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Media Release 25 February 2015
MOC records solid interim financial result Mortgage Choice grows settlements, loan book
Mortgage Choice Limited (MOC) has today announced its financial results for the six months ending 31
December 2014.
Today’s results are on par with last year, highlighting the company’s ongoing strength and ability to
continue to deliver strong profit results while investing in network growth and its diversified businesses.
Financial highlights for the six months to 31 December 2014*
On an IFRS basis:
Group net profit after tax (NPAT) was $10.0 million, up 3.3% on $9.7 million in 1H14.
Earnings per share at 8.0 cents for continuing business compared to 7.9 cents in 1H14.
Total group revenue was $97.0 million, up 11.0% on 1H14.
NPAT on a cash basis was $9.0 million and equal to the result achieved in 1H14.
Total loan book reached $48.4 billion. This was up 4.5% from $46.4 billion at 31 December 2013 and is poised to hit $50 billion by 1H16.
$6.9 billion worth of housing loan approvals were written in the six months to 31 December 2014, up from $6.2 billion in 1H14.
Annual share of new home loans remained at 3.9%, on par with 1H14.
A fully franked interim dividend of 7.5 cents per share was declared by the Board, on par with 1H14.
Mortgage Choice CEO Michael Russell said the results were incredibly pleasing and they highlighted the
ongoing strength of the business as it continues down the path of diversification.
“To achieve an interim profit result that is on par with last year is very pleasing, given that last year was
our strongest interim profit result on record,” he said.
“Over the last six months, we have significantly ramped up our investment in our personnel and
technology across diversified businesses HelpMeChoose.com.au and Mortgage Choice Financial Planning.
Thanks to this increased investment, HelpMeChoose.com.au is now well placed to take advantage of
seasonal uplifts in 2H15 and Mortgage Choice Financial Planning is now ready and geared for further
growth, with 40 financial advisers currently on board.
“Moving forward, we will continue to focus on quality recruitment and expect to have 50 advisers fully
operational by financial year’s end.
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“In addition to the increased investment in our diversified businesses, we have also increased the
commission share to our franchisees, allowing them to earn more commission than ever before. To be able
to reward our franchisees in this way and still manage a healthy $9 million NPAT on a cash basis is
immensely satisfying.”
Mr Russell said the ongoing strength of the company could be attributed to the productivity of the
company’s broker network.
“Over the last 12 months we have invested in recruitment incentive programs, enabling us to add 50 new
loan writers to our network. Despite the fact that we now have a number of new operators working within
the business, our network of brokers continue to achieve strong productivity levels, which has resulted in
approvals soaring 11.4 per cent and settlements growing by 9.0 per cent in comparison to 1H14. And with
low interest rates keeping heat in the property market, we expect our broker network to become even
busier in the months ahead.
“Looking forward, our outlook for housing loan approvals for the remainder of FY15 and into FY16 remains
positive.”
If you want to learn more about your home loan options, call 13 6678. Or, visit
www.mortgagechoice.com.au, Facebook.com/MortgageChoice or Twitter.com/MortgageChoice.
*Prior year comparatives exclude discontinued operations For further information, photos of the new logo, or to arrange an interview, please contact: Lauren Booke Amity Harrold Mortgage Choice Corporate Affairs PPR (02) 8907 0502 / 0448 240 047 (02) 9818 9334 Lauren.booke@mortgagechoice.com.au amity.harrold@ppr.com.au
Important information
This article is for general information purposes only. It has been prepared without considering your objectives,
financial situation or needs. You should, before acting on the advice, consider its appropriateness to your
circumstances.
About Mortgage Choice
Mortgage Choice is an ASX listed company that seeks to help Australians with all of their financial needs.
Established in 1992, Mortgage Choice was originally established to help Australians improve their financial
situation by offering a choice of home loan providers, coupled with the expert advice of a mortgage professional.
Since that time, the company has grown and developed into a fully fledged financial services provider.
