REG - Mortgage Adv. Bureau - Final Results for the year ended 31 December 2024
18/03/2025 07:15
For best results when printing this announcement, please click on link below:
https://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20250318:nRSR0431Ba&default-theme=true
RNS Number : 0431B Mortgage Advice Bureau (Hldgs) PLC 18 March 2025
This announcement contains inside information for the purposes of Article 7 of
Regulation (EU) No 596/2014 as it forms part of UK domestic law by virtue of
the European Union (Withdrawal) Act 2018. The person responsible for this
announcement is Emilie McCarthy, CFO.
18 March 2025
Mortgage Advice Bureau (Holdings) plc
("MAB" or the "Group")
Final Results for the year ended 31 December 2024
Mortgage Advice Bureau (Holdings) plc (AIM: MAB1), a leading technology-driven
UK mortgage network and broker, is pleased to announce its final results for
the year ended 31 December 2024.
Financial summary
2024 2023 Change
Revenue £266.5m £239.5m +11.3%
Gross profit / Margin £81.9m / 30.7% £70.2m / 29.3% +16.7% / 1.4pp
Admin expenses / Admin expenses ratio(*) £50.5m / 19.0% £46.7m / 19.5% +2.7% / -0.5pp
expenses
Adjusted PBT(* ) / Adjusted PBT Margin(*) £32.0m / 12.0% £23.2m / 9.7% +38.0% / +2.3pp
Statutory PBT / Statutory PBT Margin £22.9m / 8.6% £16.2m / 6.8% +41.5% / +2.2pp
Adjusted diluted EPS(*) 39.2p 29.6p +32.4% / +9.6p
Basic EPS 27.6p 23.6p +17.0% / +4.0p
Adjusted cash conversion(*) 120% 119% +1.0pp
Net debt(*) / Leverage(*) (£9.7m) / 0.3x (£15.2m) / 0.6x +£5.5m / -0.3x
Proposed final dividend 14.8p 14.7p +0.4% / +0.1p
Performance highlights
· Adjusted profit before tax (PBT) up 38.0% to £32.0m (2023: £23.2m)
· Gross mortgage completions(1) (including Product Transfers) up 3.9%
to £26.1bn (2023: £25.1bn)
· Market share of new mortgage lending((1)) up to 8.4% (2023: 8.3%)
· Closing mainstream advisers((2)) up 1.2% to 1,941 (2023: 1,918). The
number of mainstream advisers(2) at 14 March 2025 was 1,985
· Revenue per mainstream adviser(2) up 12.3% to £138.7k (2023:
£123.5k)
* In addition to statutory reporting, MAB reports alternative performance
measures (APMs) which are not defined or specified under the requirements of
International Financial Reporting Standards (IFRS). The Group uses these APMs
to improve the comparability of information between reporting periods, by
adjusting for certain items which impact upon IFRS measures, to aid the user
in understanding the activity taking place across the Group's businesses. APMs
are used by the Directors and management for performance analysis, planning,
reporting and incentive purposes. A summary of APMs used and their closest
equivalent statutory measures is given in the Glossary of Alternative
Performance Measures.
Peter Brodnicki, Founder and Chief Executive, commented:
"MAB achieved strong financial growth in 2024 and, by doing so, maintained its
long track record of outperformance and market share growth in all market
conditions.
Strategic spend on technology and digital marketing continued to increase,
supporting our plans to deliver a higher level of sustainable growth and
futureproof our operations. Aligning our business model to evolving customer
preferences for research, advice and seamless transactions will enable
advisers to access more potential customers and retain an increasing number of
existing ones.
In February, we hosted a Capital Markets Day, during which my team and I set
out MAB's vision to become our customers' leading financial partner through
life's key moments and demonstrated the significant progress we have made in
adapting and evolving our business model to achieve a far wider consumer
reach, drive greater lead flows, and increase productivity, efficiency, and
margins.
MAB has been listed on AIM for just over a decade. During that time, we have
built a market-leading, specialist network for mortgage advisers while
returning over £125m in dividends to shareholders - greater than our market
capitalisation at IPO. The Board is now evaluating the potential transition to
the Main Market of the London Stock Exchange, which should provide access to a
broader investor base and further enhance the Group's market profile.
2025 has begun strongly and in line with expectations, with many AR firms
anticipating growth in adviser numbers this year while maintaining a focus on
increasing profitability through higher productivity. We also have the
opportunity to scale our invested businesses and build upon the impressive
adviser productivity levels they are already achieving to deliver strong and
sustainable shareholder returns over the long term."
Enquiries:
Mortgage Advice Bureau (Holdings) plc Via Camarco
Peter Brodnicki, Chief Executive Officer
Ben Thompson, Deputy Chief Executive Officer
Emilie McCarthy, Chief Financial Officer
Nominated Adviser and Joint Broker
Keefe, Bruyette & Woods, a Stifel Company +44 (0)20 7710 7600
Erik Anderson / Nick Harland / Francis North / Harry Billen
Joint Broker
Peel Hunt LLP +44 (0) 20 7418 8900
Andrew Buchanan / Oliver Jackson
Financial PR
Camarco mab@camarco.co.uk (mailto:mab@camarco.co.uk)
Tom Huddart / Louise Dolan / Letaba Rimell +44 (0) 203 757 4980
Investor Relations Investor.relations@mab.org.uk
About Mortgage Advice Bureau:
MAB is one of the UK's leading consumer intermediary brands and specialist
networks for mortgage advisers.
Through its partner firms known as Appointed Representatives (ARs), MAB has
approximately 2,000 advisers providing expert advice to customers on a range
of mortgage, specialist lending, protection, and general insurance products.
MAB supports its AR firms with proprietary technology and services, including
adviser recruitment and lead generation, learning and development, compliance
auditing and supervision, and digital marketing and website solutions.
For more information, visit www.mortgageadvicebureau.com
(https://nam02.safelinks.protection.outlook.com/?url=https%3A%2F%2Furldefense.proofpoint.com%2Fv2%2Furl%3Fu%3Dhttp-3A__www.mortgageadvicebureau.com_%26d%3DDwMF-g%26c%3DeuGZstcaTDllvimEN8b7jXrwqOf-v5A_CdpgnVfiiMM%26r%3DNj006SAhpfJGzqX7TkdnFCOXt8K8HLR6t-m0tfk0sKk%26m%3DgFRfhF8o351YluA18Bjv7ycyKw7h2VVplazDY2IEW0sQ8C0AaYe1Qup_V9gmZQNd%26s%3DKfp85WcIcWHD48Cv6_MtN85WTzPhbcPhgoql1Us5h60%26e%3D&data=05%7C02%7CLetaba.Rimell%40camarco.co.uk%7C49fa9aa74f034fc9a49108dcfff2bf39%7C77a5f6209d7747dba0cd64c70948d532%7C1%7C0%7C638666665356187099%7CUnknown%7CTWFpbGZsb3d8eyJFbXB0eU1hcGkiOnRydWUsIlYiOiIwLjAuMDAwMCIsIlAiOiJXaW4zMiIsIkFOIjoiTWFpbCIsIldUIjoyfQ%3D%3D%7C0%7C%7C%7C&sdata=OvOcJHyFYzHfR6M9dFsyhwxgXQbIjrac6cGpXoERDmo%3D&reserved=0)
Chief Executive's Review
Overview of 2024
2024 started positively, with lower mortgage rates fuelling optimism and
expectations of rate cuts through the year. However, delays in these cuts
slowed the anticipated rebound in house purchase and refinance activity during
the first half of the year. Following the General Election in July, swap rates
and mortgage pricing eased, only to climb again towards the year-end as
markets digested Labour's first budget in 14 years, set against a backdrop of
global uncertainty around US trade policy and inflation.
Despite these challenges, MAB achieved strong financial growth in 2024.
Revenue for the year rose by 11.3% to £266.5m (2023: £239.5m), outpacing the
7.3% growth in UK gross lending over the same period(1). Profitability, as
measured by adjusted PBT, also saw a significant increase of 38.0%, rising
from £23.2m in 2023 to £32.0m in 2024.
In 2024, MAB continued to invest in technology and digital marketing
('strategic spend') to drive organic growth. MAB remains well-positioned for
sustainable growth and has proved to be resilient in adverse and subdued
market conditions. We have a strong focus on futureproofing our business model
to align with evolving customer preferences in how they research, receive
advice and conduct transactions seamlessly. For us, how we grow is just as
important as how fast we grow, and our deliberate strategy positions us
uniquely to capitalise on the significant and growing opportunities we
generate.
We maintain our focus on adviser productivity, achieving significant
improvements in 2024. Productivity, as measured by revenue per adviser,
increased by 12.3% from £123.5k to £138.7k over the period. Enhancing
productivity remains a key priority, with technology and lead generation
playing a crucial role in driving further operational efficiency and revenue
growth.
Lead generation and lifetime customer value
MAB has been built on a foundation of providing exceptional service for
introducer lead sources and their customers. We have further strengthened this
commitment by investing in early customer engagement, data analytics and
profiling, to gain deeper insights into the needs of both existing and future
customers. These enhancements not only improve the customer experience but
also drive greater lifetime value.
We have added digital lead generation to drive additional lead flow from
existing lead sources, including early-stage researchers that are not yet
ready to speak to an adviser. This enables us to guide customers on their
journey to become mortgage-ready, enhancing early engagement and converting a
greater percentage of opportunities into completed business. Through our
proprietary technology ('MIDAS Platform'), we track the effectiveness of this
approach. Customer referrals from existing lead channels have increased, and
we continue to optimise this engagement strategy to maximise lead conversion.
Customer retention remains a key priority, with approximately 40% of our
annual mortgage applications coming from returning customers who have
transacted previously with MAB ARs. As the client bank continues to expand, so
do retention opportunities, enabling our ARs to strengthen long-term
relationships with customers and drive sustainable growth. To support this, in
2024, MAB invested in a 'Mortgage Monitoring' tool, which is primarily
designed to help ARs be more successful at communicating with, and retaining,
more customers. This has been rolled out across all our ARs and is
particularly timely given the high volume of mortgage maturities forecast in
2025. This tool provides monthly updates to clients and continuously scans the
market, alerting customers as to when securing a new mortgage deal would be
beneficial. This innovation is expected to enhance retention while delivering
a superior customer experience at minimal cost.
National, local and organic lead sources
The acquisition of Fluent strengthened MAB's market position, providing access
to national lead sources and new digital channels, including strategic
partnerships with MoneySuperMarket and Compare the Market. Building on that
foundation, we have continued to expand and enhance our national lead sources.
Together, these partnerships enable us to engage with customers early in their
research process, leveraging data-driven insights to tailor our services and
enhance lead conversion.
Lead generation - acquiring new customers, retaining existing ones, and
increasing customer lifetime value - remains a key point of differentiation
for MAB. Combined with our 'MIDAS Platform' technology, lead generation is a
critical driver of adviser productivity and AR growth, performance, and
retention. As technology and Artificial Intelligence (AI) continue to evolve,
they will play a pivotal role in how our partner firms acquire, retain, and
maximise value for their customers.
We plan to continue investing in these areas, ensuring MAB's business remains
futureproofed and continues to deliver strong, sustainable, and profitable
growth over the long term.
Contribution from our associates and subsidiaries
MAB operates a capital-light AR platform model, maintaining a consistently
modest net debt position and low leverage. This financial strength enables us
to make selective equity investments in top-performing companies. We
collectively refer to these subsidiaries and associates as our 'invested
businesses'.
Returns from these investments have been reinvested to enhance our value
proposition, including advancements in technology and best practices, which
significantly benefit our AR platform model. This hybrid model fosters a
virtuous circle, driving operational efficiencies, synergies, and scalability
while strengthening MAB's operating leverage.
MAB has built a strong portfolio of associates and subsidiaries, having
acquired minority and majority stakes as well as making full acquisitions.
These strategic investments enhance our market position in key specialist
areas, including new-build mortgages and digital customer lead generation,
reinforcing our leadership and expanding our capabilities. These investments
are complementary to, and supported by, the growth of our core platform AR
model.
The contribution to Group revenue and profit from our invested businesses has
grown significantly since 2019 and is expected to continue increasing. On 29
May 2024, MAB acquired the remaining 20% stake in our subsidiary First
Mortgage Direct (FMD) for £9.3m.
Each acquisition is carefully aligned with a strategic objective. In 2022, our
investment in Fluent marked a deliberate strategic move towards acquiring new
customers through national and digital lead sources, including via Price
Comparison Websites (PCW)... The acquisition of Fluent was immediately
followed by a very challenging macroeconomic period triggered by the Truss
mini budget. However, by focusing on returning the business to growth, we are
pleased to report that Fluent delivered £4.4m in adjusted profit before tax
(PBT) in 2024, an encouraging turnaround from a £1.1m loss in 2023. Fluent is
now well-positioned for continued growth and plays a fundamental role in the
Group's strategy for national lead sources
We also plan to scale organically our invested businesses, increase our
shareholdings, and streamline operations by consolidating them under unified
brands where it is strategically beneficial to do so. The productivity and
profitability of our invested businesses significantly exceeds those of our AR
network, and we expect them to make an increasing contribution to the Group's
overall performance and long-term growth.
Technology and AI
While many industry players are shifting away from in-house solutions,
proprietary technology remains central to our strategy. Our continued
investment in 'MIDAS Platform', our proprietary technology platform,
strengthens our ability to optimise operational efficiency and drive revenue
growth from new lead flow, lead nurture, customer retention, adviser
productivity and customer lifetime value.
We firmly believe that technological advancement and AI will revolutionise our
industry. By retaining control of our technology, we can innovate freely,
develop tailored solutions, and seamlessly integrate with our chosen partners,
ensuring we stay ahead in a rapidly evolving market.
MAB recognises the growing importance of early customer engagement, which
often starts well before they are ready to transact. A key focus area of
'MIDAS Platform' is enhancing the technology experience for both Advisers and
customers. We have already achieved significant time savings through
innovations such as automated disclosures, document sharing, direct
decision-in-principle, and a customer-facing fact find that enables pre-filled
data. Our goal is to cut the time required to complete a house purchase
mortgage in half by the end of 2025 and achieve a further meaningful reduction
in the medium term, leveraging the additional benefits of AI.
Upcoming upgrades will further enhance AR efficiency and have the potential to
boost adviser productivity, reinforcing our commitment to a faster, smarter,
and more seamless mortgage process.
Our roadmap incorporates greater automation and AI functionality to drive
growth and enhance operational efficiency across the business. These
advancements will futureproof our model and reinforce our leadership position
in the intermediary sector.
We see AI making a significant impact in four core areas:
1. Lead triage and nurturing - improving customer engagement and
conversion.
2. Advice - leveraging a "guardian angel" tool to support both advisers
and customers.
3. Operational efficiency - streamlining central processes to enhance
productivity.
4. Compliance and audit - ensuring accuracy, consistency, and regulatory
adherence.
By embracing these innovations, we are shaping the future of mortgage advice
and customer experience.
Adviser productivity and growth
Adviser numbers and adviser productivity are key drivers of MAB's organic
growth. Now that the housing and mortgage markets have stabilised and show
signs of sustainable recovery, AR confidence is returning. As a result, we
anticipate recruiting new ARs into our network, while existing ARs are
expected to fill more adviser vacancies, driving overall adviser growth. We
are also forecasting stronger adviser productivity.
Additionally, our invested businesses have significantly higher adviser
productivity than the average of our AR network and by sharing best practices
and enhancing AR productivity through improvements in the 'MIDAS Platform' and
AI, we expect to elevate performance levels across the Group.
FCA Regulation
Consumer Duty
MAB is committed to delivering the right outcomes for customers in accordance
with the FCA Consumer Duty rules. These regulations, which emphasise
customer-centric practices, are embedded in our operations and actively
overseen by senior leadership. This ensures we consistently uphold the highest
standards of consumer protection, reinforcing trust and long-term customer
relationships.
Pure Protection - Market Study
In August 2024, the FCA announced a market study into the Distribution of Pure
Protection Products to Retail Customers. Delivering good customer outcomes has
always been at the heart of MAB's strategy and culture. We view this as a
positive initiative for the market, as clearer governance aligns with, and
supports, our commitment to high standards, transparency, and customer-centric
practices across the Group.
As with Consumer Duty, we fully support elevating industry standards. We
believe that raising the bar will drive market consolidation, presenting a
strategic opportunity for MAB.
Simplifying responsible lending and advice rules for mortgages
The FCA is taking steps to improve access and flexibility for mortgage
borrowers. The regulator has reminded firms of the flexibility within its
rules, particularly regarding affordability stress testing. Currently the
stress testing applied by lenders prevents a significant number of renters
from becoming First Time Buyers (FTBs). The FCA will very shortly launch a
Call for Evidence on current and alternative approaches to stress testing.
In a pro-growth environment, and especially in a falling interest rate
environment, we believe that any changes in this area will lead to more
successful FTB applications. We welcome this move by the FCA.
Additionally, the FCA will soon consult on ways to make it easier for
customers to:
- Remortgage with a new lender
- Reduce their overall cost of borrowing through term reductions
- Discuss their options with a firm outside of a regulated advice
process
Throughout this work, the FCA will work closely with HM Treasury, the Bank of
England, the Financial Policy Committee, and the Prudential Regulatory
Authority. For a variety of reasons, we strongly welcome the FCA's focus on
these matters and will closely monitor developments with interest.
Advancing MAB's sustainability strategy
MAB continues to enhance its sustainability approach, with a focus on:
· Environmental Leadership and Advocacy
· Social Responsibility and
· Strong Governance and Oversight.
In 2024, our key activities included:
· Supporting energy-efficient homes through tailored advice and funding
solutions
· Promoting the adoption of 'Green Mortgages', by collaborating with
lenders and advisers to increase accessibility and awareness
· Enhancing internal climate risk governance by embedding ESG
considerations into decision-making at all levels.
Resilient Homes
In 2024, MAB launched Resilient Homes, a pioneering initiative that connects
homeowners with solutions to improve their homes' energy efficiency. Through
MAB's Resilient Homes proposition, we provide our ARs with the means to help
customers explore upgrade opportunities via trusted and fully vetted partners,
assess the associated costs, secure financing solutions, and access mortgage
and protection advice. With 11.5 million owner-occupied homes across England
and Wales - representing 72% of all households - there is a significant
opportunity to support energy efficiency improvements. Resilient Homes
strengthens our AR proposition while positioning MAB as a key player in
advancing the UK's net-zero ambitions.
Approximately 50% of MAB mortgage customers acquire or remortgage properties
with an EPC rating of D or below. If just 2% of these customers chose to
implement energy improvements such as solar panels with battery storage, MAB
advisers would facilitate greenhouse gas reductions of approximately 868
tCO₂ annually. This impact equates to planting approximately 34,720 mature
trees each year or eliminating four million miles of standard car travel.
While the Green Mortgage market is still maturing, and many customers have yet
to fully engage or afford home energy improvements, we firmly believe this
market will scale significantly as environmental concerns, energy costs, and
climate change pressures become increasingly compelling.
MAB is already well-positioned for this shift, offering a comprehensive
end-to-end solution while actively engaging customers and providing tailored
mortgage advice on this important topic.
Green Mortgage growth
Green Mortgages are lender-defined products that include an incentive for
borrowers to either purchase an energy-efficient property or improve the
energy efficiency of an existing property. After a challenging 2023, green
mortgage lending rebounded strongly in 2024, accounting for 7.6% of total
lending - a 75% increase in value compared to the previous year. Growth was
particularly strong in Q4, driven by greater lender innovation and rising
consumer demand. Notably, Green Mortgages are increasingly being used for both
new-build and older properties, indicating a market shift towards
retrofit-focused lending solutions.
