On-target result on the eve of expected market uplift

Mortgage Choice Limited (MOC) today announced a solid, on-target financial result for the six months ended 31 December 2012.


February 21, 2013

Mortgage Choice Limited (MOC) today announced a solid, on-target financial result for the six months ended 31 December 2012.

The result once more demonstrates the Group's resilience in a subdued housing credit market.

Financial highlights for the six months to 31 December 2012

  • On an IFRS basis:

          -          Group net profit after tax (NPAT) was $7.5 million, up 17% on $6.4 million in 1H12.

          -          Earnings per share stood at 6.2 cents compared to 5.4 cents in 1H12.

          -          Total group revenue was $74.2 million, up 3.3% on 1H12.

  • NPAT on a cash basis was $7.8 million, an increase of 20% on 1H12.
  • Total loan book, ie. loans written by mortgage brokers in its franchise network and its aggregation arm, LoanKit, reached $46.3 billion. This was up 6.4% from $43.5 billion at 31 December 2011.
  • $5.82 billion worth of housing loan approvals were written by the Group in the half year, up from $5.57 billion in 1H12. Mortgage Choice's core business loan approvals were $5.09 billion, down slightly from $5.11 billion in 1H12.
  • Annual share of new home loans stood at 4.5%, on par with 1H12 and slightly down from 4.7% in 2H12. Mortgage Choice core business market share was 4.0%, down by 0.1% on 1H12.
  • A fully franked interim dividend of 6 cents per share was declared by the Board, consistent with 1H12.
  • Total group revenue on a cash basis was $75.0 million, up 4.6% on 2H12 and 3.9% on 1H12. The business' cash gross profit rose to $28.4m, a rise of 5.6% on 2H12 and 4.7% on 1H12.

Mortgage Choice CEO Michael Russell said, “Delivering solid, on-target results in the first half of this financial year, the Mortgage Choice Group has performed as expected. We continue to stay focused on executing our ACT strategy, building a compelling customer proposition and providing sustainable earnings for our shareholders.”

“Shareholders will be pleased once more with the dividend result, equal to that received in the first half last year – an interim fully franked dividend of 6 cents per share.”

Mortgage Choice reaffirms its August 2012 guidance: cash NPAT for FY13 is expected to be in-line with FY12 and the full year dividend maintained at 13 cents.

“We expect an increase in marketing spend in the second half of this financial year due to the launch of our new consumer campaign,” Mr Russell said.

Financial and operational performance

Company revenue showed improvements on 1H12 with the group loan book growing 6.4% to reach $46.3 billion, home loan approvals increasing by 4.5% to $5.82 billion, settlements rising by 7.4% to $5.09 billion and group market share steady at 4.5% for all new home loans written.

Mortgage Choice expanded its network of mortgage brokers by 3.8% to reach a franchise footprint of 386, the highest count since January 2009.  

Mr Russell said, “We are pleased to report a 20% increase in cash profit when compared to the prior corresponding period. This result follows an extended period of dampened consumer and business confidence. However, with green shoots emerging in the property and housing finance markets, an uplift in conditions now looks very likely. This should go a long way in improving consumer and business confidence throughout the remainder of this financial year.”

The Group continued to invest in its diversified businesses, comparison website HelpMeChoose.com.au, aggregator LoanKit, and the new Mortgage Choice Financial Planning business.

“HelpMeChoose.com.au offers an exciting and innovative consumer proposition, but the cost of customer acquisition continues to challenge,” said Mr Russell.  

“LoanKit is growing its broker numbers, monthly settlements and loan book.

“We have successfully executed the business build process and soft-launch for Mortgage Choice Financial Planning. Today, the business is operational with four franchises on board and a strong recruitment pipeline. We stand ready for our consumer campaign launch early in the new financial year.”

Marketing in FY13 and beyond

With a focus on acquiring greater market share, Mortgage Choice has embarked on a significant brand refresh.

Mr Russell said, “In December we announced to the market our brand new consumer website, which simplifies the user journey and increases visitors' engagement with the brand. This transition included increased functionality for our franchisees local web pages. Feedback from our network has been overwhelming and we are excited to be moving on to the next phase of our brand refresh.”

“This financial year we will be launching an exciting new consumer campaign, which is sure to be unique in the industry. Stay tuned for the launch in coming weeks!”

Visit www.mortgagechoice.com.au or call 13 77 62.

 

For further information or to arrange an interview, please contact:

Belinda Williamson                                                                    
Mortgage Choice Corporate Affairs                            
02 8907 0472 / 0407 416 124                                 
belinda.williamson@mortgagechoice.com.au              

Michelle Ryan
BlueChip Communication
02 9018 8608 / 0404 381 886
michelle@bluechipcommunication.com.au


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