Today, Mortgage Choice helps customers source car loans, personal loans, credit cards, commercial loans, asset
finance, deposit bonds, and risk and general insurance.
Further, the company offers Australians access to real, relevant and affordable financial advice through our
qualified financial advisers.
Mortgage Choice has no balance sheet or funding risk, and consistently delivers strong profits and attractive yields.
It listed on the ASX in 2004 (MOC) and is a member of the Mortgage & Finance Association of Australia (MFAA).
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Mortgage Choice holds an Australian Credit Licence: no. 382869 and Mortgage Choice Financial Planning Pty
Limited holds an Australian Financial Services Licence: no. 422854. Both licences are issued by ASIC.
Recent recognition: 2014 Australian Broking Awards Best Diversification Program; 2013, 2012, 2011 Australian
Broking Awards Major Brokerage of the Year – Franchise; 2013, 2012 Australian Broking Awards Best Ethical/Social
Responsibility Program; 2012 Australian Broking Awards Best Training and Education; No.1 on The Adviser
magazine’s 2012, 2011, 2010 and 2009 Top 25 Brokerages list; 2012, 2010, 2009, 2008, 2006 and 2005 MFAA
Awards Retail Aggregator/Originator of the Year; 2011, 2010, 2009 and 2008 10 Thousand FEET Top 10 Franchise
list; 2010 Forbes Asia‐Pacific Best Under A Billion list.
Visit www.mortgagechoice.com.au or call customer service on 13 6678.
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Half Year ending Dec 2014
Half Yearly Results Presentation
Presented by Michael Russell (CEO) and Susan Mitchell (CFO)
25th February 2015
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Contents
1. Performance highlights 2. Economy and industry 3. Operations and strategy 4. Appendices
2
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PERFORMANCE HIGHLIGHTS
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1H15 performance highlights
*excludes discontinued operations in 1H14 ^includes residential, commercial loans and reverse mortgages
4
1H15 1H14 1H15 vs 1H14
NPAT – cash* – continuing operations 9.0 m 9.0 m 0.0%
– IFRS* – continuing operations 10.0 m 9.7 m 3.3%
Loan book*^ 48.4 b 46.4 b 4.5%
Approvals* 6.9 b 6.2 b 11.4%
Settlements* 5.7 b 5.3 b 9.0%
Market Share (approvals)* 3.9 % 3.9 % 0.0%
Basic EPS – cash (Cps)* 7.2 c 7.3 c 1.4%
– IFRS (Cps)* 8.0 c 7.9 c 1.3%
DPS – ordinary (Cps) 7.5 c 7.5 c 0.0%
NPAT – cash (includes discontinued ops in 1H14) 9.0 m 10.3 m 13.0%
– IFRS (includes discontinued ops in 1H14) 10.0 m 11.0 m 9.4%
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MC settlements and loan book
• Highest 6 monthly settlements in Mortgage Choice’s history
• Loan book continues to grow at steady rate despite low rate environment encouraging borrowers to pay off mortgage sooner
5
500
600
700
800
900
1,000
1,100
1,200
Jul-
12
Au
g-1
2
Sep
-12
Oct
-12
No
v-1
2
Dec
-12
Jan
-13
Feb
-13
Mar
-13
Ap
r-1
3
May
-13
Jun
-13
Jul-
13
Au
g-1
3
Sep
-13
Oct
-13
No
v-1
3
Dec
-13
Jan
-14
Feb
-14
Mar
-14
Ap
r-1
4
May
-14
Jun
-14
Jul-
14
Au
g-1
4
Sep
-14
Oct
-14
No
v-1
4
Dec
-14
$m Settlements trend 3.5% 3.5% 3.5% 3.5% 3.5% 3.5% 3.5% 3.4% 3.4%
-40.0%
-35.0%
-30.0%
-25.0%
-20.0%
-15.0%
-10.0%
-5.0%
0.0%
0
5
10
15
20
25
30
35
40
45
50
1H11 2H11 1H12 2H12 1H13 2H13 1H14 2H14 1H15
$b Residential loan book market share
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Highlights Summary
6
• NPAT Cash profit consistent with 1H14
• Loan book growth approaching $50b
• Settlements trend remains strong
• Dividend maintained at 7.5c
