August 19, 2015
Mortgage Choice Limited (MOC) has today announced its annual results for the financial year ended 30 June 2015.
Over the last financial year, the Group managed to capitalise on the industry tailwinds and significantly grow its core business while continuing its transition into a fully-fledged financial services company.
Financial highlights for the 12 months to 30 June 2015
- Mortgage Choice's core broking business achieved record settlement volumes, with settlements totalling $11.5 billion - up 10.6% from FY14;
- Mortgage Choice loan book grew to new heights, hitting $49.5 billion, up 4.6% from FY14;
- $13.4 billion worth of housing loan approvals were written by Mortgage Choice in the year, up from $12.2 billion in FY14;
- NPAT on a cash basis was $18.6 million for FY15, largely in line with FY14's performance;
- A fully franked final dividend of 8 cents per share was declared by the Board, which takes the total dividends for the year to 15.5 cents per share – in line with FY14.
IFRS highlights for the 12 months to 30 June 2015
- Net profit after tax (NPAT) was $18.9 million, up 1.7% on $18.5 million in FY14 (excluding discontinued operations);
- Earnings per share is now sitting at 15.2 cents, up from 15.0 cents in FY14 (excluding discontinued operations).
Mortgage Choice CEO John Flavell said while the company's latest annual financial results were strong, more can be done by the Group to better capitalise on the opportunities presented by the strong market.
“Over the last 12 months, the Mortgage Choice core business has performed incredibly well, recording its best ever settlements result.
“That said, there is still more that we can do to grow the core broking business. Heading into FY16, recruitment will become a focus for the business as the more feet we have on the ground, the better placed we will be to help more Australians make informed financial decisions,” he said.
“In addition, we will continue to focus on transitioning the business into a fully-fledged financial services company in a bid to better cater to our customers' growing financial needs.
“We envisage that Mortgage Choice Financial Planning will break even on a monthly basis from the second half of FY16. As this business continues to strengthen and deliver excellent results, the Group as a whole will benefit.
“Whilst it is clear there are plenty of opportunities for the Mortgage Choice business over the coming years, it is important to note the business still performed incredibly well.
“Our shareholders will once again be very pleased with the dividend result. The ongoing strength of the Mortgage Choice business means we have been able to deliver a total fully franked dividend of 15.5 cents per share.”
Financial and operational performance
Mortgage Choice's core broking business significantly outperformed FY14, with the company's loan book growing 4.6% to reach $49.5 billion. In addition, home loan approvals grew by an impressive 10.5% to $13.4 billion, while settlements rose by 10.6% to $11.5 billion.
Mr Flavell said solid growth in loan writer and franchise numbers ultimately helped the core business to achieve its impressive result.
“Throughout the 2015 financial year, we appointed 41 loan writers taking our total loan writer count to 575. In addition, we sold 23 greenfield franchises and 14 existing franchises to reach a franchise footprint of 422,” he said.
“Looking forward, we have a very positive outlook for FY16. The property market remains strong, with dwelling values on the rise and auction clearance rates continuing to hover at solid levels. Further, the value of the home loan market and the number of home loan approvals being written each month continues to rise, which bodes well for Mortgage Choice's core broking business.
“The future also looks bright for the business as a whole. Throughout FY15, we have continued to deliver a broader range of financial solutions to our customers, and have taken our total number of financial advisers to 45 and Mortgage Choice Financial Planning franchises to 34. We have also seen continuous strong growth in our Funds Under Advice and In Force premiums.
“It is clear that there are significant opportunities for us in the financial planning space and we have only just begun to scratch the surface. In FY16 we will continue to focus on growing the number of referrals to Mortgage Choice Financial Planning from our existing network.”
In addition to strengthening the Group's financial planning business, Mr Flavell said Mortgage Choice would also look to work on its other diversified business, www.helpmechoose.com.au (HMC).
“HMC failed to perform in-line with expectations throughout FY15, with the business recording a less than impressive financial result,” he said.
According to Mr Flavell, the company made a significant investment in headcount in the second half of FY15 in order to capitalise on seasonal uplifts, but unfortunately the uplift was less than expected.
“In hindsight, the headcount was recruited too early and the improved results in May and June was insufficient to increase the revenue in proportion to the increase in costs,” he said.
“As a result, HMC's financial result wasn't as strong as we would have liked and this is something we will look to address as a matter of urgency.”
Moving forward, Mr Flavell said he is confident about the future direction of Mortgage Choice and believes FY16 will be a strong year for the business.
“At Mortgage Choice, we know what success in FY16 looks like and we have established a raft of short term priorities to help us achieve just that.
“Over the course of FY16, Mortgage Choice will increase our home loan lead volumes, as well as the number of customers referred to a Mortgage Choice financial adviser. In addition, we will help our brokers to be more productive through the implementation of a new client relationship management platform,” he said.
“Diversification and productivity are central to the long term success and direction of Mortgage Choice. Our aim is to build a business that can deliver any financial product through any channel at any time in our customers' financial lifecycle.”
By continuing to diversify and evolve the business, Mr Flavell said Mortgage Choice will not only build a compelling and differentiated customer experience, but provide sustainable earnings for its shareholders.
“We are in a very exciting stage of the business. At present, we are well down the road to successfully transitioning the business into a diversified financial services company and we will continue to focus on our growth and diversification moving forward – adding value to our customers, franchisees, and our shareholders.”