Trading Update and NED Appointment

20 January 2021

Mortgage Advice Bureau (Holdings) plc 

("MAB" or the "Group")

Trading Update and Non-Executive Director Appointment

Mortgage Advice Bureau (Holdings) plc (AIM: MAB1), one of the UK's leading consumer intermediary brands and specialist Appointed Representative networks, today issues a trading update for the year ended 31 December 2020, ahead of publishing its final results on Tuesday, 23 March 2021.

Group revenue for the year is expected to be c.£148m, representing an increase of 3% on 2019, achieved in a period when the first Coronavirus lockdowns closed the housing market in England for almost two months and the markets in Scotland, Wales and Northern Ireland for three months. Excluding First Mortgage Direct Limited ("First Mortgage"), acquired on 2 July 2019, MAB generated revenue of c.£134m which was broadly flat compared to 2019. The total number of Advisers at year end had increased by 8% to 1,580⁽¹⁾ (2019:1,457).

We saw a very sharp recovery in written business in Q3 2020 following the re-opening of the UK housing markets, and that trend continued in Q4 2020. Despite severe lending restrictions in the higher loan to value segment, written mortgage volumes in the second half of the year significantly exceeded last year's levels.

From a banked business perspective, Q3 2020 was impacted by lower written purchase business in Q2 2020. However, Q4 2020 completions were very strong despite delays brought about by surveyors, lenders and conveyancers having experienced a surge in new business levels since the re-opening of the housing market, whilst operating with pandemic-related processing constraints. Revenue was particularly strong in December, exceeding our expectations and driven by mortgage completions 20% higher than in 2019.

As a result of this strong trading performance in H2 2020, the Group's profit before tax for the year ended 31 December 2020 is expected to be materially ahead of current market expectations. 

During the year, the Group maintained a strong balance sheet and a robust cash generation profile. The furlough grants were repaid in full prior to the payment of the interim dividend in December 2020. In March 2020 the Group drew down its £12m Revolving Credit Facility: this was repaid in full in December 2020. As previously announced, the board intends to propose a final dividend in respect of the year ended 31 December 2020, to be paid on 28 May 2021 to shareholders on the register at close of business on 30 April 2021.

Current trading

The Group has started 2021 with a very strong pipeline of both written business and Adviser recruitment. The housing market has remained open despite the new lockdown restrictions that took effect on 5 January and, although we move into 2021 with uncertainty over the economy and the continuing impact of the Covid-19 pandemic, the factors that underpin strong house purchase demand cause us to be optimistic about the outlook. The Intermediary Mortgage Lenders Association's ("IMLA") recent estimate of gross new mortgage lending for 2021 (published in January 2021) is £283bn, representing a 17% increase compared to 2020 (£242bn) and a 6% increase compared to 2019 (£268bn).

We are very confident in our strategy to deliver continued growth and productivity improvements through strong recruitment performance, further developments of our technology platform and our lead generation strategy. Current trading is in line with the Board's expectations.

Non-Executive Director Appointment

MAB is pleased to announce the appointment of Mike Jones⁽²⁾ as an independent Non-Executive Director of the Group, with effect from 1 March 2021. Mike will serve on the Audit, Remuneration, Nomination, and Group Risk Committees.

Mike joined Lloyds Bank plc in 1985 and retired from Lloyds Banking Group plc ("LBG") at the end of 2020. He worked in various roles across LBG, most recently as Managing Director, Intermediaries & Specialist Brands since 2010. His primary role was leading the Halifax, BM Solutions and Scottish Widows Bank business development teams working with mortgage intermediaries across the UK. Mike chaired the LBG Housing Forum, the LBG Intermediary Conduct Forum and was responsible in the UK for Birmingham Midshires, Scottish Widows Bank and Intelligent Finance. He was also responsible for LBG's European retail bank operating in Germany and The Netherlands, a role that sees him continue into 2021 as Chair of the Supervisory Board of Lloyds Bank GmbH following his appointment in March 2019.

Peter Brodnicki, CEO of MAB, said:

"I am very pleased with our 2020 performance which again demonstrates the resilience of our operating model and our ability to grow market share in all conditions. We responded quickly and decisively to the challenges we faced, we delivered a strong performance, our strategic objectives were achieved, and exciting new growth opportunities were identified.

"We therefore enter 2021 in great shape, with a very strong pipeline of business, ARs, Advisers and lead sources, as well as having further strengthened our leading proposition and management team. Despite continued uncertainties brought about by the pandemic, I am extremely confident in our ability to perform strongly and deliver our plans in order to achieve our market share growth ambitions.

"I am also delighted to welcome Mike to the Board. His leadership, vision, and strategic thinking at the UK's leading lender has shaped the intermediary and lending markets that exist today, and his appointment reflects the huge ambition of this business."

(1)   Includes 42 Advisers as part of a firm previously authorised under an Appointed Representative agreement with MAB until 7 December 2020. MAB continues to provide services to this firm, now Directly Authorised by the FCA.

(2)   Subject to Regulatory approval.

Michael John Probert Jones, aged 57, currently holds or has held the following directorships and partnerships in the last five years:

There is no other information that is required to be disclosed pursuant to Schedule 2 paragraph (g) or Rule 17 of the AIM Rules for Companies.

Market Abuse Regulation (MAR) Disclosure

The information contained within this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulations (EU) No 596/2014.  Upon the publication of this announcement, this inside information is now considered to be in the public domain.

Enquiries:

Mortgage Advice Bureau (Holdings) plc                            +44 (0)1332 525007

Peter Brodnicki, Chief Executive Officer

Ben Thompson, Deputy Chief Executive Officer

Lucy Tilley, Chief Financial Officer

Numis Securities Limited                                                                             

Stephen Westgate / Hugo Rubinstein / Laura White