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FINANCIAL PERFORMANCE
7
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Profit and loss statement
^Cash is based on accruals accounting and excludes share based remuneration and the net present value of future trailing commissions receivable and payable. This is an extract from our audited accounts
8
$m 1H15 Cash^
1H14 Cash^
% change
1H15 IFRS
1H14 IFRS
% change
Origination commission received 35.0 31.7 10% 35.0 31.7 10% Trailing commission received 44.3 43.9 1% 50.9 48.0 6%
79.3 75.7 5% 85.9 79.7 8%
Origination commission paid 25.8 23.1 12% 25.8 23.1 12% Trailing commission paid 26.7 25.9 3% 30.9 28.1 10%
52.5 49.0 7% 56.8 51.2 11%
Net core commission 26.8 26.7 0% 29.1 28.5 2%
Diversified products net revenue 0.8 0.6 29% 0.8 0.6 29% HMC and Financial Planning net revenue 2.0 1.2 64% 2.2 1.3 70% LoanKit Revenue - 0.3 (100%) - 0.3 (100%) Other income 2.6 2.2 22% 2.6 2.2 22%
Gross profit 32.2 31.0 4% 34.7 32.8 6%
Operating expenses 19.6 18.2 7% 19.6 18.2 7% Share based remuneration - - - 0.7 0.6 23%
Net profit before tax 12.6 12.8 (1%) 14.4 14.0 3%
Net profit after tax 9.0 9.0 0% 10.0 9.7 3%
After tax gain on sale of LoanKit - 1.3 (100%) - 1.3 (100%)
NPAT including gain on sale of LoanKit 9.0 10.3 (13%) 10.0 11.0 (9%)
EPS (cps) (continuing operations) 7.2 7.3* (1%) 8.0 7.9* 1% DPS (cps) 7.5 7.5 0% 7.5 7.5 0%
*1H14 contains profit from discontinued operations which is excluded from the comparative EPS
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Payout
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• Loan writer recruitment incentives pushed payout ratio up on origination payments; incentive to finish at the end of FY15
• Increased settlements triggered payment model to share more trail with franchisees, encouraging further business investment on their part
1H15 1H14 % Change Origination commission received 34,980 31,722
Origination commission paid 25,530 23,052
Net origination income 9,450 8,671
Origination Payout 73.0% 72.7% 0.3%
Loan writer recruitment incentive paid 298 33
Net origination income 9,152 8,638
Origination Payout 73.8% 72.8% 1.1%
Trailing commission received 44,273 43,942 Trailing commission paid 26,654 25,893
Net trail income 17,619 18,049
Trail Payout (inc MOC book) 60.2% 58.9% 1.3%
Trail Payout (exc MOC book) 62.4% 60.7% 1.7%
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Continue to invest in diversification and growth in broker numbers
• Increase in personnel expense for HMC and FP. FP’s additional support staff positions business for further growth; HMC positioned to take advantage of seasonal uplifts in 2H15
• Loan writer incentives estimated to be $250k in second half and finish by 30th June 2015
• Operating expenses in total expected to be lower by 8 to 10% as national and high flyer conferences are held in the first half of the financial year
$000
12,764
298
1,197 96 158
373
993
843
138 12,616
1H14 Cash NPBT MC Gross Profit (excl LoanWriter
Recruitment Incentives)
MC LoanWriter Recruitment Incentive
HMC & FP Gross Profit HMC & FP Personnel Expenses
HMC & FP Other Expenses
MC Marketing Expense MC Other Expense LoanKit 1H15 Cash NPBT
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Gross revenue mix
• Percentage of gross revenue from diversified sources now accounts for 11.5% of total revenue despite the strong growth in broking commission from increased settlements. These results reflect our success in growing the core business but still diversifying
• Over the past five years the percentage of gross revenue from diversification has increased from 1.4% for FY09 to 11.5% for 1H15