ESG performance monitoring
MAB has strengthened its ESG reporting framework by introducing a refined set
of sustainability key performance indicators (KPIs). These KPIs include energy
efficiency metrics related to mortgages, community engagement measures, and
social impact related measures, ensuring greater transparency and
accountability. A baseline was established in 2024, with improvement targets
to be defined in 2025.
Climate risk integration
MAB has strengthened its climate risk management approach by embedding
sustainability within its governance structure and risk framework. The
Sustainability Committee, which includes senior leadership and executive
directors, provides oversight on ESG matters and reports directly to the
Board. In addition, climate-linked performance incentives have been introduced
for senior leadership, reinforcing MAB's commitment to long-term
sustainability goals.
2024 sustainability highlights:
· Customer Experience: Feefo rating increased to 5 stars, with
Trustpilot at 4.7, reflecting consistently high satisfaction levels.
· Community Engagement: Expanded social impact initiatives from 13 to
17, with increased funding of £50,000 directed towards charitable and
community-led projects.
· Total carbon emissions increased marginally from 335 tCO₂e to 340
tCO₂e (market basis), driven by higher gas consumption for office heating.
However, electricity consumption decreased by 11%, and zero waste to landfill
was maintained at HQ.
· Green Mortgage growth: Green lending rebounded strongly in 2024, now
representing 7.6% of total lending volume - a 75% year-on-year increase, with
the strongest growth in Q4 2024. Uptake is more evenly split between new-build
and older properties, and 73% of Green Mortgages now support house purchases.
· Through our Resilient Homes proposition, we continue to integrate
certified retrofit services into mortgage advice, helping customers explore
energy efficiency improvements.
MAB remains dedicated to embedding sustainability across all areas of the
business, ensuring alignment with evolving regulations, industry standards,
and market expectations. Looking ahead, we will continue to refine our ESG
strategy to enhance impact and accountability while collaborating with
industry partners to drive innovation in sustainable home financing.
Medium-term growth targets
The Board has set medium-term growth targets that reflect our ambition to
scale MAB and deliver significant value for stakeholders:
· Double revenue from that achieved in 2024
· Adjusted PBT margin of >15%
· Adjusted cash conversion of >100%
· Double market share (new mortgage lending)
Capital Markets Day
In February 2025 we hosted a Capital Markets Day at the London Stock Exchange
for shareholders, prospective investors and analysts. Founder and Chief
Executive Officer (CEO) Peter Brodnicki, Deputy CEO Ben Thompson, Chief
Financial Officer (CFO) Emilie McCarthy and Chief Risk Officer (CRO) Paul Gill
led the presentations of MAB's vision, business model and strategy and
medium-term growth targets.
The event included presentations on:
· Mortgage innovation opportunities,
· Customer acquisition and lifetime value,
· Platform model, scalability and performance,
· Regulation and Consumer Duty,
· Growth and capital allocation, and
· Insights from our ARs.
Consideration of move to Main Market
The Board continues to evaluate a potential transition to the Main Market,
with the ambition of securing inclusion in the FTSE 250 index. This step
should open access to a broader investor base and further enhance the Group's
market profile. We are committed to ensuring that any transition is both
strategic and responsible, with timing dependent on continued strong
performance. Further updates will be provided as appropriate.
Current trading and outlook
We experienced increased mortgage activity through much of the second half of
2024, a trend we expect to continue through 2025. During this period, the cost
of borrowing and mortgage rates declined from recent highs, as the Bank of
England Base Rate began to fall - from 5.25% to 4.75% at the end of the year
and to 4.5% in February this year.
While inflation remains lower, it remains a factor to watch. However, when
combined with real wage increases, we anticipate an improvement in mortgage
affordability for all borrowers.
The release of pent-up demand became evident in Q4 2024, with mortgage
applications rising by 15% compared to Q4 2023. According to UK Finance,
gross mortgage lending is forecast to grow by 11% in 2025, while Product
Transfers are projected to rise by 13%.
Re-financing will be a key driver of activity in the second half of2025 and
into 2026, fuelled by a large volume of maturing mortgage deals during this
period. This surge is driven by 5-year fixed mortgages from the post-pandemic
boom, and 2-year fixed deals from 2022/23, which saw high volumes immediately
following the Truss mini budget. Many of these mortgages were secured at
higher rates, prompting borrowers to seek better terms as rates continue to
decline.
The housing market is showing signs of recovery as affordability improves,
driven by increased buyer activity and a higher volume of new properties
coming onto the market in late 2024 and into 2025. If mortgage rates remain
stable or decline further, and market confidence continues to grow, we
anticipate stronger purchase activity in 2025. While housing transactions are
still below long-term averages, a recovery from current lows appears
increasingly likely.
We support the Government's growth agenda and its push to increase new housing
development in the UK. MAB has a strong track record in new-build mortgages,
and as this sector gains momentum - potentially in late 2025 - it should
provide a significant tailwind for the Group. Additionally, we welcome ongoing
discussions by the Government and UK regulators on reviewing mortgage lending
policies to help more renters transition into First-Time Buyers. MAB has long
supported this initiative, and we are eager to see how it develops.
Finally, the rollout of new technology enhancements and lead-generation
initiatives is set to drive further growth in 2025. Many AR firms anticipate
an increase in adviser numbers, alongside a continued focus on profitability
through higher productivity levels.
We are well placed to deliver another year of strong revenue and profit
growth.
Financial Review
Revenue
The Group delivered strong growth in the year. Revenue was up 11.3% to
£266.5m (2023: £239.5m) and continued to be generated from three core areas,
as follows:
Income source (£m) 2024 2023 Change
Mortgage procuration fees 105.8 98.0 +7.9%
Protection and General insurance (GI) commission 104.7 93.1 +12.4%
Client fees 51.2 43.4 +18.1%
Other income 4.8 5.0 -3.4%
Total 266.5 239.5 +11.3%
The business mix by lending value is set out below.
Business mix (%) 2024 2023 Change
Purchase 53% 47% +6pp
Remortgage 25% 27% -2pp
Product transfer 22% 26% -4pp
Total 100% 100%
This performance was driven by increases in all income areas and reflects a
favorable shift in mortgage mix and continued focus on delivering great
customer outcomes.
· Mortgage procuration fees rose by 7.9% to £105.8m, underpinned by a
strong second-half performance and a higher proportion of house purchase
transactions. The average mortgage size increased by 5.1% outpacing the
average 1.3% rise in house prices between 2023 and 2024.
· Protection and General insurance commission grew by 12.4% to
£104.7m, reflecting the key role that advisers play in enhancing customer
outcomes and helping clients safeguard their homes - typically their most
significant financial commitment. In 2024, the Protection attachment on
approved mortgages remained at c38%.
· Client fees increased by 18.1% to £51.2m. This was driven by an
increase in second charge mortgages within Fluent and greater house purchasing
activity, which has a higher Client Fee attachment rate.
The proportion of revenue from each income stream remained broadly consistent:
Income source 2024 2023
Mortgage procuration fees 40% 41%
Protection and General insurance (GI) commission 39% 39%
Client fees 19% 18%
Other income 2% 2%
Total 100% 100%
Revenue per mainstream adviser (productivity)
Revenue per mainstream adviser grew 12.3% in 2024 from £123,500 to £138,700
driven by an increase in the proportion of advisers within our invested AR
firms (who generate significantly above average revenue per adviser) - greater
adoption of technology; and a reduction in the number of new advisers, who
typically take 6-9 months to reach full productivity.
The productivity dynamic between invested and non-invested firms, particularly
for first-charge mortgage products, is noteworthy.
In 2024, the first charge mortgage revenue (including procuration fee,
protection and GI commission, and client fees) per average mainstream adviser
was c80% higher in invested firms than non-invested ARs.
Average number of advisers Productivity per adviser (£000s)
Invested AR firms 426 178.3
Non - invested AR firms 1,442 98.9
Gross profit and gross profit margin
Gross profit increased 16.7% to £81.9m (2023: £70.2m) with a gross margin
improving 30.7% (2023: 29.3%). This growth was driven by a combination of
operational efficiencies, an improved business mix, and contributions from
high-margin subsidiaries.
The shift towards house purchases - where protection attachment rates are
typically higher -further supported gross profit growth.
Margin expansion was also driven by the strong performance of MAB's
higher-margin subsidiaries - FMD, Auxilium, and Vita. In these consolidated
businesses, adviser employment costs are offset by retaining all revenue
within the Group, resulting in gross profit margins well above our Group
average. This emphasis on higher-margin subsidiaries is a core pillar of MAB's
growth strategy, enabling continued investment in innovation, particularly in
technology.
Fluent and FMD together contributed to a total margin improvement of £7.0m,
Fluent accounting for £4.8m (c.41%) of the £11.7m increase, benefiting from
the rightsizing of its cost base in H1 2023 and a higher lead conversion rate,
with FMD accounting for £2.2m driven by a higher volume of Protection.
Administrative expenses
Administrative expenses increased by £3.8m (+8.2%) to £50.5m in 2024,
reflecting ongoing investment in the Group's capabilities to support long-term
organic growth.
During the year, £1.3m of software development costs relating to the 'MIDAS
Platform' were capitalised for the first time, ensuring alignment between
investment and future economic benefits. Adjusting for this capitalisation,
the underlying administrative expense ratio remained broadly stable at 19.4%,
compared to 19.5% in 2023.
The Group continues to invest strategically in technology and digital
marketing, leveraging a combination of in-house expertise and third-party
resources. These investments are expected to drive enhanced lead generation
opportunities, greater operational efficiencies and therefore future revenue
growth and future productivity.
The Group benefits from a relatively fixed cost base, where cost increases
typically lag revenue growth, creating opportunities for operating leverage as
the Group continues to scale.
Adjusted Profit Before Tax (PBT) and margin
Adjusted PBT increased by 38.0% to £32.0m (2023: £23.2m), with the adjusted
PBT margin improving to 12.0% (2023: 9.7%). Excluding the capitalisation of
'MIDAS Platform' Capex, adjusted PBT was £30.7m, representing a 32.5%
increase, with a corresponding margin of 11.5%.
The significant improvement in adjusted PBT margin was driven by a higher
gross profit margin, combined with a broadly stable administrative expense
ratio, reflecting the Group's ability to scale efficiently.
All areas of the business contributed to profit growth, with Fluent delivering
a particularly strong performance, contributing £5.5m to the increase-clear
evidence of the required business turnaround.
Adjusted profit before tax excludes costs associated with acquisitions and
investments, including amortisation of acquired intangibles, non-cash
operating expenses associated with the put and call option agreements on the
Fluent and Auxilium acquisitions and non-recurring restructuring costs.
Statutory profit before tax
Statutory profit before tax was £22.9m (2023: £16.2m), with £2.9m higher
costs relating to acquisitions and investments offset by £0.5m of
non-recurring restructuring costs in 2023. As a result, the margin on
statutory profit before tax was 8.6% (2023: 6.8%).
Taxation
The effective tax rate on adjusted profit before tax is 25.3% (2023: 21.8%),
primarily reflecting the full year impact of the increase in the prevailing UK
corporation tax rate. The adjusted effective rate is broadly in line with the
headline UK tax rate with non-deductible expenses being offset by untaxed
profit from associates.
The tax charge of £6.8m (2023: £3.7m) represents an effective tax rate on
statutory profit before tax of 29.7% (2023: 23.0%), which is higher than the
headline UK corporation tax rate of 25% mainly due to disallowable acquisition
related costs.
Earnings per share
In 2024, adjusted diluted earnings per share(*) was 39.2p (2023: 29.6p) and
basic earnings per share increased to 27.6p (2023: 23.6p). In 2024 the 11.6p
difference between adjusted and basic EPS is mainly due to £6.9m of
acquisition related costs net of any tax impact attributable to the parent.
Dividend
The Board is pleased to propose a final dividend of 14.8.p per share (2023:
14.7p). This makes a proposed total dividend for the year of 28.2p per share
(2023: 28.1p). This represents a cash outlay of £8.6m (2023: £8.4m).
Following payment of the dividend, the Group will continue to maintain
significant surplus regulatory reserves.
The record date for the final dividend will be 25 April 2025 and the payment
date 27 May 2025. The ex-dividend date will be 24 April 2025.
As previously announced, the Board expects to pay a dividend of approximately
50% of adjusted post-tax and minority interest profits in 2025 and is
committed to a progressive dividend policy thereafter.
Adjusted cash conversion
The Group's operations generate strong positive cash flow, as evidenced by the
net cash from operating activities of £38.6m (2023: £29.7m). Adjusted cash
conversion* was 120% (2023: 119%), which supports our expectation that
adjusted cash conversion will continue to exceed 100%.
Capital adequacy
The Group enjoys significant headroom on the regulatory requirements of its
regulated entities. The Group's regulatory capital requirement represents 2.5%
of regulated revenue in regulated entities within the Group and increased to
£6.2m at 31 December 2024 (2023: £5.5m) as a result of further growth in
regulated activity. At 31 December 2024 the Group had headroom of £43.0m
(2023: £28.0m) on its regulatory capital requirement, a 690% surplus
Capital allocation
In February 2025 the Board approved a new capital allocation framework,
transitioning from the previous payout-based dividend policy to a progressive
dividend policy that has no specific payout ratio target. This revised
approach reflects our desire to optimise the mechanism by which capital is
returned to shareholders and ensure sufficient capital is available to fund
growth opportunities.
The Group actively monitors its capital position, strategically allocating
resources based on defined return criteria. Our capital allocation framework
strikes a balance between funding growth initiatives and delivering returns to
shareholders, as outlined below:
Financial resilience. Ensuring our regulated entities meet their capital
requirements while maintaining a low level of Group leverage. In 2024 our
surplus regulatory capital was £43.0m (2023: £28.0m) and our net debt was
£9.7m (2023: £15.2m) equating to leverage of 0.3x (2023: 0.6x).
Organic growth investment. We define this as 'strategic spend', which we
commit to future-proof MAB, including technology, AI, digital marketing and
personnel. In 2024 the Group had a combined strategic spend of £8.4m,
comprising £6.3m of technology spend (including £2.0m of Dashly minority
acquisition investment), £1.6m of digital marketing spend and £0.5m spent on
recruitment of new personnel.
Ordinary dividends. We expect to pay a combined £16.3m of dividends to
shareholders in respect of 2024, with the final dividend payment expected on
27 May 2025.
M&A. In 2024 we exercised the option to purchase the remaining 20% of FMD
for a total cash consideration of £2.3m (plus £7.0m of shares issued) and
£0.5m of deferred cash consideration paid to Fluent.
Surplus capital. In 2024 there were no additional distributions beyond
ordinary dividends.
Corporate Information
The financial information for the year ended 31 December 2024 and the year
ended 31 December 2023 does not constitute the company's statutory accounts
for those years.
The statutory accounts for the year ended 31 December 2023 have been delivered
to the Registrar of Companies. The statutory accounts for the year ended 31
December 2024 will be delivered to the Registrar of Companies in due course.
The auditor's report on the accounts for the year ended 31 December 2024 and
31 December 2023 were unqualified, did not draw attention to any matters by
way of emphasis, and did not contain a statement under sections 498(2) or
498(3) of the Companies Act 2006.
Consolidated statement of comprehensive income for the year ended 31 December
2024
2024 2023
Note £'000 £'000
Revenue 3 266,537 239,533
Cost of sales 4 (184,636) (169,371)
Gross profit 81,901 70,162
Administrative expenses (50,511) (46,674)
Share of profit from associates 15 1,315 848
Costs relating to First Mortgage, Fluent and Auxilium options 5 (2,732) (4,277)
Amortisation of acquired intangibles 5 (5,160) (5,160)
Acquisition costs 5 (89) (159)
Restructuring costs - (539)
Gain/(Loss) on fair value measurement of derivative financial instruments 15 21 (190)
Operating profit 6 24,745 14,011
Finance income 8 585 291
Finance expense 8 (1,267) (1,427)
Unwinding of redemption liability 5 (626) (1,183)
(Loss)/Gain on remeasurement of redemption liability 5 (551) 4,486
Profit before tax 22,886 16,178
Tax expense 9 (6,804) (3,719)
Profit for the year 16,082 12,459
Total comprehensive income 16,082 12,459
Profit is attributable to:
Equity owners of the Parent Company 15,896 13,467
Non-controlling interests 186 (1,008)
16,082 12,459
Earnings per share attributable to the owners of the Parent Company
Basic 10 27.6p 23.6p
Diluted 10 27.4p 23.5p
Adjusted measures
Adjusted EBITDA 35,103 26,728
Adjusted profit before tax 32,023 23,200
Adjusted diluted earnings per share 39.2p 29.6p
Adjusted profit before tax (exc. software capex) 30,745 23,200
Adjusted diluted earnings per share (exc. software capex) 37.6p 29.6p
Further details of adjusted measures are provided within the Glossary of
Alternative Performance Measures.
Consolidated statement of financial position as at 31 December 2024
2024 2023
Note £'000 £'000
Assets
Non-current assets
Property, plant and equipment 12 5,047 5,799
Right of use assets 13 3,960 2,283
Goodwill 14 53,885 53,885
Other intangible assets 14 48,381 51,474
Investments in associates and joint venture 15 14,818 12,301
Derivative financial instruments 15 212 302
Trade and other receivables 16 1,089 353
Deferred tax asset 22 - 719
Total non-current assets 127,392 127,116
Current assets
Trade and other receivables 16 9,763 9,321
Cash and cash equivalents 17 23,675 21,940
Total current assets 33,438 31,261
Total assets 160,830 158,377
Equity and liabilities
Share capital 23 58 57
Share premium 24 55,163 48,155
Capital redemption reserve 24 20 20
Share option reserve 24 4,312 6,045
Retained earnings 24 14,109 15,921
Equity attributable to owners of the Parent Company 73,662 70,198
Non-controlling interests 1,433 4,211
Total equity 75,095 74,409
Liabilities
Non-current liabilities
Trade and other payables 18 2,979 2,642
Redemption liability 5 3,970 2,793
Lease liabilities 13 3,377 1,805
Derivative financial instruments 15 71 183
Loans and borrowings 19 8,735 12,426
Deferred tax liability 22 11,385 11,417
Total non-current liabilities 30,517 31,266
Current liabilities
Trade and other payables 18 36,503 35,225
Clawback liability 21 12,591 10,331
Lease liabilities 13 843 931
Loans and borrowings 19 5,102 5,824
Corporation tax liability 179 391
Total current liabilities 55,218 52,702
Total liabilities 85,735 83,968
Total equity and liabilities 160,830 158,377
The notes that follow form part of these financial statements.
The financial statements were approved by the Board of Directors on 17 March
2025.
