Mortgage Advice Bureau H1 Earnings Call Highlights

Key Points

• First-half performance improved: Mortgage Advice Bureau’s lending rose 16% to £16.5 billion, revenue increased 8.6% to £161 million and adjusted profit before tax grew 2.1% to £14.8 million. Growth was driven by refinancing and product transfers, which generate less revenue than purchase lending and pressured margins.
• Full-year expectations were reset: Delays in digital-partner integrations reduced expected lead volumes at Fluent, leaving the business with about £1.5 million in unused costs. The company now guides to full-year adjusted profit before tax of approximately £38 million.
• Capital returns and strategic investment continue: The board raised the interim dividend by about 10% to 7.9 pence per share and completed a £2.8 million buyback. Management is also investing in acquisitions, technology and AI while reorganizing Fluent and other businesses to support future growth.

Mortgage Advice Bureau LON: MAB1 reported higher first-half lending, revenue and adjusted profit before tax, although a shift toward lower-revenue refinancing products and delayed digital lead-generation initiatives prompted the company to reset expectations for the full year.

For the six months to June, total mortgage lending rose 16% to £16.5 billion. Revenue increased 8.6% to £161 million, while adjusted profit before tax increased 2.1% to £14.8 million. The company’s share of new mortgage lending was unchanged at 8.2%, while its share of product transfers increased by 10 basis points to 3.2%.

Head of Investor Relations Mark Irvine-Fortescue said first-half activity was led by refinancing, particularly product transfers, in which customers remain with their existing lenders. While this supported lending volumes, it produced less revenue than purchase lending and created pressure on margins.

Refinancing Drives Volume Mix

Purchase lending at Mortgage Advice Bureau declined 1% during the period, compared with a 2% decline in the wider market. The comparison followed a prior-year period that benefited from activity ahead of stamp-duty changes. Remortgage lending rose 29%, in line with the market, while product transfers increased 44%, ahead of the market’s 40% growth.

The company said mortgage pricing volatility, uncertainty around inflation and the outlook for borrowing costs had weighed on purchase activity. It also said market conditions softened during July and August and that uncertainty could continue to constrain near-term purchase lending.

However, the group expects refinancing opportunities to build. Brodnicki said product-end-date maturities in 2027 are expected to be around 30% higher than in 2026, with the 2028 pipeline also building. He said the company’s outlook assumptions are based on a flat housing market of about 1.1 million transactions.

Chief Financial Officer Jo Stent said gross profit rose 15.6% to £47.4 million, and gross margin increased 1.7 percentage points to 29.4%. The margin improvement primarily reflected acquired invested businesses, which operate at higher gross margins than the company’s appointed representative network. The refinancing mix and a slower-than-anticipated revenue ramp-up at Fluent limited further expansion.

Adjusted administrative expenses rose 21.6% to £32.5 million, reflecting the consolidation of recent acquisitions and investment to support growth and activity levels. Diluted adjusted earnings per share increased 1.1% to 18.4 pence.

Fluent Delays Contribute to Reset

Chief Executive Peter Brodnicki said he was disappointed that the company had needed to reset expectations and acknowledged that it could have provided a more cautious outlook in its July statement.

He said the group had expected a material increase in mortgage leads at Fluent, its centralized telephone-based mortgage operation, from major digital partners. Although contracts had been signed in all but one case, partners delayed integrations or redirected resources because of economic pressures and artificial-intelligence priorities, he said.

Brodnicki described the delays as a postponement rather than a loss of opportunity. One lead source has begun to contribute, while the final unsigned contract is expected to be completed in the coming weeks. Other partners are expected to prioritize information-technology integration in the fourth quarter, with one potentially not beginning until early 2027.

Fluent is expected to generate more than £6 million in profit this year, Brodnicki said, but not exceed last year’s result because the business incurred costs to prepare for mortgage lead volumes that did not arrive as planned. The group estimates that Fluent currently carries about £1.5 million of unutilized costs.

Mortgage Advice Bureau plans to transfer Fluent’s mortgage arm into First Mortgage, one of its largest invested businesses. Brodnicki said the move will place Fluent’s approximately 50 advisers within a group of 300 brokers, offering greater flexibility to absorb lead volumes. Fluent will retain its specialist second-charge and bridging operations.

The company has adopted a more cautious approach to Fluent in its 2027 planning, budgeting for £2 million to £2.5 million of additional profit contribution despite potential upside from planned lead flows.

Capital Position and Shareholder Returns

Mortgage Advice Bureau reported net debt of £15.1 million, equivalent to leverage of 0.4 times. Cash conversion was 98%, while free cash flow declined to £11.8 million from £14.6 million a year earlier, reflecting a performance-related bonus, an upfront commercial incentive for a major appointed representative firm and £2.1 million of costs associated with the company’s move to the main market.

The board declared an interim dividend of 7.9 pence per share, up about 10% from the first half of 2025. During the period, the group invested £5.5 million in technology, digital marketing and customer acquisition, spent £4.1 million on acquisitions and deferred consideration, and completed a £2.8 million share buyback.

Stent said the group had received indicative support to increase its revolving credit facility to £35 million from £15 million. The company expects near-term commitments related to existing investments of about £3 million in the remainder of 2026, £1.5 million in 2027 and up to £8 million in 2028. A £7 million term loan matures in spring 2027.

Technology, Brand and AI Strategy

The company plans to introduce an “MAB” brand transition in November, alongside a refreshed appointed representative model and a franchise model. Brodnicki said the franchise structure would require firms to align more closely with Mortgage Advice Bureau’s systems and processes, potentially improving productivity and performance.

The group is also consolidating its invested businesses into two larger groups, including a new-build group and a group centered on First Mortgage. Brodnicki said it has appointed a chief digital and information officer and a new chief marketing officer as it increases its focus on data, technology, artificial intelligence and customer acquisition.

Management said it is testing AI tools to engage and triage customers before they reach advisers, including within estate agency, new-build and digital lead channels. Brodnicki said the company believes AI can improve customer engagement, adviser efficiency and lead generation, while also allowing the group to support some customers who may prefer a direct-to-lender route.

Stent said the company’s revised guidance implies adjusted profit before tax of £38 million for the full year. She cited a more comparable second-half trading backdrop, expected additional contribution from acquisitions and conservative assumptions for adviser productivity and administrative expenses.

About Mortgage Advice Bureau (LON:MAB1)

MAB is a leading UK property finance platform that connects customers, advisers, lenders, and insurers throughout the homeownership journey. Through its scalable, technology-driven intermediary model, MAB delivers personalised mortgage and protection advice via its proprietary platform, supported by deep customer insight and a data-rich, digitally enabled framework. Through its partner firms, known as Appointed Representatives (ARs), MAB has over 2,100 advisers providing expert advice across mortgages, specialist lending, protection and general insurance products.

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