11
88.5%
3.5%
2.6% 2.7% 2.7%
Gross Revenue (1H15)
MC Broking
Diversified Products
HMC
Financial Planning
Others 91.1%
3.2%
2.0% 1.2% 2.5%
Gross Revenue (1H14)
MC Broking
Diversified Products
HMC
Financial Planning
Others
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Divisional results
• Growth of 2% in cash profits from core broking business – benefits from increased settlements have been reined in due to increase in payout ratio
• HMC cash gross profit up by 48% on PCP. Cash NPAT reflects investment in scale to capitalise on the upcoming seasonal uplift, which should push HMC into profit
• Financial Planning build complete, gross profit to grow in second half and FY16. Breakeven on a monthly basis pushed out to FY16 as adviser recruitment driven by quality
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$000 1H15 2H14 1H14 MC HMC FP LK
(Discontinued) MC HMC FP LK
(Discontinued) MC HMC FP LK
(Discontinued)
Settlements 5.7b 5.1b 5.3b 0.5b
Gross profit (IFRS) 32,417 1,725 553 0 27,549 2,261 423 0 31,191 1,108 213 329
Gross profit (Cash) 30,095 1,559 553 0 27,864 2,264 423 0 29,398 1,055 213 329
EBITDA (Cash) 14,106 (690) (463) 0 13,996 641 (519) 0 14,244 (232) (497) (109)
NPAT (IFRS) 10,753 (422) (359) 0 8,815 391 (408) 0 10,291 (177) (365) (92)
NPAT (Cash) 9,836 (522) (342) 0 9,722 406 (390) 0 9,620 (203) (349) (98)
YOY Growth (%) 2% -157% 2% 100%
* Figures before gain on sale of LoanKit
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Average commission rates
* Settlements from 1 Jan09 - projection based on our best estimates for lender mix, run off and settlements growth
• Average upfront rate for 1H15 of 0.647%, up from 0.633% in FY14
• Upfront rate rise due to special offers but expected to return to 0.635% towards end of financial year
• Stabilised trail rate for new settlements has increased from 0.175% to 0.178% due to recent commission changes
13
0.450%
0.500%
0.550%
0.600%
0.650%
0.700%
Jan
13
Feb
13
Mar
13
Ap
r13
May
13
Jun
13
Jul1
3
Au
g13
Sep
13
Oct
13
No
v13
Dec
13
Jan
14
Feb
14
Mar
14
Ap
r14
May
14
Jun
14
Jul1
4
Au
g14
Sep
14
Oct
14
No
v14
Dec
14
Average upfront rate
0.100%
0.125%
0.150%
0.175%
0.200%
1H
14
2H
14
1H
15
2H
15
1H
16
2H
16
1H
17
2H
17
1H
18
2H
18
1H
19
2H
19
1H
20
2H
20
Average trail rate
Average rate total book (Actual)
Average rate total book (Estimated)
Average rate new settlements* (Estimated)
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Lender commissions
14
• Special short term offers available on remainder of panel
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Operating cash flow
15
• Increase in dividend and IT expenditure met without the need to borrow
$000 1H15 1H14
Net profit before tax (cash basis) 12,616 12,764
Depreciation and amortisation 605 990
13,221 13,754
Tax paid (4,070) (3,901)
Purchase of fixed assets and intangibles (3,538) (725)
Net Proceeds from sale of Loankit - 1,595
Other balance sheet movements (1,884) (2,108)
Cash flow before dividends 3,729 8,615
Dividends paid (9,910) (8,640)
Net cash movement (6,181) (25)
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ECONOMY AND INDUSTRY
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Australia’s housing finance commitments
• Housing finance commitments are at an all time high, providing Mortgage Choice with a wonderful growth opportunity
• The level of investment activity remains high by historical standards
• First Home Buyer activity remains low by historical standards