P
Brodnicki
E McCarthy
Director
Director
Consolidated statement of changes in equity for the year ended 31 December
2024
Attributable to owners of the Parent Company
Capital redemption Non- controlling
Share premium reserve Share option Retained earnings interest
Share capital reserve Total Total equity
Note £'000s £'000s £'000s £'000s £'000s £'000s £'000s £'000s
Balance as at 1 January 2023 57 48,155 20 4,511 15,154 67,897 7,548 75,445
Profit for the year - - - - 13,467 13,467 (1,008) 12,459
Total comprehensive income - - - - 13,467 13,467 (1,008) 12,459
Transactions with owners
Acquisition of non-controlling interests 5 - - - - 942 942 (1,487) (545)
Share-based payment transactions 27 - - - 3,380 - 3,380 - 3,380
Current and deferred tax recognised in equity 9, 22 - - - 449 101 550 - 550
Reserve transfer 27 - - - (2,295) 2,295 - - -
Dividends paid 11, 29 - - - - (16,038) (16,038) (842) (16,880)
Total transactions with owners - - - 1,534 (12,700) (11,166) (2,329) (13,495)
Balance at 31 December 2023 57 48,155 20 6,045 15,921 70,198 4,211 74,409
and 1 January 2024
Profit for the year - - - - 15,896 15,896 186 16,082
Total comprehensive income - - - - 15,896 15,896 186 16,082
Transactions with owners
Acquisition of non-controlling interests 5 1 7,008 - (2,544) (1,730) 2,735 (2,735) -
Share-based payment transactions 27 - - - 1,682 - 1,682 - 1,682
Current and deferred tax recognised in equity 9, 22 - - - (692) 10 (682) - (682)
Reserve transfer 27 - - - (179) 179 - - -
Dividends paid 11, 29 - - - - (16,167) (16,167) (229) (16,396)
Total transactions with owners 1 7,008 - (1,733) (17,708) (12,432) (2,964) (15,396)
Balance at 31 December 2024 58 55,163 20 4,312 14,109 73,662 1,433 75,095
Consolidated statement of cash flows for the year ended 31 December 2024
2024 2023
Note £'000 £'000
Cash flows from operating activities
Profit for the period before tax 22,886 16,178
Adjustments for:
Depreciation of property, plant and equipment 12 1,133 1,225
Depreciation of right of use assets 13 718 857
Impairment of right of use assets 13 - 428
Amortisation of intangibles 14 5,707 5,470
Unwinding of loan arrangement fees 32 68 77
(Gain)/Loss from disposal of fixed assets 12 (4) 36
Share-based payments 27 2,552 4,429
Share of profit from associates 15 (1,315) (848)
Loss/(Gain) on remeasurement of redemption liability 5 551 (4,486)
Unwinding of redemption liability 5 626 1,183
(Gain)/Loss on fair value movements taken to profit and loss 15 (21) 190
Dividends received from associates 15 798 403
Finance income 8 (585) (291)
Finance expense 8 1,267 1,427
34,381 26,278
Changes in working capital
(Increase)/Decrease in trade and other receivables 16 (1,178) 1,432
Increase/ (Decrease) in trade and other payables 18 3,168 (283)
Increase in clawback liability 21 2,260 2,293
Cash generated from operating activities 38,631 29,720
Income taxes paid (6,599) (5,390)
Interest received 585 -
Acquisition of non-controlling interests 5 (2,585) (592)
Net cash generated from operating activities 30,032 23,738
Cash flows from investing activities
Purchase of property, plant and equipment 12 (381) (932)
Direct costs relating to right of use remeasurement 13 (45) -
Purchase of intangibles 14 (2,614) (1,121)
Acquisition of associates 15 (2,000) (469)
Net cash used in investing activities (5,040) (2,522)
Cash flows from financing activities
Repayment of borrowings 19,32 (4,350) (5,350)
Interest received - 304
Interest paid (1,397) (1,312)
Principal element of lease payments 32 (865) (907)
Acquisition of non-controlling interests 5 (249) (593)
Dividends paid to Company's shareholders 11 (16,167) (16,038)
Dividends paid to non-controlling interests (229) (842)
Net cash used in financing activities (23,257) (24,738)
Net increase/(decrease) in cash and cash equivalents 1,735 (3,522)
Cash and cash equivalents at the beginning of the period 21,940 25,462
Cash and cash equivalents at the end of the period 23,675 21,940
Notes to the consolidated financial statements for the year ended 31 December
2024
1 Accounting policies
Basis of preparation
The principal accounting policies adopted in the preparation of the
consolidated financial statements are set out below. The policies
have been consistently applied to all the years presented.
The consolidated financial statements are presented in Great British Pounds
and all amounts are rounded to the relevant thousands, unless otherwise
stated.
These financial statements have been prepared in accordance with UK-adopted
International Accounting Standards in conformity with the requirements of the
Companies Act 2006 that are applicable to companies that prepare financial
statements in accordance with IFRS.
The preparation of financial statements in compliance with adopted IFRS
requires the use of certain critical accounting estimates. It also requires
Group management to exercise judgement in applying the Group's accounting
policies. The areas where significant judgements and estimates have been made
in preparing the financial statements and their effect are disclosed in note
2.
The financial statements have been prepared on a historical cost basis, except
for derivative financial instruments that have been measured at fair value.
The Group's business activities, together with the factors likely to affect
its future development, performance and position are set out in the Strategic
Report as set out earlier in these financial statements. The financial
position of the Group, its cash flows and liquidity position are also set out
in the Strategic Report as set out earlier in these financial statements.
The Group made an operating profit of £24.7m during 2024 (2023: £14.0m) and
had net current liabilities of £21.4m as at 31 December 2024 (31 December
2023: £21.4m) and equity attributable to owners of the Group of £73.7m (31
December 2023:
£70.2m).
Going Concern
The Directors have assessed the Group's financial prospects until 31 December
2026, considering the current operating environment, and impact of the ongoing
geopolitical and macroeconomic uncertainties. The Directors' assessment
includes a review of the approved Group plan, the principal risks and
uncertainties as well as a review of profitability, cash flows, regulatory
capital requirements and compliance with borrowing covenants under the Group's
current debt facility.
Sensitivity analysis was conducted, applying severe but plausible stress tests
to key assumptions related to business volumes, revenue mix, cash position,
banking covenants and regulatory capital adequacy. This included reduction in
business volumes between 15% and 20% across each business area within the
Group. The Group's financial modelling shows that the Group should continue to
be cash generative, maintain a surplus on its regulatory capital requirements
and be able to operate within its current financing arrangements.
After evaluating this information, market and regulatory data, and leveraging
the knowledge and experience of the Group and its markets, the Directors are
comfortable that the Group will continue to generate positive cash flow,
maintain regulatory capital surpluses, continue operate, comply with its
existing financing arrangement and meet its liabilities as they fall due over
this period. Accordingly, the Directors continue to adopt the going concern
basis for the preparation of the financial statements.
The impact of climate risk on accounting estimates
In preparing the financial statements, the Directors have considered the
impact of climate change, taking into account the relevant
disclosures in the Strategic Report, relevant legislation and regulations.
The Group has assessed climate-related risks, covering both physical risks and
transition risks.
Many of the effects arising from climate change will be longer term in nature
with an inherent level of uncertainty and have limited impact on accounting
estimates for the current period.
Climate change may also have an impact on the carrying value of goodwill but
the potential impact of climate related risks on the Group's impairment
assessment is considered sufficiently remote at this point in time and
therefore no sensitivity analysis has been performed.
Changes in accounting policies
New standards, interpretations and amendments effective for the year ended 31
December 2024
The Group applied a number of standards and interpretations for the first time
in 2024 but these did not have an impact on the consolidated financial
statements of the Group. The Group has not early adopted any standards,
interpretations or amendments that have been issued but are not yet effective.
Future new standards and interpretations
A number of new standards and amendments will be effective for future annual
and interim periods, and therefore have not been applied in preparing these
consolidated financial statements. At the date of authorisation of these
financial statements, the following standards and interpretations, which have
not been applied in these financial statements, were in issue but not yet
effective:
IFRS S1 - General Requirements for Disclosure of Sustainability-related
Financial Information
IFRS S2 - Climate-related Disclosures
IFRS S1 and IFRS S2 are not expected to have a material impact on the results
of the Group other than to expand on climate related disclosures within the
financial statements. It is anticipated that transition reliefs for
comparative information prior to the first year of adoption will be utilised.
At the time of preparing the most recent full year consolidated financial
statements, a decision on the UK adoption of the IFRS Sustainability Standards
hasn't been made and any decision on a date to adopt with a decision now been
delayed to later on in 2025. We have decided not to voluntarily apply these
standards within these financial statements.
IFRS 18 - Presentation and disclosure in financial statements
Management have not undertaken a detailed assessment of the impact of IFRS 18.
Changes are only expected to impact the presentation and disclosure certain
items within the consolidated financial statements.
IFRS 9 Financial Instruments and IFRS 7 Financial Instruments: Disclosures
Management have not undertaken a detailed assessment of the impact of the
issued Amendments to the Classification and Measurement of Financial
Instrumentswhich amended IFRS 9 Financial Instruments and IFRS 7 Financial
Instruments: Disclosures. Changes are only expected to impact the presentation
and disclosure of certain items within the consolidated financial statements.
Current vs non-current classification
The Group presents assets and liabilities in the consolidated statement of
financial position based on current/non-current
classification. An asset is current when it is:
• Expected to be realised or intended to be sold or consumed in the normal
operating cycle.
• Held primarily for the purpose of trading.
• Expected to be realised within twelve months after the reporting date.
All other assets are classified as non-current.
A liability is non-current when the Company has the right to defer settlement
for at least 12 months after the end of the reporting date. All other
liabilities are classified as current.
Due to their short-term nature, the carrying value of cash and cash
equivalents, trade and other receivables approximates their fair value.
Basis of consolidation
Subsidiaries
Where the Company has control over an investee, it is classified as a
subsidiary. The Company controls an investee if all three of the following
elements are present: power over the investee, exposure to variable returns
from the investee and the ability of the investor to use its power to affect
those variable returns. Control is reassessed whenever facts and circumstances
indicate that
there may be a change in any of these elements of control.
The consolidated financial statements present the results of the Company and
its subsidiaries as if they formed a single entity. Intercompany transactions
and balances between Group companies are therefore eliminated in full.
The consolidated financial statements incorporate the results of business
combinations using the acquisition method. In the consolidated statement of
financial position, the acquiree's identifiable assets, liabilities and
contingent liabilities are initially recognised at their fair values at the
acquisition date. The results of acquired operations are included in the
consolidated statement of comprehensive income from the date on which control
is obtained. They are deconsolidated from the date on which control ceases.
Non-controlling interests
The Group recognises non-controlling interests in an acquired entity either at
fair value or at the non-controlling interest's proportionate share of the
acquired entity's net identifiable assets. This decision is made on an
acquisition-by-acquisition basis. For the non-controlling interests in First
Mortgage Direct Limited, Project Finland Topco Limited, Vita Financial Limited
and Aux Group Limited, the Group elected to recognise the non-controlling
interests at its proportionate share of the acquired net identifiable assets
and will be derecognised if the entity become a 100% owned subsidiary of the
Group. There are no other non-
controlling interests. See note 1 for the Group's accounting policies for
business combinations.
Associates
Where the Group has the power to participate in, but not control the financial
and operating policy decisions of another entity, it is classified as an
associate where the Group holds between 20% and 49% of the voting rights or if
evidence of significant influence can be clearly demonstrated. The Group
regularly reassesses the circumstances of each associate to confirm that the
treatment the classification as an associate remains appropriate. Associates
are initially recognised in the consolidated statement of financial position
at cost. Subsequently, associates are accounted for using the equity method,
where the Group's share of post acquisition profits and losses and other
comprehensive income is recognised in the consolidated statement of
comprehensive income (except for losses in excess of the Group's investment in
the associate unless there is an obligation to make good those losses).
Accounting policies for equity-accounted investees have been adjusted to
conform the accounting policies of the associate to the Group's accounting
policies. Profits and losses arising on transactions between the Group and its
associates are recognised only to the extent of unrelated investors' interests
in the associate. The investor's share in the associate's profits and losses
resulting from these transactions is eliminated against the carrying value of
the associate.
Any premium paid for an associate above the fair value of the Group's share of
the identifiable assets, liabilities and contingent liabilities acquired is
capitalised and included in the carrying amount of the associate. Where there
is objective evidence that the investment in an associate has been impaired
the carrying amount of the investment is tested for impairment. More
information on the assessment of impairment in associates is included in note
2.
Property, plant and equipment
Items of property, plant and equipment are initially recognised at cost. As
well as the purchase price, cost includes directly
attributable costs.
Depreciation is provided on all items of property, plant and equipment, except
freehold land at rates calculated to write off the cost of each asset on a
straight-line basis over their expected useful lives, as follows:
Gains and losses on disposal are determined by comparing the proceeds with the
carrying amount and are recognised in the consolidated statement of
comprehensive income. The Directors reassess the estimated residual values and
useful economic lives of the assets at least annually.
Other intangible assets
Intangible assets other than goodwill acquired by the Group comprise licences,
the website software, acquired technology, customer and member relationships,
lender and introducer relationships and trademarks and brands and are stated
at cost less
accumulated amortisation and impairment losses.
Software development can include both third party costs and internal staff
costs. Software development is only capitalised once development of the
intangible has commenced, where technical feasibility of the project has been
confirmed, and where it is probable the asset will generate future economic
benefits. All costs prior to this are expensed in the period. Software
development assets that are not in use are tested for impairment on an annual
basis.
Amortisation is charged to the consolidated statement of comprehensive income
on a straight-line basis over the period of the licence agreements or expected
useful life of the asset and is charged once the asset is available for use.
The Group reviews the expected useful lives of assets with a finite life at
least annually.
Amortisation, which is reviewed annually, is provided on intangible assets to
write off the cost of each asset on a straight-line basis over its expected
useful life as follows:
Impairment of non-financial assets
Impairment tests on goodwill and other intangible assets with indefinite
useful economic lives are undertaken annually at the financial year end or
whenever events or changes in circumstances indicate that their carrying
amount may not be recoverable. Other intangible assets are tested for
impairment whenever events or changes in circumstances indicate that the
carrying amount may not be recoverable. Where the carrying value of the asset
exceeds its recoverable amount (i.e. the higher of value in use and fair
value less costs to sell), the asset is written down accordingly.
Where it is not possible to estimate the recoverable amount of an individual
asset, the impairment test is carried out on the smallest group of assets to
which it belongs for which there are separately identifiable cash flows, its
cash generating units ('CGUs').
Goodwill is allocated on initial recognition to each of the Group's CGUs that
are expected to benefit from the synergies of the combination giving rise to
the goodwill.
Impairment charges are included in consolidated statement of comprehensive
income except to the extent that they reverse gains previously recognised in
other comprehensive income. An impairment loss for goodwill is not reversed.
Financial assets
In the consolidated statement of financial position, the Group classifies its
financial assets at amortised cost only if both of the
following criteria are met:
• the asset is held within a business model whose objective is to collect
the contractual cash flows; and
• the contractual terms give rise to cash flows that are solely payments of
principal and interest.
All other financial assets are classified as fair value through profit or
loss.
Loans and trade receivables
Loans and trade receivables are non-derivative financial assets with fixed or
determinable payments which arise principally through the Group's trading
activities, and these assets arise principally to collect contractual cash
flows and the contractual cash flows are solely payments of principal and
interest. They are initially recognised at fair value plus transaction costs
that are directly attributable to their acquisition or issue, and are
subsequently carried at amortised cost using the effective interest rate
method,
less provision for impairment.
Impairment provisions for trade receivables are recognised based on the
simplified approach within IFRS 9 using the lifetime expected credit losses.
During this process the probability of the non-payment of the trade
receivables is assessed on an individual receivable balance. This probability
is then multiplied by the amount of the expected loss arising from default to
determine the lifetime expected credit loss for the trade receivables. For
trade receivables, which are reported net, such provisions are recorded in a
separate provision account with the loss being recognised within cost of sales
in the consolidated statement of comprehensive income. On confirmation that
the trade receivable will not be collectable, the gross carrying value of the
asset is written off against the associated provision.
Impairment provisions for loans to associates and other parties are recognised
based on a forward-looking expected credit loss model. The methodology used to
determine the amount of the provision is based on whether there has been a
significant increase in credit risk since initial recognition of the financial
asset. For those where the credit risk has not increased significantly since
initial recognition of the financial asset, twelve month expected credit
losses along with gross interest income are recognised. For those for which
credit risk has increased significantly, lifetime expected credit losses along
with the gross interest income are recognised. For those that are determined
to be credit impaired, lifetime expected credit losses along with interest
income on a net basis are recognised.
Derivative financial instruments
Derivative financial instruments comprise option contracts to acquire
additional ordinary share capital of associates of the Group. Derivative
financial instruments are carried at fair value, with gains and losses arising
from changes in fair value taken directly to the statement of comprehensive
income. Fair values of derivatives are determined using valuation techniques,
including option pricing
models.
Financial liabilities
Trade and other payables are recognised initially at fair value and
subsequently carried at amortised cost.
Loans and other borrowings
Loans and other borrowings comprise the Group's bank loans including any bank
overdrafts. Loans and other borrowings are recognised initially at fair value
net of any directly attributable transaction costs. After initial recognition,
loans and other borrowings
are subsequently carried at amortised cost using the effective interest rate
method.
Leases
The Group leases a number of properties from which it operates and office
equipment. Rental contracts are typically made for fixed
periods of five to ten years, with break clauses negotiated for some of the
properties.
Contracts may contain both lease and non-lease components. The Group allocates
the consideration in the contract to the lease and non-lease components based
on their relative stand-alone prices.
Payments associated with short-term leases and leases of low value assets will
continue to be recognised on a straight-line basis as an expense in the
statement of comprehensive income.
Assets and liabilities arising from a lease are initially measured on a
present value basis. Lease liabilities include the net present value of the
following lease payments:
• fixed payments (including in-substance fixed payments), less any lease
incentives receivable;
• variable lease payments that are based on an index or a rate, initially
measured using the index or rate as at the commencement
date; and
• payments of penalties for terminating the lease, if the lease term
reflects the Group exercising that option.
Lease payments to be made under reasonably certain extension options are also
included in the measurement of the liability. The lease payments are
discounted using the interest rate implicit in the lease. If that rate cannot
be readily determined, which is generally the case for leases in the Group,
the Group's incremental borrowing rate is used, being the rate that the Group
would have to pay to borrow the funds necessary to obtain an asset of similar
value to the right of use asset in a similar economic environment with similar
terms, security and conditions.
To determine the incremental borrowing rate, the Group:
• where possible, uses recent third-party financing received by the
individual lessee as a starting point, adjusted to reflect changes
in financing conditions since third party financing was received;
• where it does not have recent third-party financing, the Group uses a
build-up approach that starts with a risk-free interest rate
adjusted for credit risk for leases held by the Group; and
• makes adjustments specific to the lease, e.g. term, country and security.
Right of use assets are measured at cost comprising the following:
• the amount of the initial measurement of lease liability,
• any lease payments made at or before the commencement date less any lease
incentives received, and
• any initial direct costs.
Right of use assets are depreciated over the shorter of the asset's useful
life and the lease term on a straight-line basis. The Group does not revalue
its land and buildings that are presented within property, plant and
equipment, and has chosen not to do so for the
right of use buildings held by the Group.
Variable lease payments
When the Group is exposed to potential future increases in variable lease
payments based on an index or rate, they are not included
in the lease liability until they take effect. When adjustments to lease
payments based on an index or rate take effect, the lease liability is
reassessed and adjusted against the right of use asset.
Extension and termination options
Termination options are included in a number of the leases across the Group.
These are used to maximise operational flexibility in terms of managing the
assets used in the Group's operations. The majority of termination options
held are exercisable only by the
Group and not by the respective lessor.
In determining the lease term, management considers all facts and
circumstances that create an economic incentive to exercise an extension
option, or not exercise a termination option. Extension options (or periods
after termination options) are only included in the lease term if the lease is
reasonably certain to be extended (or not terminated).
Remeasurement
The Group will remeasure a lease when there has been a contractual variation
that amends the scope or length of the lease or in cases where there is a
change in the Group's intention to exercise a break option or clause that
exists in the contract. The lease liability will be remeasured using the new
interest rate implicit in the lease or a revised incremental borrowing rate if
the interest rate
implicit in the lease isn't readily determined.
When the lease liability is remeasured, an equivalent adjustment is made to
the right of use asset unless its carrying amount is reduced to nil, in which
case any remaining amount is recognised within administrative expenses within
the consolidated statement of comprehensive income.
Business combinations and goodwill
Business combinations are accounted for using the acquisition method. The cost
of an acquisition is measured as the aggregate of the consideration
transferred, which is measured at the fair value on acquisition date, and the
amount of any non-controlling interests in the acquiree. For each business
combination, the Group elects whether to measure the noncontrolling interests
in the acquiree at fair value or at the proportionate share of the acquiree's
identifiable net assets. Acquisition-related costs are expensed
as incurred.
