Mortgage Choice lifted by hot property market
One of the country's biggest mortgage brokers, Mortgage Choice, yesterday posted a 16.2 per cent jump in first-half cash profit to $11.5 million on the back of a record settlement result and solid growth in its loan book.
The mortgage broker and financial planning firm said in the six months to December 2016, it recorded its best ever home loan settlement result, reaching $6.4 billion. This figure was up 2.4 per cent on the $6.2 billion achieved in the year ago first half.
Consequently, the broker grew its mortgage book, which reached $52.4 billion - up 3.3 per cent on the $50.7 billion achieved in the previous first half.
Mortgage Choice chief executive, John Flavell, said the continued growth in financial planning revenue, combined with the ongoing strength of the underlying core broking business ultimately helped the company to drive impressive cash earnings.
The good news for Mortgage Choice is that borrowers continue to use mortgage brokers more than they use lenders. Around 50 per cent of all mortgages are signed by brokers which created a tailwind for the company given double-digit property price growth.
However, Flavell pointed out that the core broking business was not the only division to deliver record cash results as the financial planning arm also did well.
“Throughout 1H17, the financial planning division has gone from strength to strength, with this business now consistently profitable on a monthly basis,” he said.
“We have started the 2017 calendar year off strongly, with growth in the network, growth in home loan applications, growth in the number of referrals going to our financial advisers, increased momentum in Mortgage Choice Asset Finance, and a continued focus on investing for the future whilst prudently managing operating expenses."
Funds under advice at Mortgage Choice rose 35.8 per cent to $423.1 million from the $311 million garnered in the previous first half. Income from the division rose 20 per cent over this period, to $930,000 from $780,000.
The financial planning’s division's insurance inforce book surged past the $20 million milestone, reaching $22 million. This is up 27.8 per cent on the half - from $17.2 million.
While the Mortgage Choice chief maintained he was pleased with the group’s performance over the first half of the financial year, he said the he executive team remains focused on continued growth in all areas of the business with a prudent focus on operating expenses.
“We look forward to continuing to deliver strong results and addressing the market again at financial year’s end," he said.
The chief executive expressed confidence in growth for 2017 full year but stopped short of providing specific guidance.
The strong cash earnings were partially driven by the closure of the loss-making Help Me Choose business.
- Mortgage Choice, result
- Elizabeth Fry, email@example.com
- Article Posted:
- February 24, 2017
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