However, our data indicates up to 21% of FHBs are choosing to purchase an investment property as their first property purchase
Source: ABS 5609 Table 11 – Housing Finance, Australia, Dec14 (Seasonally adjusted series)
17
15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32
$b
Housing finance trend (Owner occupied + Investment)
FY12 FY13 FY14 1H15
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Housing market in an upward cycle and broker usage at 50%
Source: MFAA’s quarterly survey of leading mortgage brokers and aggregator – Dec14 report
Source: CBA Half Year Results presentation – Dec14
% 2014 2015(f) 2016 (f) 2017 (f)
Credit growth Total Housing Business Other personal
5.1 6.4 3.5 0.7
5-7 6-7 4-6 2-4
4.5-6.5 5.5-7.5
3-5 2.5-4.5
4-6 5-7 3-5 2-4
Cash rate 2.5 2 2 2
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50.0% 50.0% 51.5% 50.4%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
55%
Mar FY14 Jun FY14 Sep FY15 Dec FY15
Broker Usage
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Headwinds and tailwinds
Headwinds Consumer confidence volatile
Has housing affordability reached its limit?
Unemployment on the rise
Tailwinds Interest rates at historical
lows and lenders competing hard for new mortgage customers
Broker usage at 50%
Property prices, auction clearance rates and housing finance commitments remain strong
19
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Mortgage Choice settlements by lender
• Four pillars continue to dominate
• Credit unions have seen an increase in market share as they continue to compete aggressively on pricing and product innovation
• Four pillars including St. George and Bankwest = 67% in 1H15 vs 68% in 2H14
Half Yearly Figures from 1H12 to 1H15 Four Pillars includes CBA, ANZ, NAB (Homeside) and Westpac (excludes St. George and Bankwest)
20
51%
37%
3%
7%
3%
54%
30%
3%
10%
3%
0%
10%
20%
30%
40%
50%
60%
70%
Four Pillars Other Banks Building Societies Credit Unions Others
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OPERATIONS AND STRATEGY
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Strong network growth and productivity
• Franchise numbers are up from 405 to 412
• Plus One initiative pushed loan writer count to 557
• Productivity maintained throughout this period of exciting network growth
22
321 330 329 338 337 345 340 346 350
354 368 372 380 386 395 394 405 412
0
50
100
150
200
250
300
350
400
450
500
Dec-10 Jun-11 Dec-11 Jun-12 Dec-12 Jun-13 Dec-13 Jun-14 Dec-14
Network
Franchise owners Franchises
515 523
490 498
504 504 507
534
557
30 28 31 32 31 31
37 35 35
470
480
490
500
510
520
530
540
550
560
570
Dec-10 Jun-11 Dec-11 Jun-12 Dec-12 Jun-13 Dec-13 Jun-14 Dec-14
Productivity settlements
Brokers HY Settlements # per broker
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Franchise recruitment strong and steady
• Consistent interim result of 8 greenfields and 4 sales of existing franchises
• Full year greenfield recruitment expected to reach 25 as approved pipeline high, demonstrating the strong commercial viability of our franchise system
23
405 405
413 412 412
8
1 2
Opening Balance
Recruitment Re-activated Terminated Closing
Franchise Movement
8 11 9 8
15
6 8 13
4
6
13
8 12
5
14 5
11
8
1H11 2H11 1H12 2H12 1H13 2H13 1H14 2H14 1H15
Sale of greenfields and existing franchises
Greenfields Sales of existing to new
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Mortgage Choice broking network snapshot – state performance
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NSW / ACT 35%
VIC / TAS 21%
QLD 26%
SA / NT 8%
WA 10%
States contribution to settlements
Settlements ($m) 1H15 % 1H14 % Growth