When the Group acquires a business, it assesses the financial assets and
liabilities assumed for appropriate classification and designation in
accordance with the contractual terms, economic circumstances and pertinent
conditions as at the acquisition date. This includes the separation of
embedded derivatives in host contracts by the acquiree.
Any contingent consideration to be transferred by the acquirer will be
recognised at fair value at the acquisition date. Contingent consideration
classified as equity is not remeasured and its subsequent settlement is
accounted for within equity. Contingent consideration classified as a
liability that is a financial instrument and within the scope of IFRS 9
Financial Instruments, is measured at fair value with the changes in fair
value recognised in the statement of profit or loss in accordance with IFRS 9.
Other contingent consideration that is not within the scope of IFRS 9 is
measured at fair value at each reporting date with changes in fair value
recognised in profit or loss.
Goodwill is initially measured at cost (being the excess of the aggregate of
the consideration transferred and the amount recognised for non-controlling
interests and any previous interest held over the net identifiable assets
acquired and liabilities assumed). If the fair value of the net assets
acquired is in excess of the aggregate consideration transferred, the Group
re-assesses whether it has correctly identified all of the assets acquired and
all of the liabilities assumed and reviews the procedures used to measure the
amounts to be recognised at the acquisition date. If the reassessment still
results in an excess of the fair value of net assets acquired over the
aggregate consideration transferred, then the gain is recognised in the
consolidated statement of comprehensive
After initial recognition, goodwill is measured at cost less any accumulated
impairment losses. For the purpose of assessing impairment, assets are grouped
at the lowest levels for which there are separately identifiable cash inflows
which are largely independent of the cash inflows from other assets or groups
of assets (cash-generating units).
Goodwill is capitalised as an intangible asset with any impairment in carrying
value being charged to the consolidated statement of comprehensive income.
Where the fair value of identifiable assets, liabilities and contingent
liabilities exceed the fair value of consideration paid, the excess is
credited in full to the consolidated statement of comprehensive income on the
acquisition date.
Where goodwill has been allocated to the Group's cash-generating units and
part of the operation within the unit is disposed of, the goodwill associated
with the disposed operation is included in the carrying amount of the
operation when determining the gain or loss on disposal. Goodwill disposed in
these circumstances is measured based on the relative values of the disposed
operation and the portion of the cash generating unit retained.
If the business combination is achieved in stages, the acquisition date
carrying value of the acquirer's previously held equity interest in the
acquiree is remeasured to fair value at the subsequent acquisition date. Any
gains or losses arising from such remeasurement are recognised in profit or
loss.
Where a business combination is for less than the entire issued share capital
of the acquiree and there is an option for the acquirer to purchase the
remainder of the issued share capital of the business and/or for the vendor to
sell the rest of the entire issued share capital of the business to the
acquirer, then the acquirer will assess whether a non-controlling interest
exists and also whether the instrument(s) fall within the scope of IFRS 9
Financial Instruments and is/are measured at fair value with the changes in
fair value recognised in the statement of profit or loss in accordance with
IFRS 9.
Options that are not within the scope of IFRS 9 and are linked to service will
be accounted for under IAS 19 Employee Benefits and/or IFRS 2 Share-based
Payments as appropriate.
IFRS 3 prohibits the recognition of contingent assets acquired in a business
combination. No contingent assets are recognised by the Group in business
combinations even if it is virtually certain that they will become
unconditional or non-contingent.
Provisions
A provision is recognised in the statement of financial position when the
Group has a present legal or constructive obligation as a
result of a past event, and it is probable that an outflow of economic
benefits will be required to settle the obligation.
Share capital
Financial instruments issued by the Group are treated as equity only to the
extent that they do not meet the definition of a financial
liability. The Company's ordinary shares are classified as equity instruments.
Incremental costs directly attributable to the issue of new shares are shown
in share premium as a deduction from the proceeds.
Revenue
The Group recognises revenue from the following main sources:
• Mortgage procuration fees paid to the Group by lenders either via the
L&G Mortgage Club or directly.
• Insurance commissions from advised sales of protection and general
insurance policies.
• Client fees paid by the underlying customer for the provision of advice on
mortgages, other loans and protection.
• Other Income comprising income from services provided to directly
authorised entities, fees in relation to Later Life lending and
Wealth and ancillary services such as conveyancing and surveying.
Mortgage procuration fees, insurance commissions and client fees are included
at the amounts received by the Group in respect of all services provided. The
Group operates a revenue share model with its trading partners and therefore
commissions are paid in line with the Group revenue recognition policy and are
included in cost of sales.
Mortgage procuration fees are recognised at a point in time when commission is
approved for payment by the L&G Mortgage Club or direct from the lender,
which is the point at which all performance obligations have been met as a
contract has been arranged by a broker between the lender and the customer.
Insurance commissions are recognised at a point in time when a policy is
agreed upon and accepted by both the customer and the insurer. Life insurance
commissions are typically paid on an indemnity basis, spread over a four-year
period. If a policy is cancelled within this indemnity period, a portion of
the commission received will be subject to repayment to the provider.
A clawback liability is recognised for the expected level of commissions
repayable with the liability movement recognised as an
offset against revenue recognised in the period. More information on the
clawback liability is included in note 2.1(b).
Client fees and Other income are recognised at a point in time when payment is
received or when receipt is guaranteed. This ensures recognition only when it
is certain that the performance obligation has been satisfied.
Taxation
Income tax comprises current and deferred tax. Income tax is recognised in the
consolidated statement of comprehensive income.
Other than if it relates to items recognised directly in equity in which case
it is also recognised directly in equity.
Current tax is the expected tax payable on the taxable income for the year
using tax rates enacted or substantively enacted by the statement of financial
position date and any adjustment to tax payable in respect of previous years.
Deferred tax is provided using the liability method on temporary differences
between the tax bases of assets and liabilities and their carrying amounts for
financial reporting purposes at the reporting date.
Deferred tax assets and liabilities are recognised for all taxable temporary
differences, except for when:
• The difference arises from the initial recognition of goodwill or an asset
or liability in a transaction that is not a business
combination and, at the time of the transaction, affects neither the
accounting profit nor taxable profit or loss.
• In respect of deductible temporary differences associated with
investments in subsidiaries, associates and interests in joint arrangements,
deferred tax assets are recognised only to the extent that it is probable that
the temporary differences will reverse in
the foreseeable future and taxable profit will be available against which the
temporary differences can be utilised.
The carrying amount of deferred tax assets is reviewed at each reporting date
and reduced to the extent that it is no longer probable that enough taxable
profit will be available to allow all or part of the deferred tax asset to be
utilised. Unrecognised deferred tax assets are re-assessed at each reporting
date and are recognised to the extent that it has become probable that future
taxable profits will allow the deferred tax asset to be recovered.
Deferred tax assets and liabilities are measured at the tax rates that are
expected to apply in the year when the asset is realised or the liability is
settled, based on tax rates (and tax laws) that have been enacted or
substantively enacted at the reporting date.
Deferred tax relating to items recognised outside profit or loss is recognised
outside profit or loss. Deferred tax items are recognised in correlation to
the underlying transaction either in OCI or directly in equity.
Tax benefits acquired as part of a business combination, but not satisfying
the criteria for separate recognition at that date, are recognised
subsequently if new information about facts and circumstances change. The
adjustment is either treated as a reduction in goodwill (as long as it does
not exceed goodwill) if it was incurred during the measurement period or
recognised in profit or loss.
Deferred tax assets and liabilities are offset when the Group has a legally
enforceable right to offset current tax assets and liabilities and the
deferred tax assets and liabilities relate to taxes levied by the same tax
authority on either:
• the same taxable Group company; or
• different company entities which intend either to settle current tax
assets and liabilities on a net basis, or to realise the assets and
settle the liabilities simultaneously, in each future period in which
significant amounts of deferred tax assets and liabilities are expected to be
settled or recovered.
Segment reporting
An operating segment is a distinguishable segment of an entity that engages in
business activities from which it may earn revenues and incur expenses and
whose operating results are reviewed regularly by the entity's chief operating
decision maker (CODM). The Board reviews the Group's operations and financial
position as a whole and therefore considers that it has only one operating
segment, being the provision of financial services operating solely within the
UK. The information presented to the CODM directly reflects that presented in
the financial statements and they review the performance of the Group by
reference to the results of the
operating segment against budget.
Operating profit is the profit measure, as disclosed on the face of the
consolidated statement of comprehensive income, that is reviewed by the CODM.
During the period to 31 December 2024, there have been no changes from the
prior year in the measurement methods used to determine operating segments and
reported segment profit or loss.
Dividends
Dividends are recognised when they become legally payable. In the case of
interim dividends to equity shareholders, this is when
they are paid. In the case of final dividends, this is when they are approved
by the shareholders.
Share-based payments
(a) Equity -settled transactions
Where equity-settled share options are awarded to employees, the fair value of
the options at the date of grant is charged to the statement of comprehensive
income over the vesting period. Non-market vesting conditions are taken into
account by adjusting the number of equity instruments expected to vest at each
reporting date so that, ultimately, the cumulative amount recognised over the
vesting period is based on the number of options that eventually vest.
Non-vesting conditions and market vesting conditions are factored into the
fair value of the options granted. As long as all other vesting conditions are
satisfied, a charge is made irrespective of whether the market vesting
conditions are satisfied. The cumulative expense is not adjusted for failure
to achieve a market vesting
condition or where a non-vesting condition has been satisfied.
Where the terms and conditions of options are modified before they vest, the
increase in the fair value of the options, measured immediately before and
after the modification, is also charged to the statement of comprehensive
income over the remaining vesting period.
Where the terms and conditions of options are modified before they vest, the
increase in the fair value of the options, measured immediately before and
after the modification, is also charged to the statement of comprehensive
income over the remaining vesting period.
(b) Acquisition related Cash-settled transactions
A liability is recognised for the fair value of cash-settled transactions. The
fair value is measured initially at the date of the grant and is subsequently
remeasured at each reporting date up to and including the settlement date. The
fair value is expensed over the period until the vesting date with a
corresponding increase in liabilities. The fair value is determined using a
discounted net present value model, with estimates over service and
performance conditions updated to reflect management's best estimate of the
awards
expected to vest at each reporting date.
2 Accounting estimates and judgements
2.1 Critical accounting estimates and judgements
The preparation of the financial statements requires estimates and assumptions
to be made that affect the reported values of assets, liabilities, revenues
and expenses. Estimates and underlying assumptions are reviewed on an ongoing
basis. Revisions to accounting estimates are recognised in the year in which
the estimate is revised and in any future years affected. In applying the
Group's accounting policies described above, the directors have identified
that the following areas are the key estimates that have a
significant risk of resulting in a material adjustment to the carrying value
of assets and liabilities in the next financial year.
(a) Fair value of put and call options in connection with acquisitions
When the Group makes an acquisition of less than 100% of the entire issued
share capital of an entity, in certain cases it has entered into a put and
call option agreement to acquire the remaining share capital of that entity
after a certain amount of time. The fair value of the put and call option will
need to be determined in accounting for the instrument which involves certain
estimates regarding the future financial performance of the entity, including
EBITDA or profit before tax. The fair value of the options are
recognised as either a Redemption Liability (see Note 5) or within accruals
(see Note 18).
The carrying value of the liabilities relating to acquisition options,
recorded within Note 18 under accruals, are as follows:
2024 2023
IAS19 Service IFRS2 Option IFRS2 Option
Charge Charge Accrual IAS19 Service Charge Accrual Charge Accrual
Accrual
£'000 £'000 £'000 £'000
First Mortgage Direct Ltd - - 1,925 -
Project Finland Topco Ltd - 1,055 - 441
Aux Group Ltd - 289 - 138
Total - 1,344 1,925 579
Where amounts payable on exercise of the option are contingent upon continued
employment, it is treated as remuneration accounted for under IFRS2 or IAS19.
Any non-contingent element is treated as consideration and accounted for under
IAS 32.
The sensitivity of the fair values to changes in the key assumptions are as
follows:
Increase in
Base assumption liability
Assumption Change in base assumption £m
Relevant financial performance metric - IFRS 2 option accrual Various +20.0% (proportionate) 0.7
Relevant financial performance metric - Redemption liability Various +20.0% (proportionate) 0.8
(b) Clawback liability
The liability relates to the estimated value and timing of repaying commission
received up front on protection policies that may lapse in a period of up to
four years following inception. The liability balance is calculated using a
model that has been developed over several years. The model uses a number of
factors including the total 'unearned' commission (i.e. that could still be
subject to clawback) at the point of calculation, the age profile of the
commission received, estimates of future lapse rates, and the success of
the Appointed Representatives in preventing lapses and/or generating new
income at the point of a lapse.
The key uncertainties in the calculation are driven by lapse rates and
recovery rates. A 0.5% change (absolute) in lapse rates causes a £0.4m change
in the liability. A 2% change (absolute) in the recoveries rate causes a
£0.3m change in the liability. More information is included in note 21.
(c) Impairment of Goodwill
For the purposes of impairment testing Goodwill is grouped at the lowest
levels for which there are separately identifiable cash inflows which are
largely independent of the cash inflows from other assets or groups of assets
(cash-generating units) with impairment test undertaken at least annually at
the financial year end or whenever events or changes in circumstances indicate
that their carrying amount may not be recoverable. Other intangible assets are
tested for impairment whenever events or changes in circumstances indicate
that the carrying amount may not be recoverable. The recoverable amount of the
assets is the higher of an
asset's or CGU's fair value less cost of disposal and its value in use.
Value in use calculations are utilised to calculate recoverable amounts of a
CGU. Value in use is calculated as the net present value of the projected
pre-tax cash flows of the CGU in which the relationships, technology and brand
is contained. The net present value of cash flows is calculated by applying a
pre-tax discount rate that reflects current market assessments of the time
value of money and the risks specific to that asset.
The key assumptions used in respect of value in use calculations are those
regarding growth rates and anticipated changes to revenues and expenses during
the period covered by the calculations. Changes to revenue and expenses are
based upon management's expectation and actual outcomes may vary. Forecast
cash flows are derived from the Group's forecast model, extrapolated for
future years, and assume a terminal growth rate of 2.5% (2023: 3.5%), which
management considers reasonable given the Group's historic growth rates and
its market share growth model.
The Group is required to test, on an annual basis, whether goodwill has
suffered any impairment. The recoverable amount is determined based on value
in use calculations. The use of this method requires the estimation of future
cash flows and the choice of a discount rate in order to calculate the present
value of the cash flows. Actual outcomes may vary. More information including
carrying values is included in note 14.
2.2 Other Accounting Estimates and Judgements
The preparation of the financial statements requires estimates and assumptions
to be made that affect the reported values of assets, liabilities, revenues
and expenses. Estimates and underlying assumptions are reviewed on an ongoing
basis. Revisions to accounting estimates are recognised in the year in which
the estimate is revised and in any future years affected. In applying the
Group's accounting policies described above, the directors have identified
that the following areas that are deemed as significant to
the understanding of the financial statements but are not materially
subjective to management assumptions.
(a) Impairment of other intangibles
For the purposes of impairment testing other intangible assets are grouped at
the lowest levels for which there are separately identifiable cash inflows
which are largely independent of the cash inflows from other assets or groups
of assets (cash-generating units). Other intangible assets are tested for
impairment whenever events or changes in circumstances indicate that the
carrying amount may not be recoverable. The recoverable amount of the assets
is the higher of an asset's or CGU's fair value less cost of
disposal and its value in use.
Value in use calculations are utilised to calculate recoverable amounts of a
CGU. Value in use is calculated as the net present value of the projected
pre-tax cash flows of the CGU in which the relationships, technology and brand
is contained. The net present value of cash flows is calculated by applying a
pre-tax discount rate that reflects current market assessments of the time
value of money and the risks specific to that asset. The use of this method
requires the estimation of future cash flows and the choice of a discount rate
in order to calculate the present value of the cash flows with the actual
outcomes likely to vary.
The key assumptions used in respect of value in use calculations are those
regarding growth rates and anticipated changes to revenues and expenses during
the period covered by the calculations. Changes to revenue and expenses are
based upon management's expectation and actual outcomes may vary. Forecast
cash flows are derived from the Group's forecast model, extrapolated for
future years, and assume a terminal growth rate of 2.5% (2023: 3.5%), which
management considers reasonable given the Group's historic growth rates and
its market share growth model.
(b) Investments in associates
The Group is required to consider whether any investments in associates have
suffered any impairment.
The Group uses two methods to test for impairment:
• Net Present Value of the next 5 year's projected free cash flow and
terminal value; and
• Valuation of business on a multiple basis.
The use of both methods requires the estimation of future cash flows, future
profit before tax and choice of discount rate. Actual outcomes may vary. Where
the carrying amount in the consolidated statement of financial position is in
excess of the estimated value, the Group will make an impairment charge
against the investment value and charge this amount to the consolidated
statement of comprehensive income under impairment and amount written off
associates.
(c) Share options and Deferred Tax
Under the Group's equity-settled share-based remuneration schemes (see note
27), estimates are made in assessing the fair value of options granted. The
fair value is spread over the vesting period in accordance with IFRS 2. The
Group engages an external expert in assessing fair value, both Black-Scholes
and Stochastic models are used, and estimates are made as to the Group's
expected
dividend yield and the expected volatility of the Group's share price.
Deferred tax assets include temporary timing differences related to the issue
and exercise of share options. Recognition of the deferred tax assets assigns
an estimate of the proportion of options likely to vest and an estimate of
share price at vesting. The carrying amount of deferred tax assets relating to
share options as at 31 December 2024 was £0.9m (2023: £1.4m). This has been
presented net of other Group deferred tax liabilities in the consolidated
statement of financial position.
3 Revenue
The Group operates in one segment being that of the provision of financial
services in the UK. Revenue is derived as follows:
2024 2023
£'000 £'000
Mortgage procuration fees 105,760 98,033
Protection and general insurance commission 104,737 93,144
Client fees 51,180 43,325
Other income 4,860 5,031
266,537 239,533
4 Cost of sales
Costs of sales are as follows:
2024 2023
£'000 £'000
Commissions paid 145,668 130,934
Fluent affinity partner payments 15,466 14,481
Movement in provision for impairment of trade receivables (118) (22)
Other cost of sales 1,298 1,214
Wages and salary costs 22,322 22,764
184,636 169,371
5 Acquisition related costs, acquisition of non-controlling interests and
redemption liability
First Mortgage Direct Limited (First Mortgage)
Put and call option
On 29 May 2024 Mortgage Advice Bureau Limited exercised its option to purchase
the remaining 20% stake in First Mortgage for
£9.3m. This was funded through £2.3m of cash consideration and a £7.0m
equity share issue by the parent entity, Mortgage Advice Bureau (Holdings)
plc. The £7.0m equity share issue resulted in clearing £2.7m of accumulated
non-controlling interest, a reduction in retained earning of £1.7m and a
transfer of £2.5m from the share option reserve. The option was accounted for
under IAS 19 Employee Benefits and IFRS 2 Share-based Payments due to its link
to the service of First Mortgage's Managing Director.
The costs relating to this acquisition for the period are made up as follows:
2024 2023
£'000 £'000
Amortisation of acquired intangible assets 367 367
Option costs (IAS 19) 412 448
Option costs (IFRS 2) 512 409
Acquisition related costs 47 -
Total costs 1,338 1,224
The Fluent Money Group Limited (Fluent)
Deferred payments to non controlling interests
On 19 December 2023, Mortgage Advice Bureau Ltd acquired 8.1% of the ordinary
share capital of Project Finland Topco Limited for
£1,991,616 taking its shareholding to 84.3%. Half of the payment was made in
2023 and a further £498,000 was paid in December 2024. £249,000 has been
included within cash flows used in operating activities and £249,000 as cash
flows used in financing activities. The remaining deferred consideration of
£498,000 is expected to be paid in December 2025 and is included in accruals
within trade and other payables.
