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MarketScreener Homepage  >  Equities  >  Australian Stock Exchange  >  Mortgage Choice Limited    MOC   AU000000MOC5

MORTGAGE CHOICE LIMITED

(MOC)
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Mortgage Choice : MOC) has today announced its financial results for the six months ending 31 December 2019.

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02/19/2020 | 04:38pm EDT

February 20, 2020

Mortgage Choice Limited (MOC) has today announced its financial results for the six months ending
31 December 2019.

Financial highlights for the period include:

  • NPAT on an IFRS basis of $4.0m
  • NPAT on a cash basis of $5.5m; NPAT on a cash adjusted basis of $6.1m
  • $5.0 billion settled home loans, up 22% on 2H19
  • Total loan book of $54.3 billion, holding steady on 2H19
  • Financial planning Funds Under Advice up 30% from 1H19 to $1.1 billion
  • Financial planning insurance Premiums In Force of $31.2 million, up 8% from 1H19
  • Cash earnings per share of 4.4 cents
  • Interim fully franked dividend of 3 cents per share
  • Mortgage Choice Chief Executive Officer, Susan Mitchell said the period saw improving market
    conditions and early benefits from the Company's investments for growth.

'The interim results reflect a turnaround in the nation's housing market and are in line with
expectations. We have seen a steady increase in the volume of applications and approvals and despite
settlements being down slightly on the previous corresponding period, they were up 22% on the six
months to 30 June 2019.

'Following the investment made in our broker remuneration model and technology platforms in FY19,
we are starting to see regeneration of our broker network with an improved rate of growth in new
brokers joining the network. We have also seen an improvement in productivity as a part of this
activity, enabling our network to operate more efficiently and dedicate more time to customer
interaction.

'The industry has experienced significant regulatory change and uncertainty in recent times related
to declining credit growth and uncertain economic conditions. This was exacerbated by a prolonged
drought and, more recently, a devastating bushfire season. However, the turnaround in the housing
market in the second half of 2019 has continued into 2020 and I believe we are well-positioned to take
advantage of this new environment as we focus on building a long-term, sustainable business.'

Mortgage Broking Industry remains robust
Demand for mortgage broking continues to be strong with 55% of home loans originated from brokers
during the quarter ended 30 September 2019. This was down from the heights of nearly 60% in the
first quarter of 2019, due to a decline in investment lending.

The national housing market is recovering and gathering momentum, albeit in a tightened lending
environment, reducing borrowing capacity for Australian consumers. Australia's house value rebound
has continued into 2020 with the CoreLogic National Home Value Index up by 0.9% in January. This
now places the annual growth rate at 4.1%, the fastest rate of growth for a twelve-month period since
December 2017. November 2019 saw the largest month-on-month rise since 2003, and since hitting
its low in June 2019, the national dwelling index has recovered by 6.7%.

Regulatory change
With Best Interest Duty approaching on 1 July, Mortgage Choice welcomes these changes as they are
positive for consumers and aligned to its customer-centric business model. Readiness for the new
obligations will be a focus in the second half, having invested in its digital platform to ensure the broker
network is appropriately equipped to meet customer needs.

Mortgage Choice Financial Planning reaches $1bn in FUA
The Company's financial planning business continues to grow with Premiums In Force up by 8% and
Funds Under Advice by 30% half-on-half to $1.1 billion. With the appointment of a new Chief Advice
Officer, Dean Thomas, the business is well placed to build on this momentum and deliver growth in
this business line.

Dividend
Mortgage Choice will pay a fully franked half-year dividend of three cents on the 17th of April 2020
consistent with the two previous periods.

Outlook
In the second half, Mortgage Choice will continue its focus on attracting high-quality brokers and
advisors to its franchise network, while investing further in its IT systems and brand. Targeted
recruitment activity is showing early signs of success with the network stabilising, and its digital
strategy beginning to improve lead activity. The business will also actively ensure network readiness
for the rollout of forthcoming new legislation with attention on core business processes and
maintaining robust frameworks.

'We are confident we can continue to regenerate the broker network and build scale in our financial
planning business. We will be implementing a new brand strategy to strengthen customer appeal,
backed by further enhancements to the customer experience. We have recently re-launched a white
label offering on our lending panel providing a branded solution for our network to offer our
customers. These activities are all part of our ongoing journey towards building a resilient and
sustainable business that generates consistent growth and returns for shareholders over time,' added
Susan Mitchell.

Disclaimer

Mortgage Choice Limited published this content on 20 February 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 19 February 2020 21:37:27 UTC

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Financials
Sales 2020 168 M 120 M 120 M
Net income 2020 12,0 M 8,59 M 8,59 M
Net Debt 2020 - - -
P/E ratio 2020 7,20x
Yield 2020 6,94%
Capitalization 89,4 M 64,1 M 64,0 M
Capi. / Sales 2020 0,53x
Capi. / Sales 2021 0,55x
Nbr of Employees -
Free-Float 59,1%
Chart MORTGAGE CHOICE LIMITED
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Mortgage Choice Limited Technical Analysis Chart | MarketScreener
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Technical analysis trends MORTGAGE CHOICE LIMITED
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Income Statement Evolution
Consensus
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Mean consensus OUTPERFORM
Number of Analysts 1
Average target price 1,00 AUD
Last Close Price 0,72 AUD
Spread / Highest target 38,9%
Spread / Average Target 38,9%
Spread / Lowest Target 38,9%
EPS Revisions
Managers
NameTitle
Susan R. Mitchell Chief Executive Officer
Vicki Lee Allen Independent Non-Executive Chairman
Ian Parkes Chief Financial Officer
Vincent C. Ten Krooden GM-Technology & Head-Information Technology
Peter Gordon Higgins Non-Executive Director
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