NSW / ACT 2,017 35% 1,869 36% 8%
VIC / TAS 1,226 21% 1,116 21% 10%
QLD 1,508 26% 1,300 25% 16%
SA / NT 428 8% 438 8% (2%)
WA 557 10% 537 10% 4%
5,736 100% 5,260 100% 9%
16%
10% 8%
4%
(2%) -5.0%
0.0%
5.0%
10.0%
15.0%
20.0%
QLD VIC / TAS NSW / ACT WA SA / NT
Settlements growth 1H15 / 1H14
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MCFP adviser numbers are growing
25
• We continue to search for quality advisers with target adjusted to 50 at 30 June 2015 with continued recruitment expected in FY16
39
0
5
10
15
20
25
30
35
40
45 Ju
l-1
2
Au
g-1
2
Sep
-12
Oct
-12
No
v-1
2
Dec
-12
Jan
-13
Feb
-13
Mar
-13
Ap
r-1
3
May
-13
Jun
-13
Jul-
13
Au
g-1
3
Sep
-13
Oct
-13
No
v-1
3
Dec
-13
Jan
-14
Feb
-14
Mar
-14
Ap
r-1
4
May
-14
Jun
-14
Jul-
14
Au
g-1
4
Sep
-14
Oct
-14
No
v-1
4
Dec
-14
Advisers
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FUA and in force premiums are climbing
26
*Includes insurance written by broking network
2
4
6
8
10
12
50
100
150
200
250
300
Jan-14 Feb-14 Mar-14 Apr-14 May-14 Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14
In-force Premium ($m) FUA ($m) Funds Under Advice and In force Premium
Inforce Premium Fund Under Advice For
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An external review gives MCFP a tick of approval Now that MCFP has completed it’s start up phase, it seemed prudent to commission an external review of our compliance obligations as an AFS Licence holder. Not only that, we are aiming for best practice in everything we do in this space - from compliance, to adviser support, to the customer experience. So in January 2015, we commissioned specialist legal firm The Fold Compliance Pty Limited to complete an external view. The results were very pleasing and are best summarised by the quotes below from the final report.
Your business model, processes and structure are a standout example of a financial planning business model that has successfully adopted the Future of Financial Advice (FOFA) approach to financial services compliance. Your compliance arrangements are robust, pragmatic and well managed. We applaud you on the support services and tools you have available to your advisers. This is often an area where many licensees fail leading to poor and inappropriate advice. It is clear…that much investment has gone into ensuring that your advisers have the systems in place to deliver appropriate advice that is in the best interests of the client. For
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Update on Project One
28
• Project One will implement an enterprise wide, trusted off-the-shelf CRM platform with an industry leading broker front end. They will combine to provide our franchisees with a web based platform rich in functionality to improve productivity and customer experience
• Phase 1 to implement new CRM will be rolled out company wide by 30th June 2015
• Phase 2 to deliver broker front end will be rolled out in 1H16 as planned
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Summary
• Increased broker numbers in place to capture more of the buoyant property market
• Increasing settlements trend
• Loan book poised to hit $50b
• FP model implemented and continued focus on quality recruitment
• HMC investment to put additional scale in place for 2H15 seasonal push
• Cash profit steady with 1H14 despite increased HMC and FP investment
• Interim dividend maintained at 7.5c
29
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QUESTIONS
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APPENDICES
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Half-Yearly Statistics – P/L