Put and call options
There is a put and call option over the remaining 15.7% of the issued share
capital of Fluent which has been accounted for under IAS 32 Financial
Instruments and IFRS 2 Share-based Payments, as respectively a proportion is
treated as consideration under IAS 32, with the balance treated as
remuneration under IFRS 2, because the amount payable on exercise of the
option consists of a non- contingent element, and an element that is
contingent upon continued employment of the option holders within the Group.
The proportion accounted for under IAS 32 has been recognised as a redemption
liability. There is also a put and call option over certain growth shares that
have been issued to Fluent's wider management team that has been accounted for
under IFRS 2 Share-based
Payments as exercise is solely contingent upon continued employment.
The costs relating to this acquisition for the period are made up as follow:
2024 2023
£'000 £'000
Amortisation of acquired intangible assets 4,399 4,399
Option costs (IFRS 2) 1,657 3,289
Redemption liability remeasurement (IAS 32) 569 (4,649)
Unwinding of redemption liability 539 1,123
Acquisition related costs 42 159
Total costs 7,206 4,321
Vita Financial Limited (Vita)
The costs relating to this acquisition for the period are made up as follow:
2024 2023
£'000 £'000
Amortisation of acquired intangible 65
assets
65
Acquisition related -
costs
-
Total 65
costs
65
Aux Group Limited (Auxilium)
Put and call options
There is a put and call option over the remaining 25% of the issued share
capital of Auxilium which has been accounted for under IAS 32 Financial
Instruments and IFRS 2 Share-based Payments, as respectively a proportion is
treated as consideration under IAS 32, with the balance treated as
remuneration under IFRS 2 because the amount payable on exercise of the option
consists of a non- contingent element, and an element that is contingent upon
continued employment of the option holder within the Group. The
proportion accounted for under IAS 32 has been recognised as a redemption
liability.
The costs relating to this acquisition for the period are made up as follow:
2024 2023
£'000 £'000
Amortisation of acquired intangible assets 329 329
Option costs (IFRS 2) 151 131
Redemption liability remeasurement (IAS 32) (18) 163
Unwinding of redemption liability 87 60
Acquisition related costs - -
Total costs 549 683
Redemption liability
At 31 December 2024, the expected cash flows relating to the redemption
liability were remeasured resulting in a loss of £0.6m
included within the consolidated statement of comprehensive income. £0.6m has
been included within finance expenses relating to the unwinding of the
redemption liability from the end of the prior year.
Carrying value of redemption liability 31 December 2024 31 December 2023
Fluent Auxilium Total Fluent Auxilium Total
£'000 £'000 £'000 £'000 £'000 £'000
Balance as at 1 January 2,402 391 2,793 7,018 168 7,186
Purchase of additional non-controlling - - - (1,090) - (1,090)
interest in Fluent
Loss/(Gain) on remeasurement 569 (18) 551 (4,649) 163 (4,486)
Unwinding of redemption liability 539 87 626 1,123 60 1,183
Balance as at 31 December 3,510 460 3,970 2,402 391 2,793
Total acquisition costs
The total costs relating to the four acquisitions above that are included in
the consolidated statement of comprehensive income are
as follows:
2024 2023
£'000 £'000
Amortisation of acquired intangible assets 5,160 5,160
Option costs (IFRS 2 and IAS 19) 2,732 4,277
Acquisition related costs 89 159
Loss/(Gain) on remeasurement of redemption liability 551 (4,486)
Unwinding of redemption liability 626 1,183
Total costs 9,158 6,293
Total cashflows relating to purchases of non-controlling interests
The total amounts included in the consolidated statement of cash flows
relating to the purchase of non-controlling interests are as
follows:
2024 2023
£'000 £'000
First Mortgage - exercise of option (operating activities) 2,336 -
Fluent - deferred consideration (operating activities) 249 592
Fluent - deferred consideration (financing activities) 249 593
Total Cashflows 2,834 1,185
6 Operating profit
Operating profit is stated after the following items:
2024 2023
Note £'000 £'000
Depreciation of property, plant and equipment 12 1,133 1,225
Depreciation of right of use assets 13 718 857
Impairment of right of use assets 13 - 428
Amortisation of acquired intangible assets 5 5,160 5,160
Amortisation of other intangible assets 14 547 310
Costs related to acquisition options 5 2,732 4,277
Cost related to acquisitions 5 89 159
Costs related to restructuring - 539
(Gain)/Loss of fair value measurement of derivative financial instruments 15 (21) 190
Profits from associates are disclosed as part of the operating profit as this
is the operational nature of the Group.
2024 2023
Note £'000 £'000
Auditor remuneration:
Fees payable to the Group's auditor for the audit of the Group's financial
statements 820 571
Fees payable to the Group's auditor and its associates for other services:
Audit of the accounts of subsidiaries 121 66
Audit-related assurance services 145 133
7 Staff costs
Staff costs, including executive and non-executive Directors' remuneration, are as follows:
2024 2023
£'000 £'000
Wages and salaries 46,434 43,186
Share-based payments (see note 27) 2,552 4,429
Social security costs 5,168 4,627
Defined contribution pension costs 1,426 1,750
Other employee benefits 664 738
Total staff remuneration 56,244 54,730
Capitalised staff costs 1,912 433
Staff costs included in the consolidated statement of comprehensive income 54,332 54,297
Staff costs are included in the consolidated statement of comprehensive income
as follows:
2024 2023
£'000 £'000
Cost of sales (see note 22,764
4)
22,322
Administrative 31,477
expenses
32,010
54,332 54,241
The average number of people employed by the Group during the year was:
2024 2023
Number Number
Executive Directors 3 3
Advisers 247 285
Compliance 101 106
Sales and marketing 98 110
Operations 487 497
936 1,001
Key management compensation
Key management are those persons having authority and responsibility for
planning, directing and controlling the activities of the
Group, which are the Directors of Mortgage Advice Bureau (Holdings) plc.
2024 2023
£'000 £'000
Wages and salaries 2,235 1,387
Share-based payments (58) 159
Social security costs 335 181
Defined contribution pension costs 14 11
Other employment benefits 6 4
2,632 1,742
During the year retirement benefits were accruing to 3 Directors (2023: 2) in
respect of defined contribution pension schemes.
The total amount payable to the highest paid Director in respect of emoluments
was £1,015,000 (2023: £858,000).
The value of the Group's contributions paid to a defined contribution pension
scheme in respect of the highest paid Director
amounted to £nil (2023: £nil).
8 Finance income and expense
2024 2023
Finance Income £'000 £'000
Interest income on cash balances 158 51
Interest income on loans to franchises 427 240
585 291
Finance expenses
Interest expense 1,199 1,320
Interest expense on lease liabilities 68 107
1,267 1,427
The interest expense mainly relates to the term loan and revolving credit
facility (see note 19)
9 Income tax
The Group calculates the period income tax expense using the tax rate that
would be applicable to the expected total annual earnings. The major
components of income tax expense in the consolidated statement of
comprehensive income are:
2024 2023
Current tax expense £'000 £'000
UK corporation tax charge on profit for the period 6,809 5,434
Total current tax 6,809 5,434
Deferred tax expense
Origination and reversal of timing differences (48) (1,766)
Temporary difference on share-based payments 43 51
Effect of changes in tax rates - -
Total deferred tax (see note 23) (5) (1,715)
Total tax expense 6,804 3,719
The reasons for the difference between the actual charge for the year and the
standard rate of corporation tax in the United Kingdom
of 25% (2023: 23.52%) applied to profit for the year is as follows:
2024 2023
£'000 £'000
Profit for the year before tax 22,886 16,178
Expected tax charge based on corporation tax rate 5,722 3,805
Expenses not deductible for tax purposes 145 115
Research & development 43 (48)
Share option differences 713 1,010
Deferred tax balances not previously recognised 192 -
Other differences 6 12
Fair value (gain)/loss on derivative financial instruments (5) 45
Redemption liability movements 294 (777)
Profits from associates (329) (199)
Fixed asset differences - (207)
Short term timing differences - (22)
Utilisation of brought forward tax losses 23 (22)
Adjustments to prior years - 7
Total tax expense 6,804 3,719
Options exercised during the period resulted in a current tax credit of
£0.01m (2023: £0.1m) recognised directly in equity relating to the current
tax deduction in excess of the cumulative share-based payment expense relating
to these options.
For the year ended 31 December 2024 the deferred tax charge relating to
unexercised share options recognised in equity was £0.4m (2023: £0.4m
credit).
The standard rate of corporation tax for the period was 25% (2023: 23.52%) and
the rate at which deferred tax has been provided is 25% (2023: 25%)
10 Earnings per share
Basic earnings per share are calculated by dividing net profit for the year
attributable to ordinary equity holders of the Company by the weighted average
number of ordinary shares outstanding during the period.
Basic earnings per share 2024 2023
Profit for the period attributable to the owners of the parent (£'000) 15,896 13,467
Weighted average number of shares in issue 57,608,464 57,090,793
Basic earnings per share (in pence per share) 27.6 23.6
For diluted earnings per share, the weighted average number of ordinary shares
in existence is adjusted to include potential ordinary shares arising from
share options.
Diluted earnings per share 2024 2023
Profit for the period attributable to the owners of the parent (£'000) 15,896 13,467
Weighted average number of shares in issue 57,994,127 57,434,053
Diluted earnings per share (in pence per share) 27.4 23.5
The share data used in the basic and diluted earnings per share computations
are as follows:
Weighted average number of ordinary shares 2024 2023
Issued ordinary shares at the start of the year 57,127,034 57,030,995
Effect of shares issued during the period 481,430 59,798
Basic weighted average number of shares 57,608,464 57,090,793
Potential ordinary shares arising from options 385,663 343,260
Diluted weighted average number of shares 57,994,127 57,434,053
The reconciliation between the basic and adjusted figures is as follows:
2024 2023 2024 2023
Basic Basic Diluted Diluted
2024 2023 earnings earnings earnings earnings
£'000 £'000 pence pence pence pence
Profit for the period 15,896 13,467 27.6 23.6 27.4 23.5
Adjustments:
Assets 4,263 3,575 7.4 6.3 7.4 6.2
Costs relating to the First Mortgage, 2,434 3,477 4.2 6.1 4.2 6.1
Fluent and Auxilium options
Costs relating to Fluent and Auxilium 89 159 0.2 0.3 0.2 0.3
acquisitions
Loss on derivative financial instruments (21) 190 - 0.3 - 0.3
Restructuring costs - 412 - 0.7 - 0.7
Remeasurement and unwinding of 1,177 (3,303) 2.0 (5.8) 2.0 (5.8)
redemption liabilities
Tax effect of adjustments (1,089) (966) (1.9) (1.7) (2.0) (1.7)
Adjusted earnings 22,749 17,012 39.5 29.8 39.2 29.6
Software capex spend (1,406) - (2.4) - (2.4) -
Software capex amortisation 128 - 0.2 - 0.2 -
Tax effect of software capex 319 - 0.5 - 0.6 -
Adjusted earnings (exc. software 21,791 17,012 37.8 29.8 37.6 29.6
capex)
The tax effect of adjustments used is based on the standard rate of
corporation tax in the United Kingdom of 25% (2023: 23.52%) for any items that
are subject to tax.
The adjusted earnings (pre Software Capex spend) removes the impact of the
Software Capex spend capitalised during the year.
The Group uses adjusted results as key performance indicators, as the
Directors believe that these provide a more consistent measure of operating
performance. Adjusted earnings is therefore stated before one-off acquisition
costs and one-off restructuring costs, ongoing non-cash items relating to the
acquisitions of First Mortgage, Fluent and Auxilium, fair value gains on
financial instruments relating to options to increase shareholding in
associate businesses and impairment of loans to related parties, net of tax.
11 Dividends
2024 2023
£'000 £'000
Dividends paid and declared on ordinary shares during the period:
Final dividend for 2023: 14.7p per share (2022: 14.7p) 8,401 8,384
Interim dividend for 2024: 13.4p per share (2023: 13.4p) 7,766 7,654
16,167 16,038
Equity dividends on ordinary shares:
Proposed for approval by shareholders at the AGM:
Final dividend 2024: 14.8p per share (2023: 14.7p) 8,578 8,398
8,578 8,398
The record date for the final dividend is 25 April 2025 and the payment date
is 27 May 2025. The ex-dividend date will be 24 April 2025. The Company
statement of changes in equity shows that the Company had positive reserves as
at 31 December 2024 of
£4.7m. There are sufficient distributable reserves in subsidiary companies to
pass up to Mortgage Advice Bureau (Holdings) plc in order to pay the proposed
final dividend. The proposed final dividend for 2024 has not been provided for
in these financial statements, as it has not yet been approved for payment by
shareholders.
12 Property, plant and equipment
Freehold land and buildings Fixture & fittings Computer equipment
Total
£'000 £'000 £'000 £'000
Cost
As at 1 January 2024 2,536 4,161 1,650 8,347
Additions - 100 281 381
Disposals - - (172) (172)
As at 31 December 2024 2,536 4,261 1,759 8,556
Accumulated Depreciation
As at 1 January 2024 461 1,050 1,037 2,548
Charge for the year 57 662 414 1,133
Disposals - - (172) (172)
As at 31 December 2024 518 1,712 1,279 3,509
Net book value as at 31 December 2024 2,018 2,549 480 5,047
Freehold land Fixture & Computer
and buildings fittings equipment Total
£'000 £'000 £'000 £'000
Cost
As at 1 January 2023 2,536 3,681 1,515 7,732
Additions - 535 397 932
Disposals - (55) (262) (317)
As at 31 December 2023 2,536 4,161 1,650 8,347
Accumulated Depreciation
As at 1 January 2023 407 404 793 1,604
Charge for the year 54 666 505 1,225
Disposals - (20) (261) (281)
As at 31 December 2023 461 1,050 1,037 2,548
Net book value as at 31 December 2023 2,075 3,111 613 5,799
Net book value as at 31 December 2022 2,129 3,277 722 6,128
During the year proceeds from the disposal of assets totalling £4,000 were
received over and above the carrying value (2023: £nil)
13 Right of use assets and Lease liabilities
This note provides information for leases where the Group is a lessee. The
consolidated statement of financial position shows the
following amounts on leases:
Land and Office
Right of use assets buildings equipment Vehicles Total
£'000 £'000 £'000 £'000
As at 1 January 2024 2,186 97 - 2,283
Additions - - 149 149
Remeasurement 2,246 - - 2,246
Depreciation (670) (35) (13) (718)
As at 31 December 2024 3,762 62 136 3,960
During the year direct costs of £45,000 relating to the remeasurement of
right of use assets were incurred.
Lease Liabilities Land and Office
buildings equipment Vehicles Total
£'000 £'000 £'000 £'000
As at 1 January 2024 2,634 102 - 2,736
Additions - - 149 149
Remeasurement 2,200 - - 2,200
Interest expense 63 3 2 68
Lease payments (880) (39) (14) (933)
As at 31 December 2024 4,017 66 137 4,220
Land and Office
Right of use assets buildings equipment Total
£'000 £'000 £'000
As at 1 January 2023 3,747 125 3,872
Additions - 13 13
Remeasurement (317) - (317)
Impairment (423) (5) (428)
Depreciation (821) (36) (857)
As at 31 December 2023 2,186 97 2,283
Lease Liabilities Land and Office
buildings equipment Total
£'000 £'000 £'000
As at 1 January 2023 3,822 125 3,947
Additions - 13 13
Remeasurement (317) - (317)
Interest expense 102 5 107
Lease payments (973) (41) (1,014)
As at 31 December 2023 2,634 102 2,736
The present value of lease liabilities is as follows:
Within 1 year 1-2 years 2-5 years After 5 years Total
31 December 2024 £'000 £'000 £'000 £'000 £'000
Lease payments (undiscounted) 1,098 794 1,743 1,962 5,597
Finance charges (255) (210) (490) (422) (1,377)
Net present values 843 584 1253 1,540 4,220
Within 1 year 1-2 years 2-5 years After 5 years Total
31 December 2023 £'000 £'000 £'000 £'000 £'000
Lease payments (undiscounted) 997 792 1,005 81 2,875
Finance charges (66) (37) (36) - (139)
Net present values 931 755 969 81 2,736
The following amounts are included in the consolidated statement of
comprehensive income relating to leases:
2024 2023
£'000 £'000
Depreciation of right of use assets 718 857
Impairment of right of use assets - 427
Interest expense 68 107
Short term lease expense 7 79
Low value lease expense 2 2
The total cash flow for leases during the period was £0.9m (2023: £1.0m)
Extension and termination options
During the prior year, a break clause was exercised on one property. This
resulted in a remeasurement of the associated lease liability of £317,000. An
impairment assessment of the impacted right of use asset resulted in an
impairment of £428,000 recognised in the consolidated statement of
comprehensive income.
As at 31 December 2024, the carrying amounts of all other lease liabilities
are not reduced by the amount of payments that would be avoided from
exercising a break clause because it was considered reasonably certain that
the Group would not exercise its right to break the lease. Total lease
payments of £1,713,500 (2023: £85,000) are potentially avoidable were the
Group to exercise break clauses at the earliest opportunity.
14 Intangible assets
Goodwill and identified intangible assets arising on acquisitions are
allocated to the cash-generating unit of that acquisition. The
Board considers that the Group has only one operating segment and now has five
cash-generating units (CGUs). The goodwill relates to the following
acquisitions:
• Talk Limited in 2012, and in particular its main operating subsidiary
Mortgage Talk Limited (Mortgage Talk)
• First Mortgage Direct Limited (First Mortgage) in 2019
• Project Finland Topco Limited (Fluent) in 2022
• Vita Financial Limited (Vita) in 2022
• Aux Group Limited, and in particular its main operating subsidiary
Auxilium Partnership Limited (Auxilium) in 2022
2024 2023
Goodwill £'000 £'000
Cost
As at 1 January and 31 December 54,038 54,038
Accumulated impairment
As at 1 January and 31 December 153 153
Net book value
As at 1 January and 31 December 53,885 53,885
Where the goodwill allocated to the CGU is significant in comparison with the
entity's total carrying amount of goodwill this is set out
below:
Mortgage
Talk First Mortgage Fluent Other (1) Total
Goodwill £'000 £'000 £'000 £'000 £'000
Cost
As at 1 January and 31 December 2024 4,267 11,041 36,974 1,756 54,038
Accumulated impairment
As at 1 January and 31 December 2024 153 - - - 153
Net book value
As at 1 January and 31 December 2024 4,114 11,041 36,974 1,756 53,885
(1) 'Other' companies comprises Vita and Auxilium
Goodwill is deemed to have an indefinite useful life. Under IAS 36,
"Impairment of assets", the Group is required to review and test its goodwill
for impairment annually or in the event of a significant change in
circumstances. The impairment reviews conducted at the end of 2024 concluded
that there had been no impairment of goodwill.
The key assumptions set out below and used in respect of value in use
calculations are those regarding growth rates and anticipated changes to
revenues and costs during the period covered by the calculations, based upon
management's expectations, with the discount rates reflecting current market
assessments of the time value of money and the risks specific to these assets,
based on the Group's WACC. Revenue growth is based on past performance and
management's expectation of growth rates in the markets in which it operates,
and forecast costs are based on management's expectations of changes to the
current structure of each CGU. The terminal value growth rate of 2.5% (2023:
3.5%) reflects the Group's market share growth model.
