Mortgage Choice’s Shares Fall after adjusting its FY 2019 Earning Guidance

  • Dec 13, 2018 AEDT
  • Team Kalkine
Mortgage Choice’s Shares Fall after adjusting its FY 2019 Earning Guidance

The mortgage broking service provider Mortgage Choice Limited’s (ASX: MOC) shares went down by 6.4 percent on 13 December 2018 after the company released its FY 2019 earning guidance.

Earlier at the time of announcing the FY 2018 results, Mortgage Choice expected that its FY19 Cash NPAT would be around $16.5 million. However, in the recently held Annual General Meeting (AGM), the company highlighted that the brokers were experiencing a longer time for procession loan application because of the tightening lending policies.

Now with the slowing property market, the company has gained more clarity on the impact of these conditions on its FY 2019 settlements as the Company moved through the first six months of FY 2019.

The company is expecting that in FY 2018 its home lone settlement will be 10 percent lower than the FY 2018 settlements. The fall in the settlement will result in reducing the commission revenue, and it will also affect the corresponding flow of other revenue lines. As a result of these falls, the company has adjusted its guidance for FY 2019 Cash NPAT to be in between $14 and $15 million.

Further, the company also reported that it has made significant progress on its companywide change program for building the platform for growth and long-term sustainability of the company’s business. Mortgage Choice is on track to achieve a 10 percent reduction in its operating cash expense base for FY 2019 as compared to FY 2018. The company also informed that it has successfully implemented the new broker remuneration model and all the franchisees have moved onto the new broker software platform from the November month of 2018.

The new broker remuneration model was launched on 12 July 2018, and it was focused to ensure that the company is having a sustainable and strong platform for growth over the long term. The new broker remuneration model was implemented to increase the settlement volumes and market share over the medium to long-term.

In FY 2018, the company reported a cash net profit after tax result of $23.4 million, which was 3.3% higher than FY 2017. The funds Under Advice was $733 million, and premiums in force were $28 million. The gross revenue of the company increased by 10 percent and the net profit increased by 116 percent in FY 2018 as compared to FY 2017.  In October, the company appointed highly experienced Mr. Ian Parkes as the new Chief Financial Officer (CFO) to strengthen the company’s executive team.

Meanwhile, the share price of the company fell by 21.26 percent in the last six months as on 12 December 2018 and traded at a PE ratio of 34.850x. MOC’s shares traded at $1.110 with a market capitalization of circa $148.12 million as on 13 December 2018.


Disclaimer

This website is a service of Kalkine Media Pty. Ltd. A.C.N. 629 651 672. The website has been prepared for informational purposes only and is not intended to be used as a complete source of information on any particular company. Kalkine Media does not in any way endorse or recommend individuals, products or services that may be discussed on this site. Our publications are NOT a solicitation or recommendation to buy, sell or hold. We are neither licensed nor qualified to provide investment advice.

 

All pictures are copyright to their respective owner(s).Kalkinemedia.com does not claim ownership of any of the pictures displayed on this website unless stated otherwise. Some of the images used on this website are taken from the web and are believed to be in public domain. We have used reasonable efforts to accredit the source (public domain/CC0 status) to where it was found and indicated it below the image.

 

There is no investor left unperturbed with the ongoing trade conflicts between US-China and the devastating bushfire in Australia.

Are you wondering if the year 2020 might not have taken the right start? Dividend stocks could be the answer to that question.

As interest rates in Australia are already at record low levels, find out which dividend stocks are viewed as the most attractive investment opportunity in the current scenario in our report.

CLICK HERE FOR YOUR FREE REPORT!
   
x
We use cookies to ensure that we give you the best experience on our website. If you continue to use this site we will assume that you are happy with it. OK