32
$m 1H10 2H10 1H11 2H11 1H12 2H12 1H13 2H13 1H14 2H14 1H15 Origination inc 27.99 24.16 25.51 23.59 25.98 25.08 26.03 25.94 31.72 31.29 34.98 Origination exp (20.25) (16.99) (18.14) (16.62) (18.43) (17.95) (18.78) (18.59) (23.08) (22.69) (25.83)
Cash Trail inc 41.48 41.45 42.30 41.48 42.13 42.32 43.40 43.28 43.94 43.47 44.27 Cash Trail exp (25.78) (25.55) (25.39) (25.15) (24.99) (25.08) (25.69) (25.60) (25.89) (26.30) (26.65)
Net Upfront 7.74 7.17 7.37 6.97 7.55 7.13 7.25 7.35 8.64 8.60 9.15 Net Trail 15.70 15.90 16.91 16.33 17.13 17.24 17.71 17.68 18.05 17.17 17.62
23.44 23.08 24.28 23.30 24.68 24.38 24.96 25.02 26.69 25.77 26.77
Other Income 0.89 1.51 1.36 1.95 2.45 2.50 3.45 3.64 4.31 4.79 5.43
Cash PAT 7.79 7.04 8.84 7.08 6.50 8.52 7.82 7.95 8.97 9.74 8.97 IFRS PAT 9.76 13.72 8.79 18.67 6.44 12.02 7.51 11.20 9.66 8.80 9.97
After tax gain on Loankit sale - - - - - - - - 1.34 - -
Cash PAT inclu. Gain on sale 7.79 7.04 8.84 7.08 6.50 8.52 7.82 7.95 10.31 9.74 8.97 IFRS PAT inclu. Gain on sale 9.76 13.72 8.79 18.67 6.44 12.02 7.51 11.20 11.00 8.80 9.97
Cash e.p.s. 6.5 c 5.9 c 7.3 c 6.0 c 5.4 c 7.1 c 6.4 c 6.5 c 8.3 c 7.9 c 7.2 c IFRS e.p.s. 8.2 c 11.5 c 7.3 c 15.6 c 5.4 c 10 c 6.2 c 9 c 8.9 c 7.1 c 8.0 c Div p.s. 5.5 c 6.5 c 6.0 c 7.0 c 6.0 c 7.0 c 6.0 c 7.0 c 7.5 c 8.0 c 7.5 c
Upfront Payout 72.3% 70.3% 71.1% 70.4% 70.9% 71.6% 72.2% 71.7% 72.8% 72.5% 73.8% Trail Payout 62.2% 61.6% 60.0% 60.6% 59.3% 59.3% 59.2% 59.2% 58.9% 60.5% 60.2% Total Payout 66.3% 64.8% 64.2% 64.2% 63.8% 63.8% 64.1% 63.8% 64.7% 65.5% 66.2%
Volumes MC
Settlements # (`000) 18.73 15.36 15.91 14.56 15.58 15.86 15.77 15.68 18.66 17.86 19.24
Settlements $b 4.82 4.07 4.33 3.99 4.34 4.39 4.43 4.35 5.26 5.11 5.74
Approvals $b 5.39 4.59 4.98 4.55 5.11 5.04 5.09 5.28 6.19 6.04 6.90
Market $b 142.8 124.1 126.4 116.3 124.1 119.8 128.0 133.1 157.1 157.7 177.2
Market Share 3.8% 3.7% 3.9% 3.9% 4.1% 4.2% 4.0% 4.0% 3.9% 3.8% 3.9%
Avg Residential Loan Book $b 36.97 38.40 39.73 40.68 41.68 42.76 43.80 44.55 45.56 46.48 47.65
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Balance Sheet
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Dec 2014 Jun 2014 $’000 $’000
ASSETS Current assets Cash and cash equivalents 6,264 12,445 Trade and other receivables 97,936 98,876 Total current assets 104,200 111,321
Non-current assets Receivables 242,976 238,244 Property, plant and equipment 905 907 Intangible assets 5,249 2,349 Total non-current assets 249,130 241,500
Total assets 353,330 352,821
LIABILITIES Current liabilities Trade and other payables 64,112 66,702 Current tax liabilities 865 2,418 Provisions 1,143 1,103 Total current liabilities 66,120 70,223
Non-current liabilities Trade and other payables 146,090 142,900 Deferred tax liabilities 38,082 36,605 Provisions 826 762 Total non-current liabilities 184,998 180,267
Total liabilities 251,118 250,490
Net assets 102,212 102,331
EQUITY Contributed equity 5,758 4,604 Reserves 1,799 2,210 Retained profits 94,655 95,517
Total equity 102,212 102,331
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Cash Flow statement
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1H15 1H14
$’000 $’000
Cash flows from operating activities
Receipts from customers (inclusive of goods and services tax) 99,332 90,352
Payments to suppliers and employees (inclusive of goods and services tax) (88,263) (78,964)
services tax) 11,069 11,388
Income taxes paid (4,070) (3,901)
Net cash inflow from operating activities 6,999 7,487
Cash flows from investing activities
Payments for property, plant, equipment and intangibles (3,538) (725)