Goodwill arose on the acquisition of Mortgage Talk Limited and has since been
allocated to the CGU of the Group as it existed prior to the impact of the
subsequent four acquisitions listed above. Impairment testing for this CGU is
carried out by determining recoverable amount on the basis of value in use,
which is then compared to the carrying value of the assets of the CGU
including goodwill. The value in use that has been determined exceeds the
£4.1m (2023: £4.1m) carrying value of goodwill for this CGU and therefore no
impairment of goodwill is required. Management has estimated future cash flows
over a five-year period, which are based on extrapolated budget models which
have been approved by the Board, and applied a discount rate of 11.3% (2023:
13.2%) and then applied a terminal value calculation, which assumes a growth
rate of 2.5% (2023: 3.5%) in future cashflows, in order to estimate the
present value of those cash flows in determining the value in use. Management
believes that any reasonably possible changes to any of the key assumptions
applied in determining the value in use would not cause the carrying amount of
goodwill to exceed the present value of the estimated future cashflows.
The sensitivity of the value in use for all acquisitions to changes in the key
assumptions are as follows:
(Decrease) in value in use
£m
Assumption Base assumption Change in base assumption
Discount rate 11.3% +1.0% (absolute) (49.4)
Years 1- 5 cash flows Various -5.0% (proportionate) (82.7)
Long-term growth rate 2.5% -1.0% (absolute) (37.4)
From management's assessment no reasonable change in assumptions would result
in an impairment of goodwill.
Software
Software Development Acquired Technology Under Construction Customer Relationships Trademarks and Brand Other Relationships
Licenses Website Total
Other intangibles assets £'000s £'000s £'000s £'000s £'000s £'000s £'000s £'000s £'000s
Cost
As at 1 January 2024 108 216 1,539 16,824 - 2,337 5,089 34,568 60,681
Additions - 77 2,263 - 274 - - - 2,614
Disposals (108) - - - - - - - (108)
As at 31 December 2024 - 293 3,802 16,824 274 2,337 5,089 34,568 63,187
Accumulated Amortisation
As at 1 January 2024 108 51 314 2,525 - 1,070 1,163 3,976 9,207
Charge for the year - 82 464 1,683 - 273 483 2,722 5,707
Disposals (108) - - - - - - - (108)
As at 31 December 2024 - 133 778 4,208 - 1,343 1,646 6,698 14,806
Net book value as at 31 - 160 3,024 12,616 274 994 3,443 27,870 48,381
December 2024
Software
Software Acquired Under Customer Trademarks Other
Licenses Website Development Technology Construction Relationships and Brand Relationships Total
Other intangibles assets £'000s £'000s £'000s £'000s £'000s £'000s £'000s £'000s £'000s
Cost
As at 1 January 2023 108 223 1,105 16,824 - 2,337 5,089 34,568 60,254
Additions - 133 988 - - - - - 1,121
Disposals - (140) (554) - - - - - (694)
As at 31 December 2023 108 216 1,539 16,824 - 2,337 5,089 34,568 60,681
Accumulated Amortisation
As at 1 January 2023 108 140 610 842 - 797 680 1,254 4,431
Charge for the year - 51 258 1,683 - 273 483 2,722 5,470
Disposals - (140) (554) - - - - - (694)
As at 31 December 2023 108 51 314 2,525 - 1,070 1,163 3,976 9,207
Net book value as at 31 - 165 1,225 14,299 - 1,267 3,926 30,592 51,474
December 2023
Net book value as at 31 - 83 495 15,982 - 1,540 4,409 33,314 55,823
December 2022
Assets which are internally generated are solely within asset categories;
Website, Software Development and Software Under Construction. Internally
Generated Software Under Construction consists of proprietary software assets
designed exclusively for use within the Group, these assets are tailored to
enhance and streamline the customer journey, ensuring seamless interactions
and operational efficiency.
During 2024 the Group has capitalised the MIDAS Platform development spend
after management deemed that the criteria for recognition under IAS 38 has
been met. This has resulted in £1,406,000 of spend capitalised (2023: £nil)
with £81,000 (2023: £nil) of Platform development spend included in software
under construction as the feature developed hasn't been released to the system
and the features are expected to be released in 2025.
Individually Material Intangible Assets
NBV as at 31 NBV as at 31
December December
2024 2023 Amortisation End Date
Asset Description Asset Category £'000 £'000
Fluent Money Limited - Technology Technology/Software 12,622 14,305 July 2032
Fluent Mortgages Limited - Introducer Relationships Other relationships 10,258 11,149 July 2036
Fluent Lifetime Limited - Introducer Relationships Other relationships 6,426 6,985 July 2036
Fluent Money Limited - Lender Relationships Other relationships 5,754 6,254 July 2036
Fluent Bridging Limited - Introducer Relationships Other relationships 5,165 5,614 July 2036
Fluent Money Limited - Brand Trademarks and brands 2,682 2,997 July 2033
First Mortgage Direct Limited - Customer Relationships Customer relationships 770 990 July 2028
First Mortgage Direct Limited - Brand Trademarks and brands 662 809 July 2029
15 Investments in associates and joint ventures
The investments in associates and a joint venture at the reporting date is as
follows:
2024 2023
£'000 £'000
At start of the 11,387
period
12,301
Additions 469
2,000
Credit to statement of comprehensive income
Share of profit 1,315 848
1,315 848
Dividends received (798) (403)
At period end 14,818 12,301
The Group is entitled to the results of its associates in equal proportion to
its equity stakes.
The carrying value of the Group's joint venture, MAB Broker Services PTY
Limited, as at 31 December 2024 is £nil (2023: £nil). In the year ended 30
June 2024, MAB Broker Services PTY Limited reported a profit of AUD0.04m
(2023: profit of AUD0.01m).
Acquisitions and disposals
2024
On 18 December 2024, Mortgage Advice Bureau Limited acquired 18.9% of the
shareholding of Dashly Limited for a consideration of
£2.0m. The Group is deemed to have significant influence as a result of
various contractual arrangements and has been treated as an associate.
2023
On 26 May 2023, First Mortgage Direct Limited acquired a further 12% of M
& R FM Limited for a consideration of £0.5m, bringing its
total stake to 37%.
Summarised financial information for associates
The tables below provide summarised financial information for those associates
and joint ventures that are material to the Group. The information disclosed
reflects the amounts presented in the unaudited financial statements or
management accounts of the
relevant associates and joint ventures and not the Group's share of those
amounts:
2024
Heron Financial Meridian Clear
Ltd Holdings Group Ltd Sort Group Mortgage Solutions Ltd M & R FM
Evolve FS Ltd Limited Limited Dashly Ltd
£'000 £'000 £'000 £'000 £'000 £'000 £'000
Non-current assets 34 593 664 770 82 69 2,683
Cash balances 296 267 1,457 2,907 1,074 1,894 682
Current assets (exc. 474 674 805 759 316 504 265
Current liabilities (241) (391) (690) (807) (513) (450) (1,254)
Non-Current liabilities (418) (248) (446) (207) (494) (606) (33)
Revenue 3,858 3,140 7,965 13,743 5,919 5,073 688
Profit / (Loss) before taxation (83) 650 432 1,098 954 1,643 (1,095)
Total comprehensive income (83) 488 324 779 716 1,249 (1,022)
Carrying value of investment
As at 1 January 2024 2,905 2,757 1,566 2,195 1,021 1,402 -
Increase in investment - - - - - - 2,000
Profit / (Loss) attributable to the Group (152) 200 134 275 251 422 -
Dividends received - (293) - - (271) (185) -
At 31 December 2024 2,753 2,664 1,700 2,470 1,001 1,639 2,000
2023
Meridian Holdings
Evolve FS Heron Financial Ltd Group Ltd Sort Group Clear Mortgage Solutions Ltd M & R FM
Ltd Limited Limited
£'000 £'000 £'000 £'000 £'000 £'000
Non-current 221 1,974 649 24 53
assets 29
Cash 552 1,076 2,295 1,097 1,073
balances
420
Current assets (exc. Cash balances) 349 873 675 567 384 485
Current liabilities (614) (455) (652) (642) (404) (377)
Non-Current liabilities and provisions (8) (419) (380) (84) (600) (410)
Revenue 4,237 2,409 7,129 11,794 4,974 3,874
Profit before taxation 60 600 385 788 507 1,000
Total comprehensive income 48 497 289 673 416 802
Carrying value of investment
As at 1 January 2023 2,882 2,638 1,497 1,936 864 906
Increase in investment - - - - - 469
Profit attributable to the Group 23 244 69 259 213 249
Dividends received - (125) - - (56) (222)
At 31 December 2023 2,905 2,757 1,566 2,195 1,021 1,402
Individually immaterial associates and joint ventures
In addition to the interests in associates disclosed above, the Group also has
interests in a number of individually immaterial associates and a joint
venture that are accounted for using the equity method. The aggregate of the
summarised financial information for these associates is shown below, along
with the summarised financial information for the joint venture. The
information disclosed reflects the amounts presented in the unaudited
financial statements or management accounts of the
relevant associates and the joint venture and not the Group's share of those
amounts:
2024 2023 2024 2023
Associates Associates Joint Ventures Joint Ventures
£000 £000 £000 £000
Non-current 991 0 5
assets
765
Cash 680 179 26
balances
714
Current assets (exc. Cash 1,295 1,048 1,127
balances)
1,902
Current liabilities (1,386) (1,202) (162) (53)
Non-Current liabilities and provisions (664) (794) 0 (111)
Revenue 11,187 8,893 351 406
Profit / (Loss) before taxation 453 (645) 151 11
Total comprehensive income 359 (675) 145 11
Profit/ (Loss) attributable to the Group 185 (210) - -
Dividends received 49 - - -
All associates and joint venture prepare their financial statements in
accordance with FRS 102 other than MAB Broker Services PTY Limited who prepare
their financial statements in accordance with the Australian Accounting
Standards. There would be no material difference to the profit attributable to
the Group if the accounts of any of the associates were prepared in accordance
with IFRS.
Unrecognised losses
The Group has discontinued recognising its share of losses from its joint
venture as these exceed the carrying amount of the investment. The Group had
unrecognised profits in the year of £70,000 (2023: £44,000) and cumulative
unrecognised losses of
£687,000 (2023: £757,000).
Derivative financial instruments
The put and call options are carried at fair value through profit or loss. The
carrying values for the call options at 31 December 2024 have resulted in a
financial asset of £211,000 (2023: £302,000) for Evolve FS Limited (Evolve)
and £1,000 (2023: £nil) for Heron Financial Limited (Heron). The carrying
value for the put option has resulted in a financial liability of £71,000
(2023: £182,000) for
Heron at 31 December 2024.
The fair values of the option contracts have been calculated using an option
valuation model. The key assumptions used to value the options in the model
are the value of shares in the associate, the anticipated growth of the
business, the option exercise price, the expected life of the option, the
expected share price volatility of similar businesses, forecast dividends and
the risk-free interest rate. The gains and losses relating to the derivative
financial instruments is included within 'operating profit'. These financial
instruments are categorised as Level 3 within the fair value hierarchy.
16 Trade and other receivables
2024 2023
£'000 £'000
Trade receivables 2,515 2,028
Less provision for impairment of trade receivables (336) (454)
Trade receivables - net 2,179 1,574
Other receivables 198 924
Loans to related parties 699 201
Less provision for impairment of loans to related parties (15) (18)
Total financial assets other than cash and cash equivalents 3,061 2,681
Prepayments 3,093 1,895
Accrued income 4,698 5,098
Total trade and other receivables 10,852 9,674
Less: non-current - Loans to related parties (265) (77)
Less: non-current - Trade receivables (824) (276)
Current trade and other receivables 9,763 9,321
2024 2023
Reconciliation of movement in trade and other receivables to cash flow £'000 £'000
Movement per trade receivables 1,178 (1,445)
Accrued interest movement - 13
Total movement per cash flow 1,178 (1,432)
All amounts relating to accrued income at the end of 2022 (£5,273,000) and
2023 (£5,098,000) were received in the following year.
The carrying value of trade and other receivables classified at amortised cost
approximates fair value.
Included within trade receivables are operational business loans to Appointed
Representatives. The non-current trade receivables balances is comprised of
loans to Appointed Representatives.
Also included in trade receivables are amounts due from Appointed
Representatives relating to commissions that are refundable to the Group when
policy lapses or other reclaims exceed new business. As these balances have no
credit terms, the Board of Directors consider these to be past due if they are
not received within seven days. In the management of these balances, the
Directors can recover them from subsequent new business entered into with the
Appointed Representative or utilise payables that are owed to the same
counterparties and included within payables as the Group has the legally
enforceable right of set off in such circumstances. These payables are
considered sufficient by the Directors to recover receivable balances should
they default, and, accordingly, credit risk in this respect is minimal.
In light of the above, the Directors do not consider that disclosure of an
aging analysis of trade and other receivables would provide useful additional
information. Further information on the credit quality of financial assets is
set out in note 20.
Impairment provisions for trade receivables are recognised based on the
simplified approach within IFRS 9 using the lifetime expected credit losses.
During this process the probability of the non-payment of the trade
receivables is assessed. This probability is then multiplied by the amount of
the expected loss arising from default to determine the lifetime expected
credit loss for the trade receivables. For trade receivables, which are
reported net, such provisions are recorded in a separate provision account
with the loss being recognised within cost of sales in the consolidated
statement of comprehensive income. On confirmation that the trade receivable
will not be collectable, the gross carrying value of the asset is written off
against the associated provision. As at 31 December 2024 the lifetime expected
loss provision for trade receivables is £0.3m (2023: £0.5m). The movement in
the impairment allowance for trade receivables has been included in cost of
sales in the consolidated statement of comprehensive income.
Impairment provisions for loans to associates are recognised based on a
forward-looking expected credit loss model. The methodology used to determine
the amount of the provision is based on whether there has been a significant
increase in credit risk since initial recognition of the financial asset. For
those where the credit risk has not increased significantly since initial
recognition of the financial asset, twelve month expected credit losses along
with gross interest income are recognised. For those for which credit risk has
increased significantly, lifetime expected credit losses along with the gross
interest income are recognised. For those that are determined to be credit
impaired, lifetime expected credit losses along with interest income on a net
basis are recognised. In determining the lifetime expected credit losses for
loans to associates, the Directors have considered different scenarios for
repayments of these loans and have applied percentage probabilities to each
scenario for each associate where applicable.
2024 2023
£'000 £'000
As at 1 January 454 476
New impairment provisions in the year 121 -
Provision utilised in the year (239) -
Impairment provisions no longer required - (22)
As at 31 December 336 454
A summary of the movement in the provision for the impairment of loans to
related parties is as follows:
2024 2023
£'000 £'000
As at 1 2
January
18
Increase in existing provisions for impairment 16
losses
-
Impairment provisions no longer -
required
(2)
As at 31 18
December
16
As at 31 December 2024 the lifetime expected loss provision for loans to
associates is £0.0m (2023: £0.0m), with 12 month
expected credit losses recognised for remaining associates.
The maximum exposure to credit risk at the reporting date is the carrying
value of each class of receivables mentioned above less collateral held as
security. Details of security held are given in note 20.
17 Cash and cash equivalents
2024 2023
£'000 £'000
Unrestricted cash and bank 3,022
balances
4,187
Bank balances held in relation to retained 18,918
commissions
19,488
Cash and cash 21,940
equivalents
23,675
Bank balances held in relation to retained commissions earned on an indemnity
basis from protection policies are held to cover potential future lapses in
Appointed Representatives commissions. Operationally the Group does not treat
these balances as available funds. An equal and opposite liability is shown
within Trade and other payables (note 18).
18 Trade and other payables
2024 2023
£'000 £'000
Appointed Representatives retained commission 19,488 18,918
Other trade payables 8,471 7,644
Trade payables 27,959 26,562
Social security and other taxes 1,799 2,116
Other payables 356 169
Accruals 9,368 9,020
Total trade and other payables 39,482 37,867
2024 2023
£'000 £'000
Current 35,225
36,503
Non-current 2,642
2,979
Total trade and other 37,867
payables
39,482
Should a protection policy be cancelled within four years of inception, a
proportion of the original commission will be clawed back by the insurance
provider. The majority of any such repayment is payable by the Appointed
Representative, with the Group making its own liability for its share of any
such repayment. It is the Group's policy to retain a proportion of commission
payable to the Appointed Representative to cover such potential future lapses;
these sums remain a liability of the Group. This commission is held in a
separate ring-fenced bank account as described in note 18.
The non-current portion of trade and other payables relates to Appointed
Representative retained commission and accruals, see note 21.
As at 31 December 2024 and 31 December 2023, the carrying value of trade and
other payables classified as financial liabilities measured at amortised cost
approximates fair value.
2024 2023
Reconciliation of movement in trade and other payables to cash £'000
flow £'000
Movement per trade and other 1,218
payables
1,615
Accrued amounts relating to non-controlling interest (996)
purchase
2,423
Share-based payment (505)
accruals
(870)
Total movement per cash (283)
flow
3,168
19 Loans and borrowings
2024 2023
£'000 £'000
Bank loans 13,837 18,250
Total loans and borrowings 13,837 18,250
Less: non-current - Bank loans (8,735) (12,426)
Current loans and borrowings 5,102 5,824
A summary of the maturity of loans and borrowings is as follows:
2024 2023
Bank loans £'000 £'000
Payable in 1 year 5,102 5,824
Payable in 1-2 years 3,735 3,750
Payable in 2-5 years 5,000 8,676
Total bank loans 13,837 18,250
In connection with the acquisition of Fluent, the Group entered into an
agreement on 28 March 2022 with NatWest, in respect of a new term loan for
£20m and a revolving credit facility for £15m (the Facilities Agreement), in
order to part fund the cash consideration payable in relation to the
acquisition. It is MAB's intention to repay the drawn down proportion of the
revolving element of this debt facility as soon as practicable. In respect of
the new facilities, the Group has given security to NatWest in the form of
fixed and floating charges over the assets of Mortgage Advice Bureau Limited,
Mortgage Advice Bureau (Derby) Limited, Mortgage Advice Bureau (Holdings) plc,
First Mortgage Direct Limited, First Mortgage Limited, Project Finland Bidco
Limited, Fluent Money Limited and Fluent Mortgages Limited.
Loan covenants
Under the terms of the Facilities Agreement, the Group is required to comply
with the following financial covenants:
• Interest cover shall not be less than 5:1
• Adjusted leverage shall not exceed 2:1
The Group is required to comply with covenants on a quarterly basis and has
complied with these covenants since the Facilities Agreement was entered into.
There is no indication that the covenants will be breached in the foreseeable
future and under IAS 1 the proportion not expected to be settled within a year
has been treated as non-current.
20 Financial instruments - risk management
The Group is exposed through its operations to the following financial risks:
• Credit risk
• Liquidity risk
• Market risk
In common with all other businesses, the Group is exposed to risks that arise
from its use of financial instruments. This note describes the Group's
objectives, policies and processes for managing those risks and the methods
used to measure them. Further quantitative information in respect of these
risks is presented throughout these financial statements.
Principal financial instruments
• Trade and other receivables
• Derivative financial instruments
• Cash and cash equivalents
• Trade and other payables
• Loans and other borrowings
A summary of financial instruments by category is provided below:
2024 2023
Financial assets £'000 £'000
Cash and cash equivalents 23,675 21,940
Trade and other receivables (amortised cost) 3,061 2,681
Derivative financial instruments (FVTPL) 212 302
Total financial assets 26,948 24,923
2024 2023
Financial liabilities £'000 £'000
Trade and other payables (amortised cost) 8,827 7,812
Loans and borrowings (amortised cost) 13,837 18,250
Accruals (amortised cost) 9,368 9,020
Redemption liability (Amortised cost) 3,970 2,793
Clawback liability (amortised cost) 12,591 10,331
Lease liabilities (amortised cost) 4,220 2,736
Derivative financial instruments (FVTPL) 71 183
Appointed representative retained commission (amortised cost) 19,488 18,918
Total financial liabilities 72,372 70,043
General objectives, policies and processes
The Board has overall responsibility for the determination of the Group's risk
management objectives and policies, and designs and operates processes that
ensure the effective implementation of the objectives and policies to the
Group's finance function. The Board sets guidelines to the finance team and
monitors adherence to its guidelines on a monthly basis.
