are confident we can continue to regenerate the broker network and build scale in our financial planning business,” Mitchell said.
“We will be implementing a new brand strategy to strengthen customer appeal, backed by further enhancements to the customer experience.
“We have recently re-launched a white label offering on our lending panel providing a branded solution for our network to offer our customers.
“These activities are all part of our ongoing journey towards building a resilient and sustainable business that generates consistent growth and returns for shareholders over time.”
Financial highlights for the period include:
- NPAT on an IFRS basis of $4.0m
- NPAT on a cash basis of $5.5m; NPAT on a cash adjusted basis of $6.1m
- $5.0 billion settled home loans, up 22% on 2H19
- Total loan book of $54.3 billion, holding steady on 2H19
- Financial planning Funds Under Advice up 30% from 1H19 to $1.1 billion
- Financial planning insurance Premiums In Force of $31.2 million, up 8% from 1H19
- Cash earnings per share of 4.4 cents
- Interim fully franked dividend of 3 cents per share