Proceeds from sale of LoanKit net of selling costs - 1,595
Interest received 268 258
Net cash (outflow) from investing activities (3,270) 1,128
Cash flows from financing activities
Dividends paid to company’s shareholders (9,910) (8,640)
Net cash (outflow) from financing activities (9,910) (8,640)
Net decrease in cash and cash equivalents held (6,181) (25)
Cash and cash equivalents at the beginning of the half-year 12,445 10,953
Cash and cash equivalents at the end of the half-year 6,264 10,928
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Mortgage Choice broking network snapshot
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National NSW&ACT VIC&TAS QLD SA&NT WA
Dec-14 Dec-13 Dec-14 Dec-13 Dec-14 Dec-13 Dec-14 Dec-13 Dec-14 Dec-13 Dec-14 Dec-13
Loan book* $48.0bn $46.0bn 35.2% 36.0% 20.0% 19.8% 25.8% 25.2% 9.0% 9.0% 10.0% 10.0%
Loan writer 557 507 197 177 127 119 132 116 41 39 60 56
Franchise 412 394 153 145 88 83 89 87 30 28 52 51
*Residential only
18%
43%
39%
Franchise owner experience
<2 years
2-10 years
>10 years
16%
28% 56%
Franchise owner share of settlements
Rank 1-10
Rank 11-50
Rank 51-342 For
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Capacity for growth in recruitment
Marketing area capacities are assessed quarterly using an external benchmarking model that takes into account geographic data, ABS data and franchise settlements
In 132 marketing areas, 118 greenfield sites are available
We have capacity to increase our franchise footprint from 412 to 586
* Information based on Dec14 Quarter Broker Resource Model
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3 4 4 2 1
39 31
21
13 14
NSW VIC QLD SA WA
Marketing Areas
Closed Open
153
88 89
30 52
62
45 28
17
22
NSW VIC QLD SA WA
Franchises
Potential Existing
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Disclaimer
The information contained in this presentation is intended to be a general summary of Mortgage Choice Limited
(Mortgage Choice) and its activities as at 31 December 2014, and does not purport to be complete in any respect.
The information in this presentation is not advice about shares in Mortgage Choice (or any other financial product),
nor is it intended to influence, or be relied upon by, any person in making a decision in relation to Mortgage Choice
shares (or any other financial product). This presentation does not take into account the objectives, financial situation
or needs of any particular individual. You should consider your own objectives, financial situation and needs when
considering this presentation and seek independent investment, legal, tax, accounting or such other advice as you find
appropriate before making any financial or investment decision.
This presentation contains some forward looking statements. Such statements only reflect views held by Mortgage
Choice as at the date of this presentation and are subject to certain risks, uncertainties and assumptions. Actual events
and results may vary from the events or results expressed or implied in these statements. You should not place undue
reliance on any of these statements.
No representation or warranty is made in respect of the accuracy or completeness of any information in this
presentation, or the likelihood of any of the forward looking statements in the presentation being fulfilled.
For further information visit www.mortgagechoice.com.au
or contact Jessica Darnbrough– Head of Corporate Affairs
Ph: (02) 8907 0472 Email: jessica.darnbrough@mortgagechoice.com.au
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