The overall objective of the Board is to set policies that seek to reduce risk
as far as possible without unduly affecting the Group's competitiveness and
flexibility. Further details regarding these policies are set out below.
Credit risk
Credit risk is the risk of financial loss to the Group if a trading partner or
counterparty to a financial instrument fails to meet its contractual
obligations. The Group is mainly exposed to credit risk from loans to its
trading partners. It is Group policy to assess the credit risk of trading
partners before advancing loans or other credit facilities. Assessment of
credit risk utilises external credit rating agencies. Personal guarantees are
generally obtained from the Directors of its trading partners.
Quantitative disclosures of the credit risk exposure in relation to financial
assets are set out below. Further disclosures regarding trade and other
receivables are given in note 16.
2024 2023
Financial assets- maximum exposure £'000 £'000
Cash and cash equivalents 23,675 21,940
Trade and other receivables (amortised cost) 3,061 2,681
Derivative financial instruments (FVTPL) 212 302
Total financial assets 26,948 24,923
The carrying amounts stated above represent the Group's maximum exposure to
credit risk for trade and other receivables. An element of this risk is
mitigated by collateral held by the Group for amounts due to them.
Trade receivables consist of a large number of unrelated trading partners and
therefore credit risk is not concentrated. Due to the large volume of trading
partners the Group does not consider that there is any significant credit risk
as a result of the impact of external market factors on their trading
partners. Additionally, within trade payables are Appointed Representative
retained commission amounts due to the same trading partners that are included
in trade receivables; this collateral of £0.5m (2023: £0.2m) reduces the
credit risk.
The Group's credit risk on cash and cash equivalents is limited because the
Group places funds on deposit with National Westminster Bank plc (rated A),
The Royal Bank of Scotland plc (rated A+), Barclays plc (rated A), HSBC Bank
plc (rated AA-) and Bank of Scotland plc (rated A+).
Market risk
Interest rate risks
The Group's main interest rate risk arises from borrowings, both short term
facilities and long-term debt, with floating interest rates that are linked to
SONIA. The Group manages the risk by continually reviewing expected future
volatility in UK interest rates and will consider entering into hedges as
deemed appropriate to fix the floating interest rate. A maturity analysis of
loans and borrowings is
set out in Note 19.
Foreign exchange risk
As the Group does not operate outside of the United Kingdom and has only one
investment outside the United Kingdom, it is not
exposed to any material foreign exchange risk.
Liquidity risk
Liquidity risk arises from the Group's management of working capital. It is
the risk that the Group will encounter difficulty in meeting
its financial obligations as they fall due.
The Group's policy is to ensure that it will always have sufficient cash to
allow it to meet its liabilities when they become due. The Group's trade and
other payables are repayable within one year from the reporting date and the
contractual undiscounted cash flow analysis for the Group's trade and other
payables is the same as their carrying value. The contractual maturities of
financial liabilities are as follows:
31 December 2024
(£'000) Within 1 year 1-2 years 2- 5 years After 5 years Total
Trade and other payables (amortised cost) 8,827 - - - 8,827
Loans and borrowings (amortised cost) 5,602 4,328 5,381 - 15,311
Accruals (amortised cost) 7,718 515 1,135 - 9,368
Redemption liability (amortised cost) - 460 3,510 - 3,970
Clawback liability (amortised cost) 12,591 - - - 12,591
Lease liabilities (amortised cost) 1,098 794 1,743 1,962 5,597
Derivative financial instruments (FVTPL) - 71 - - 71
Appointed representative retained commission 18,159 309 743 277 19,488
(amortised cost)
53,995 6,477 12,512 2,239 75,223
31 December 2023
(£'000) Within 1 year 1-2 years 2- 5 years After 5 years Total
Trade and other payables (amortised cost) 7,812 - - - 7,812
Loans and borrowings (amortised cost) 6,508 4,588 7,555 - 18,651
Accruals (amortised cost) 7,305 1,046 669 - 9,020
Redemption liability (amortised cost) - - 2,793 - 2,793
Clawback liability (amortised cost) 10,331 - - - 10,331
Lease liabilities (amortised cost) 997 792 1,005 81 2,875
Derivative financial instruments (FVTPL) - 183 - - 183
Appointed representative retained commission 17,991 49 700 178 18,918
(amortised cost)
50,944 6,658 12,722 259 70,583
Appointed Representative retained commission does not have a definite maturity
date and it is not possible to accurately estimate the repayment profile,
other than when Appointed Representative firms are in the initial term of
their contract. The Directors consider that the disclosed maturity profile is
the most appropriate.
The Board receives annual 12-month cash flow projections based on working
capital modelling as well as information regarding cash balances monthly. At
the end of the financial year, these projections indicated that the Group
expected to have sufficient liquid resources to meet its obligations under all
reasonably expected circumstances. Additionally, the Group has financial
resource requirements set by its regulator, the Financial Conduct Authority.
The Board has set a policy to ensure that adequate capital is maintained to
ensure that these externally set financial resource requirements are exceeded
at all times. Quarterly reports are made to the Financial Conduct Authority
and submission is authorised by the Chief Financial Officer, at which time
capital adequacy is reassessed.
Capital management
The Group monitors its capital which consists of all components of equity
(i.e. share capital, share premium, capital redemption reserve, share option
reserve and retained earnings). The Group manages its capital with the
objective that all entities within the Group continue as going concerns while
maintaining an efficient structure to minimise the cost of capital and deliver
sustainable
returns for shareholder in the form of distributions and capital growth
through business performance.
The Group is subject to financial resource requirements set by its regulator,
the Financial Conduct Authority, which we ensure has appropriate coverage at
all times. The Excess Capital resources at 31 December 2024 was £43.0m (2023:
£28.0m) with the Group expected to continue meeting all requirements based on
the latest Going Concern assessment.
21 Clawback liability
2024 2023
£'000 £'000
As at 1 8,038
January
10,331
Charged to the consolidated statement of comprehensive 2,293
income
2,260
As at 31 10,331
December
12,591
The balance relates to refund liabilities for the estimated cost of repaying
commission income received upfront on protection policies that may lapse in
the four years following issue. Under the Group's revenue contracts with
protection providers, if the policy is cancelled by the customer within a
four-year period after the inception of the policy, then a proportion of the
commission received upfront has to be repaid to the protection provider. While
the exact timing of any future repayments (termed 'clawbacks') within the
four-year period is uncertain, it has been estimated based on both data from
protection providers and internal commission data that
£5.2m (2023: £4.4m) of the liability would be payable after more than one
year. The liability is based on the Directors' best estimate, using industry
data where available, of the probability of clawbacks to be made.
A liability is recognised in the financial statements of nine of the Group's
subsidiaries: Mortgage Advice Bureau Limited, Mortgage Advice Bureau (Derby)
Limited, Capital Protect Limited, First Mortgage Limited, Fluent Mortgages
Limited, Fluent Mortgages Horwich Limited, Vita Financial Limited, BPR Protect
Limited and Auxilium Partnership Limited.
22 Deferred tax
Deferred tax is calculated in full on temporary differences using tax rates of
25% based on when the temporary differences are
expected to unwind (2023: 25%)
The movement in deferred tax is shown below:
2024 2023
£'000 £'000
Net deferred tax liability - opening balance (10,698) (12,862)
Recognised in the consolidated statement of comprehensive income 5 1,715
Deferred tax movement recognised in equity (692) 449
Net deferred tax liability - closing balance (11,385) (10,698)
The deferred tax balance is made up as follows:
2024 2023
£'000 £'000
Fixed asset timing (13,355)
differences
(12,311)
Other timing 295
differences
216
Tax 1,138
losses
219
Share-based 1,224
payment
491
Net deferred tax (10,698)
liability
(11,385)
2024 2023
Reflected in the statement of financial position as follows: £'000 £'000
Deferred tax liability (11,385) (11,417)
Deferred tax asset - 719
Net deferred tax liability (11,385) (10,698)
23 Share capital
2024 2023
Issued and fully £'000
paid
£'000
Ordinary shares of 0.1p 57
each
58
Total share 57
capital
58
During the period 25,001 ordinary shares of 0.1p each were issued following
partial exercise of options issued in 2020 and 2021 at no premium. 804,754
ordinary shares were also issued following the exercise of the option over the
remaining 20% stake in First Mortgage Direct Limited, see note 5 for further
details. As at 31 December 2024, there were 57,956,789 ordinary shares of 0.1p
in issue (2023: 57,127,034).
24 Reserves
The Group's policy is to maintain an appropriate capital base and comply with
its externally imposed capital requirements whilst providing maximum
shareholder value.
The following describes the nature and purpose of each reserve within equity:
Reserve
Description and purpose
Share
premium
Amount subscribed for share capital in excess of nominal value.
Capital redemption reserve
Share option reserve
Retained earnings
The capital redemption reserve represents the cancellation of part of the
original share capital premium of the company at par value of any shares
repurchased.
The fair value of equity instruments granted by the Company in respect of
share-based payment transactions and deferred tax recognised in equity.
All other net gains and losses and transactions with owners (e.g. dividends)
not recognised elsewhere.
There is no restriction on the distribution of retained earnings.
25 Retirement benefits
The Group operates several defined contribution pension schemes for the
benefit of its employees and also makes contributions to self-invested
personal pensions (SIPP). The assets of the schemes and the SIPP are held
separately from those of the Group in independently administered funds. The
pension expense represents contributions payable by the Group to the SIPP and
amounted
to £1.4m (2023: £1.7m). There were contributions payable to the SIPP as at
31 December 2024 of £0.3m (2023: £0.3m).
26 Related party transactions
The following table shows the total amount of transactions that have been
entered into with related parties during the year and balances held with as at
the year ended 31 December 2024 and 2023.
Relationship Commission Balance of retained Loans owed to MAB
received/(paid) commissions*
31 December 31 December 31 December 31 December 31 December 31 December
2024 2023 2024 2023 2024 2023
£'000 £'000 £'000 £'000 £'000 £'000
Buildstore Limited Associate (964) (830) 51 23 10 -
Sort Limited Associate 1,087 1,512 - - - -
Clear Mortgage Associate (5,998) (5,227) 571 595 - -
Solutions Limited
Evolve FS Ltd Associate (3,722) (3,976) 277 178 - -
The Mortgage Broker Associate (1,614) (1,555) 61 67 - 5
Limited
Meridian Holdings Associate (5,128) (3,541) 485 550 - 81
Group Ltd
M & R FM Ltd Associate (245) (3,332) 284 184 - -
Heron Financial Limited Associate (3,175) (1,776) 118 41 267 -
Pinnacle Surveyors Associate (306) - - - 406 100
(England & Wales) Ltd
MAB Broker Services PTY Joint Venture - - - - 15 15
Limited
* Balances in relation to retained commissions are to cover future lapses
During the period the Group received dividends from associate companies as
follows:
31 December 31 December
2024 2023
£'000 £'000
Clear Mortgage Solutions Limited 271 56
M & R FM Limited 185 222
Heron Financial Limited 293 125
Pinnacle Surveyors (England & Wales) Ltd 49 -
Total dividends received 798 403
27 Share-based payments
Mortgage Advice Bureau Executive Share Option Plan
The Group operates two equity-settled share-based remuneration schemes for
Executive Directors and certain senior management, one being an approved
scheme, the other unapproved, but with similar terms. For options granted
before 2023, half of the options are subject to a total shareholder return
(TSR) performance condition and the remaining half are subject to an earnings
per share (EPS) performance condition. For options granted during 2023 and
2024, the options are subject to an earnings per share (EPS) performance
condition. The outstanding options in the unapproved scheme vest and are
exercisable as follows:
For options granted during 2018 and outstanding as at 1 January 2024:
100% based on performance to 31 March 2021, exercisable between 11 April 2021
and 9 April 2026.
For options granted during 2019 and outstanding as at 1 January 2024:
100% based on performance to 31 March 2022, exercisable between 1 July 2022
and 1 July 2027.
For options granted during 2020 and outstanding as at 1 January 2024:
100% based on performance to 31 March 2023, exercisable between 22 April 2023
and 21 July 2028.
For options granted during 2021 and outstanding as at 1 January 2024:
100% based on performance to 31 March 2024, exercisable between 1 April 2024
and 31 March 2029.
For options granted during 2022 and outstanding as at 1 January 2024:
100% based on performance to 31 March 2025, exercisable between 6 April 2025
and 6 June 2030.
For options granted during 2023 and outstanding as at 1 January 2024:
100% based on performance to 31 December 2025, exercisable between 1 April
2026 and 30 May 2031.
For options granted during the year:
100% based on performance to 31 December 2026, exercisable between 1 April
2027 and 30 May 2032.
The number and weighted average exercise price (WAEP) of, and movements in,
share options during the year for the Mortgage Advice Bureau Executive Share
Option Plan:
2024 WAEP 2024 2023 WAEP 2023
£ Number £ Number
Outstanding as at 1 January 0.001 756,029 0.001 576,003
Granted during the year 0.001 325,549 0.001 296,375
Exercised 0.001 (25,001) 0.001 (96,039)
Lapsed* - (192,168) - (20,310)
Outstanding as at 31 December 0.001 864,409 0.001 756,029
Exercisable as at 31 December 0.001 224,596 0.001 221,484
* Due to not fully vesting, retirement or leaving the Group.
On 22 April 2024 and 24 May 2024, 274,563 and 50,986 options over ordinary
shares of 0.1 pence each in the Company, respectively, were granted to the
Executive Directors and senior executives of the Group under the equity
settled Mortgage Advice Bureau Executive Share Option Plan (the Options) at a
fair value of £8.29 and £8.01 respectively. Exercise of the Options is
subject to the service conditions and achievement of performance conditions
based on total shareholder return and earnings per share criteria. Subject to
achievement of the performance conditions, the Options will be exercisable 35
months and 34 months respectively from the date of grant. The exercise price
for the Options is 0.1 pence, being the nominal cost of the Ordinary Shares.
Options exercised in April 2024 resulted in 25,001 ordinary shares being
issued at an exercise price of £0.01. The price of the ordinary shares at the
time of exercise were £9.22.
For the Options outstanding under the Mortgage Advice Bureau Executive Share
Option Plan as at 31 December 2024, the weighted average remaining contractual
life is 4.8 years (2023: 5.9 years). This is calculated on the basis of the
final date that the options can be exercised.
The following information is relevant in the determination of the fair value
of options granted during the year under the equity-settled share-based
remuneration scheme operated by the Group.
2024 2023
Option pricing model Black- Scholes Black- Scholes
Exercise price £0.001 £0.001
Expected dividend yield* 3.11% 3.98%
*The expected dividend yield is the weighted average yield for the shares
issued during 2024.
The options granted during 2024 are subject to performance criteria based
solely on earnings per share performance. They have a vesting period of 2
years and 11 months and 2 years and 10 months based on the grant date of 22
April 2024 and 24 May 2024 from the date of grant and the calculation of the
share-based payment is based on this vesting period respectively.
Share-based remuneration expense
The share-based remuneration costs for the period are made up as follows:
2024 2023
£'000 £'000
Charge for equity settled schemes 127 177
National Insurance on equity settled schemes (330) (13)
Share incentive plan costs 98 143
Free shares awarded to employees 337 293
Charge for equity settled acquisition options 1,555 3,203
Charge for cash settled acquisition options 765 626
Total costs 2,552 4,429
Options exercised during the period resulted in a transfer from the Share
option reserve to Retained earnings of £0.2m (2023:
£0.4m) reflected in the consolidated statement of changes in equity.
28 Events after the reporting date
There were no material events after the reporting date which have a bearing on
the understanding of these consolidated financial
statements.
29 Non-controlling interest (NCI)
Set out below is summarised financial information for each subsidiary that has
a non-controlling interest that is material to the Group.
The amounts disclosed for each subsidiary are their consolidated financial
information before inter-company eliminations.
Project Finland Topco
2024 Limited
Summarised balance sheet £'000
Current assets 5,388
Current liabilities (4,676)
Current net assets 712
Non-current assets 11,907
Non-current liabilities (225)
Non-current net assets 11,682
Net Group assets on consolidation 30,911
Net Assets 43,305
Accumulated NCI 999
Summarised statement of comprehensive income £'000
Revenue 41,734
Profit for the period and total comprehensive income 1,363
Profit allocated to NCI 214
Dividends paid to
NCI
-
Summarised cash flows £'000
Cash flows from operating activities 838
Cash flows used in investing activities (331)
Cash flows used in financing activities (484)
Net increase in cash & cash equivalents 23
Net Group assets on consolidation included above relate to acquired intangible
assets and associated deferred tax liabilities. The profit/(loss)
for the period and total comprehensive income includes the amortisation of
these acquired intangible assets and the associated movements in
deferred tax.
First Mortgage Project Finland
2023 Direct Limited Topco Limited Total
Summarised balance sheet £'000 £'000 £'000
Current assets 14,585 2,278 16,863
Current liabilities (7,125) (3,605) (10,730)
Current net assets/ (liabilities) 7,460 (1,327) 6,133
Non-current assets 3,281 11,021 14,302
Non-current liabilities (1,410) (1,805) (3,215)
Non-current net assets 1,871 9,216 11,087
Net Group assets on consolidation 1,349 35,218 36,567
Net Assets 10,680 43,107 53,787
Accumulated NCI 2,386 1,289 3,675
Summarised statement of comprehensive income £'000 £'000 £'000
Revenue 22,602 37,521 60,123
Profit for the period and total comprehensive income 3,731 (7,772) (4,041)
Profit allocated to NCI 781 (1,345) (564)
Dividends paid to NCI 692 - 692
Summarised cash flows £'000 £'000 £'000
Cash flows from operating activities 3,251 550 3,801
Cash flows used in investing activities (516) (594) (1,110)
Cash flows used in financing activities (3,909) (875) (4,784)
Net increase in cash & cash equivalents (1,174) (919) (2,092)
30 Contingent Liabilities
The Group had no contingent liabilities as at 31 December 2024 or 31 December
2023.
31 Ultimate controlling party
There is no ultimate controlling party.
32 Notes supporting statement of cash flows
Cash and cash equivalents for purposes of the statement of cash flows
comprises:
Loans and borrowings
Leases Total
£'000 £'000 £'000
Balance as at 31 December 2022 and 1 January 2023 23,407 3,947 27,354
Cash Flows:
Repayment of borrowings (5,350) - (5,350)
Principal lease payments - (907) (907)
Interest paid (1,205) (107) (1,312)
Non-cash flows:
New leases 13 13
Interest charged 1,320 107 1,427
Unwinding of loan arrangement fees 77 - 77
Lease remeasurement - (317) (317)
Balance as at 31 December 2023 and 1 January 2024 18,249 2,736 20,985
Cash Flows:
Repayment of borrowings (4,350) - (4,350)
Principal lease payments - (865) (865)
Interest paid (1,329) (68) (1,397)
Non-cash flows:
New leases and lease remeasurements - 2,349 2,349
Interest charged to income statement 1,199 68 1,267
Unwinding of loan arrangement fees 68 - 68
Balance as at 31 December 2024 13,837 4,220 18,057
Group companies
In accordance with Section 409 of the Companies Act 2006 a full list of
subsidiaries, associates and joint ventures, the address of the
registered office, effective percentage of equity owned and the associated
nature of each business as at 31 December 2024 are disclosed below.
Subsidiaries Percentage of
ordinary shares held (effective holding)
Company Name Registered Address Nature of business
Mortgage Advice Bureau Limited Capital House, Pride Place Pride Park, Derby, DE24 8QR 100 Provision of financial services
Mortgage Advice Bureau (Derby) Limited Capital House, Pride Place Pride Park, Derby, DE24 8QR 100 Provision of financial services
Capital Protect Limited Capital House, Pride Place Pride Park, Derby, DE24 8QR 100 Provision of financial services
Mortgage Talk Limited Capital House, Pride Place Pride Park, Derby, DE24 8QR 100 Provision of financial services
Talk Limited Capital House, Pride Place Pride Park, Derby, DE24 8QR 100 Intermediate holding company
MABWM Limited Capital House, Pride Place Pride Park, Derby, DE24 8QR 100 Provision of financial services
First Mortgage Direct Limited 30 Walker Street, Edinburgh, EH3 7HR 100 Provision of financial services
First Mortgage Limited 30 Walker Street, Edinburgh, EH3 7HR 100 Provision of financial services
Property Law Centre Limited 30 Walker Street, Edinburgh, EH3 7HR 100 Provision of financial services
Mortgage Advice Bureau Australia (Holdings) PTY limited Norton Rose Fulbright, Level 18, 225 George Street, Sydney, NSW 2000, 100 Intermediate holding company
Australia
Mortgage Advice Bureau PTY Limited Norton Rose Fulbright, Level 18, 225 George Street, Sydney, NSW 2000, 100 Holding of intellectual property
Australia
Vita Financial Limited 1st Floor Tudor House, 16 Cathedral Road, Cardiff, CF11 75 Provision of financial services
9LJ
BPR Protect Limited 1st Floor Tudor House, 16 Cathedral Road, Cardiff, CF11 75 Provision of financial services
9LJ
Company Protection Limited 1st Floor Tudor House, 16 Cathedral Road, Cardiff, CF11 56.3 Provision of financial services
9LJ
Aux Group Limited Capital House, Pride Place, Derby, England, DE24 8QR 75 Provision of financial services
Auxilium Partnership Limited Capital House, Pride Place, Derby, England, DE24 8QR 75 Provision of financial services
Project Finland Topco Limited 102 Rivington House Chorley New Road, Horwich, Bolton, 84.3 Intermediate holding company
England, BL6 5UE
Project Finland Bidco Limited 102 Rivington House Chorley New Road, Horwich, Bolton, 84.3 Intermediate holding company
England, BL6 5UE
The Fluent Money Group Limited 102 Rivington House Chorley New Road, Horwich, Bolton, 84.3 Intermediate holding company
England, BL6 5UE
Fluent Mortgages Holdings Limited 102 Rivington House Chorley New Road, Horwich, Bolton, 84.3 Intermediate holding company
England, BL6 5UE
Fluent Mortgages Limited 102 Rivington House Chorley New Road, Horwich, Bolton, 84.3 Provision of financial services
England, BL6 5UE
Fluent Mortgages Horwich Limited 102 Rivington House Chorley New Road, Horwich, Bolton, 84.3 Provision of financial services
England, BL6 5UE
Fluent Lifetime Limited 102 Rivington House Chorley New Road, Horwich, Bolton, 84.3 Provision of financial services
England, BL6 5UE
Fluent Money Limited 102 Rivington House Chorley New Road, Horwich, Bolton, 84.3 Provision of financial services
England, BL6 5UE
Fluent Loans Limited 102 Rivington House Chorley New Road, Horwich, Bolton, 84.3 Provision of financial services
England, BL6 5UE
Fluent Bridging Limited 102 Rivington House Chorley New Road, Horwich, Bolton, 84.3 Provision of financial services
England, BL6 5UE
Mortgage Advice Bureau (UK) Limited Capital House, Pride Place Pride Park, Derby, DE24 8QR 100 Dormant
Mortgage Advice Bureau (Bristol) Limited Capital House, Pride Place Pride Park, Derby, DE24 8QR 100 Dormant
MAB (Derby) Limited Capital House, Pride Place Pride Park, Derby, DE24 8QR 100 Dormant
L&P 134 Limited Capital House, Pride Place Pride Park, Derby, DE24 8QR 100 Dormant
L&P 137 Limited Capital House, Pride Place Pride Park, Derby, DE24 8QR 100 Dormant
Mortgage Talk (Partnership) Limited Capital House, Pride Place Pride Park, Derby, DE24 8QR 100 Dormant
Financial Talk Limited Capital House, Pride Place Pride Park, Derby, DE24 8QR 100 Dormant
Survey Talk Limited Capital House, Pride Place Pride Park, Derby, DE24 8QR 100 Dormant
Loan Talk Limited Capital House, Pride Place Pride Park, Derby, DE24 8QR 100 Dormant
MAB1 Limited Capital House, Pride Place Pride Park, Derby, DE24 8QR 100 Dormant
MAB Private Finance Limited Capital House, Pride Place Pride Park, Derby, DE24 8QR 100 Dormant
MAB Financial Planning Limited Capital House, Pride Place Pride Park, Derby, DE24 8QR 100 Dormant
First Mortgage Shop Limited 30 Walker Street, Edinburgh, EH3 7HR 100 Dormant
First Mortgages Limited 30 Walker Street, Edinburgh, EH3 7HR 100 Dormant
Fresh Start Finance Limited 30 Walker Street, Edinburgh, EH3 7HR 100 Dormant
In accordance with Section 479A of the Companies Act 2006, Mortgage Advice
Bureau (Holdings) plc is providing an audit exemption to the following
subsidiaries for the year ending 31 December 2024:
Company Name Company Registration Number
MABWM Limited 07090185
Mortgage Talk Limited 03571948
Talk Limited 05337682
First Mortgage Limited SC177681
Property Law Centre Limited SC348791
Project Finland Bidco Limited 09960083
The Fluent Money Group Limited 09774736
Fluent Mortgages Holdings Limited 06763065
Fluent Mortgages Limited 05962939
Fluent Mortgages Horwich Limited 14127588
Fluent Lifetime Limited 11226852
Fluent Loans Limited 06890680
Fluent Bridging Limited 13198365
Company Protection Limited 14990690
Associates and joint ventures Percentage of
ordinary shares held (effective holding)
Company Name Registered Address Nature of business
CO2 Commercial Limited Profile House, Stores Road, Derby, DE21 4BD 49 Property surveyors
Sort Group Limited Burdsall House, London Road, Derby DE24 8UX 43.25 Conveyancing services
Buildstore Limited NSB & RC Lydiard Fields, Great Western Way, Swindon SN5 8UB 25 Provision of financial services
Clear Mortgage Solutions Limited 114 Centrum House, Dundas Street, Edinburgh EH3 5DQ 49 Provision of financial services
MAB Broker Services PTY Limited Level 5, 2 Elizabeth Plaza, North Sydney, NSW 2060 48.05 Provision of financial services
The Mortgage Broker Group Limited Prospect House 1, Prospect Place, Derby, DE24 8HG 25 Provision of financial services
Meridian Holdings Group Limited 68 Pullman Road, Wigston, Leicester, LE18 2DB 40 Provision of financial services
Evolve FS Ltd Unit 26-28 Brightwell Barns, 49 Waldringfield Road, Brightwell, Ipswich, 49 Provision of financial services
Suffolk, IP10 0BJ
Heron Financial Limited Moor Park Golf Club, Moor Park, Rickmansworth, Hertfordshire, England, WD3 1QN 49 Insurance agent and broker
M&R FM Ltd 14 Kensington Terrace, Gateshead, NE11 9SL 37 Provision of financial services
Dashly Limited 22 Charterhouse Square, London, England, EC1M 6DX 18.9 Technology platform
The reporting date for the Group's associates, as listed in the table above,
other than Clear Mortgage Solutions Limited, MAB Broker Services PTY Ltd, and
Dashly Limited is 31 December and their country of incorporation is England
and Wales. The reporting date for Clear Mortgage Solutions Limited is 30
December and its country of incorporation is England and Wales. The reporting
date for the Group's joint venture, MAB Broker Services PTY Limited, is 30
June and its country of incorporation is Australia. The reporting date for
Dashly Limited is 27 February and its country of incorporation is England and
Wales.
Glossary of Alternative Performance Measures (APMs) for the Group's annual
report
and financial statements
Certain numerical information and other amounts and percentages presented have
been subject to rounding adjustments. Accordingly, in certain instances, the
sum of the numbers in a column or a row in tables may not conform exactly to
the total figure given for that column or row or the sum of certain numbers
presented as a percentage may not conform exactly to the total
percentage given.
Closest equivalent
APM statutory measure Definition and purpose
Income statement measures
Administrative expenses ratio None Calculated as administrative expenses (which exclude amortisation of acquired
intangible assets, acquisition costs incurred in the year and non- cash
operating expenses relating to put and call option agreements) divided
by revenue.
Adjusted EBITDA None Calculated as EBITDA before charges associated with acquisition and
investments, and other adjusting items that the Group deems, by their nature,
require adjustment in order to show more accurately the underlying business
performance of the Group from period to period in a consistent manner.
Charges associated with acquisition or investments in businesses include:
• non-cash charges such as amortisation of acquired intangible assets and
the effect of fair valuation of acquired assets,
• non-cash operating expenses relating to put and call option agreements and
cash charges including transaction costs,
• fair value movements on deferred and contingent consideration, and
• fair value movements on derivative financial instruments.
£m 2024 2023
Gross profit 81.9 70.2
Administrative expenses (50.5) (46.7)
Depreciation 1.9 2.1
Amortisation of other intangible assets 0.5 0.3
Share of profit from associates 1.3 0.8
Adjusted EBITDA 35.1 26.7
Adjusted EBITDA margin None Calculated as Adjusted EBITDA divided by revenue.
Adjusted operating profit Operating profit Calculated as operating profit before charges associated with acquisition and
investments, and other adjusting items that the Group deems, by their nature,
require adjustment in order to show more accurately the underlying business
performance of the Group from period to period in a consistent manner.
Charges associated with acquisition or investments in businesses include:
• non-cash charges such as amortisation of acquired intangible assets and
the effect of fair valuation of acquired assets,
• non-cash operating expenses relating to put and call option agreements and
cash charges including transaction costs,
• fair value movements on deferred and contingent consideration, and
• fair value movements on derivative financial instruments.
£m 2024 2023
Operating profit 24.7 14.0
Amortisation of acquired intangible assets 5.2 5.2
Acquisition costs 0.1 0.2
Non-cash operating expenses relating to put 2.7 4.3
and call option agreements
Non-cash fair value losses on financial - 0.2
instruments
Restructuring costs - 0.5
Adjusted operating profit 32.7 24.4
Adjusted profit before tax Profit before tax Calculated as profit before tax before charges associated with acquisition and
investments, and other adjusting items that the Group deems, by their nature,
require adjustment in order to show more accurately the underlying business
performance of the Group from period to period in a consistent manner.
Charges associated with acquisition or investments in businesses include:
• non-cash charges such as amortisation of acquired intangible assets and
the effect of fair valuation of acquired assets,
• non-cash operating expenses relating to put and call option agreements and
cash charges including transaction costs,
• fair value movements on deferred and contingent consideration, and
• fair value movements on derivative financial instruments.
£m 2024 2023
Profit before tax 22.9 16.2
Amortisation of acquired intangible assets 5.2 5.2
Acquisition costs 0.1 0.2
Non-cash operating expenses relating to put
and call option agreements 2.7 4.3
Non-cash fair value losses on financial
instruments - 0.2
Restructuring costs - 0.5
Unwinding of redemption liability 1.2 (3.3)
Rounding difference (0.1) (0.1)
Adjusted profit before tax 32.0 23.2
Adjusted tax expense Tax expense Calculated as tax expense before any tax impact of items adjusted in the
Adjusted profit before tax APM
£m 2024 2023
Tax expense 6.8 3.7
tax impact of:
Amortisation of acquired intangible assets 1.3 1.2
Acquisition costs 0.0 0.0
Restructuring costs - 0.1
Rounding difference - 0.1
Adjusted tax expense 8.1 5.1
Adjusted earnings Profit after tax Calculated as Adjusted profit before tax less Adjusted tax expense.
Attributable to:
2024 - £m Parent NCI Group
Adjusted profit before tax 30.4 1.6 32.0
Adjusted tax expense (7.7) (0.4) (8.1)
Adjusted earnings 22.7 1.2 23.9
Attributable to:
2023 - £m Parent NCI Group
Adjusted profit before tax 20.7 2.5 23.2
Adjusted tax expense (3.7) (1.4) (5.1)
Adjusted earnings 17.0 1.1 18.1
Adjusted profit before tax (exc. Software Profit before tax Calculated as Adjusted profit before tax with the Software Development costs
(relating to Midas Platform) capitalised during the year reversed and charged
Capex)
to the income statement.
£m 2024 2023
Adjusted Profit before tax 32.0 23.2
Capitalised development costs (1.4) -
Amortisation of development costs 0.1 -
Adjusted profit before tax (exc. software
capex) 30.7 23.2
Adjusted profit before None Calculated as Adjusted profit before tax divided by revenue
tax margin
Adjusted earnings per share Basic earnings per share Calculated as basic earnings per share before charges (net of tax) associated
with acquisition and investments, and other adjusting items that the Group
deems, by their nature, require adjustment in order to show more accurately
the underlying business performance of the Group from period to period in a
consistent manner. See note 7 for further details.
Adjusted diluted earnings per share Diluted earnings per share Calculated as diluted earnings per share (basic EPS, adjusting for the effects
of potentially dilutive share options) before charges (net of tax) associated
with acquisition and investments, and other adjusting items that the Group
deems, by their nature, require adjustment in order to show more accurately
the underlying business performance of the Group from period to period in
a consistent manner. See note 7 for further details.
Adjusted diluted earnings per share (exc. Diluted earnings per share Calculated as adjusted diluted earnings per share with the Software
Development costs capitalised during the year reversed and charged to the
Software Capex Spend)
income statement.
Cash flow measures
Adjusted cash generated None Adjusted cash generated is cash generated from operating activities adjusted
for movements in non-trading items, including loans to AR firms and
associates, cash transaction costs, and increases in restricted cash balances
as a percentage of adjusted operating profit.
£m 2024 2023
Cash generated from operating activities 38.6 29.7
Acquisition costs 0.1 0.2
Restructuring costs - 0.5
Increase in loans to AR firms and associates 1.1 (0.8)
Increase in restricted cash balances (0.6) (0.7)
Rounding differences - 0.1
Adjusted cash generated 39.2 29.0
Adjusted cash None Adjusted cash conversion is adjusted cash generated as a percentage of
conversion adjusted operating profit
Balance sheet measures
Net debt None Loans and borrowings less unrestricted cash balances.
Leverage None Net Debt divided by Adjusted EBITDA, expressed as a multiple
Glossary of terms
AI Artificial Intelligence
Appointed Representative, AR, or AR firm An intermediary firm or person who is party to an agreement with a FCA
regulated firm permitting them to carry out certain regulated activities
AR Agreement Agreement governing the terms of the commercial relationship between MAB and
an AR firm, and setting out how income from products sold by Advisers of the
AR is split between MAB and the AR
Adviser A person employed or engaged by an AR firm, carrying out mortgage and/or
general or protection insurance advisory services to customers
Base Rate The Bank of England base rate is the interest rate that the Bank of England
charges banks for secured overnight lending. It is the UK Government's key
interest rate for enacting its monetary policy
Bridging Finance Short-term borrowing used to bridge a gap in funding until a property
transaction completes
Clawbacks The right of insurers to reclaim some or all of the commission paid to an
intermediary in the event premiums are not paid by the policy holder in the
period during which the policy holder pays monthly premiums, typically 48
months for protection products for MAB
Client fee A fee paid by the customer to the intermediary who has arranged the consumer's
mortgage with a lender
Consumer Duty The policy statement published by the FCA in July 2022, which aims to set
higher and clearer standards of consumer protection
Corporate Social Responsibility A type of business self-regulation that aims to contribute to societal goals
by engaging in or supporting ethically-oriented practices (e.g. fundraising
for charity)
Directly Authorised An entity that is directly authorised by the FCA to carry out regulated
activities
ESG Environmental, Social and Governance
Execution only Refers to a customer entering into a regulated mortgage contract without being
given advice, or where the advice given by a firm has been rejected. This is
effectively a self-service process
FCA Financial Conduct Authority
FSCS The Financial Services Compensation Scheme is the UK's statutory deposit
insurance and investors compensation scheme for customers of authorised
financial services firms
FTB First Time Buyer
GDPR The General Data Protection Regulation, a regulation in EU law on data
protection and privacy
General insurance Buildings and contents insurance and certain other non-life insurance products
but excluding protection
Gross mortgage lending New mortgage lending and product transfers
Help-to-Buy UK Government incentives that aim to help first time buyers and those looking
to move homes purchase a residential property. Help-to-Buy schemes include
Equity Loans and Shared Ownership schemes
Intermediary, intermediary firm, or mortgage intermediary A firm or individual who arranges mortgages with lenders on behalf of
customers, (as opposed to a lender that the customer approaches directly). An
intermediary is either directly authorised by the FCA or is an appointed
representative of a directly authorised firm
IMLA The Intermediary Mortgage Lenders Association is a trade association that
represents the views and interests of UK mortgage lenders who are involved in
the generation of mortgage business via professional financial intermediaries
Insurance or insurance products Includes protection and general insurance
IR35 The UK's anti-avoidance tax legislation designed to tax disguised employment
at a rate similar to employment
Later Life Lending Refers to mortgage products aimed at those approaching or already in
retirement, who are looking to release some of the equity in their home for a
variety of reasons
Lifetime Mortgage A type of Later Life Lending whereby no capital or interest repayments are
made. Compounded interest is added to the capital throughout the term of the
loan, which is then repaid by selling the property when the borrower dies or
moves out
Mortgage Advice and Selling Standards Policy statement issued by the FCA in February 2020 which sets out a package
of remedies aiming to help consumers make better informed choices with regard
to mortgages
Mortgages Market Study Market study conducted by the FCA in 2019 as a precursor to the Mortgage
Advice and Selling Standards policy statement
Mortgage panel or lender panel A panel of mortgage lenders used by intermediaries
New build Encompasses properties built by developers, custom build, self-build and
affordable housing
New mortgage lending Lending resulting from a mortgage completion in connection with a house
purchase or a re-mortgage with a different lender to the customer's existing
lender
PCW Price Comparison Website
PPC Pay-Per-Click
Procuration fee, or Mortgage procuration fee A fee paid by a lender to the intermediary who has arranged a mortgage with
the lender
Product transfer The process of switching an existing mortgage product to a new one with the
same lender
Protection insurance Life insurance (including critical illness), family income protection and
certain other insurance products (but excluding general insurance)
Secured Personal Loan A loan that uses a property as security, also known as second charge mortgage
Service centres or telephone centres MAB's regional telephone service centres operated by certain AR firms. The
services provided by these centres include reviews of mortgage and related
insurance products on an on-going basis with replacement or new products
offered to customers, as appropriate
SM&CR The Senior Manager and Certification Regime, a regime that aims to raise
standards of governance, increase individual accountability and help restore
confidence in the financial
services sector
1 (#_ftnref1) Based on first charge mortgage completions, secured personal
loans (second charge mortgages), later life lending mortgages and bridging
finance.
2 (#_ftnref2) Excludes directly authorised advisers, later life advisers
without a mortgage and protection license, and advisers in the process of
being onboarded who are not yet able to trade.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
. END FR EAEDPFLPSEEARecent news on Mortgage Advice Bureau (Holdings)
See all newsREG - Mortgage Adv. Bureau - Directors' Shareholdings and PDMR notification
AnnouncementREG - Mortgage Adv. Bureau - Grant of Options, PDMR Dealing and TVR
AnnouncementREG - Mortgage Adv. Bureau - Notice of AGM
AnnouncementREG - Mortgage Adv. Bureau - Holding(s) in Company
AnnouncementREG - Mortgage Adv. Bureau - Director/PDMR Shareholding
Announcement