Final Results and Board Changes

RNS Number : 5223I

Mortgage Advice Bureau(Holdings)PLC

26 March 2015

 

MORTGAGE ADVICE BUREAU (HOLDINGS) PLC

26 March 2015

Final Results for the year ended 31st December 2014 and Board Changes. 

Mortgage Advice Bureau (Holdings) PLC is pleased to announce its final results for the year ended 31 December 2014. 

Financial highlights

·      Revenue up 41% to £56.6m (2013: £40.1m)

·      Profit before exceptional items¹ and tax up 52% to £7.97m  (2013: £5.24m)

·      Strong profit to cash conversion² of 122% (2013: 101%)

·      Adjusted EPS^1,3 12.7p up 55% (2013: 8.2p³)

·      Proposed final stub⁴ dividend of  2.00p

·      Strong financial position with unrestricted net cash balances of £5.28 m (2013: £6.70m)

¹ Before IPO-related costs and provision against loan 

² Cash flow from operating and investing activities as a % of operating profit.

³ Adjusted EPS is based on 50.5m shares being in issue throughout in order to allow comparability

⁴ Period from listing on AIM on 14 November 2014 to 31 December 2014. 

Operational highlights

·      Adviser numbers up 22% to 634 at 31 December 2014 (2013 : 521)

·      Adjusted profit margin⁵ increased to 14.1% (2013: 13.1%)

·      Successful listing on AIM in November 2014

⁵ Net profit before tax and before IPO-related costs and provision against loan as a proportion of revenue  

Peter Brodnicki, Chief Executive commented: 

"I am pleased to report that despite the obvious time commitment by senior management that went into our successful listing on AIM in November, the Group enjoyed a record year in terms of both revenues and profits.

MAB's strategy is to deliver strong revenue growth and attractive returns to investors by continuing to expand its network and leverage its scalable model."

Board changes

Lucy Tilley ACA will join the Board on 5 May 2015  as Finance Director subject to regulatory approval, on which date Paul Robinson will resign from the Board.  Paul will remain as Company Secretary.

Peter Brodnicki, said: 

"At the time of the IPO we stated that we would be recruiting a full time Finance Director, and are delighted to announce the appointment of Lucy Tilley.  Lucy was most recently at Canaccord Genuity Limited where she was a director in the corporate broking team that worked with us on MAB's recent admission to AIM. Lucy qualified as a Chartered Accountant in 1996 with KPMG.  Her skills and experience strengthen the Board and we look forward to working with her." 

Outlook

2015 being an election year may inevitably generate some uncertainty for the economy generally. However, we are encouraged by the political consensus around the importance of the housing market to the UK economy.

Adviser numbers have continued to grow since the year end, in part due to the Group's expansion into Northern Ireland, further diversifying the Group's geographical revenue spread. The Group had 661 advisers at 20 March 2015.

The Board remains confident of delivering further growth in 2015, and building our position as both a leading UK consumer intermediary brand and a specialist Appointed Representative Network .

For further information please contact:

Mortgage Advice Bureau (Holdings) Plc	Tel: [phone]
Peter Brodnicki  - Chief Executive
David Preece  - Chief Operating Officer
Paul Robinson -  Finance Director
Canaccord Genuity Limited
Martin Green	Tel: [phone]
Peter Stewart

 Media enquiries:

Instinctif Partners
Nick Woods	Tel: [phone]

Strategic report - Chief Executive's review

Introduction

I am pleased to report that despite the obvious time commitment by senior management that went into our successful listing on AIM in November, the Group enjoyed a record year in terms of both revenues and profits.

Our strategy

Mortgage Advice Bureau's ("MAB") strategy is to deliver strong revenue growth and attractive returns to investors by continuing to expand its network and leverage its scalable model. The Group intends to deliver this strategy through:

• Increasing the number of advisers in existing Appointed Representatives ('ARs')

• Recruiting new ARs

• Further development of its client servicing via AR regional telephone centres

Our business model

MAB is directly authorised by the Financial Conduct Authority ("FCA") and operates an AR network which specialises in providing independent mortgage advice to customers, as well as advice on protection and general insurance products.

MAB seeks to develop long term strategic relationships with its AR firms so that there is a close alignment of interests.

Our proposition appeals most to multiple adviser firms with ambition to grow both their market share and business, with the MAB brand becoming an increasingly important USP that is adopted by a majority of our AR partners.

Under the MAB model almost all the advisers are engaged directly by the ARs themselves. However, MAB carries out all the compliance supervision on behalf of the AR firms, ensuring greater control and helping to achieve consistently high standards of consumer outcomes.

Relationships

The Group's performance and value to our shareholders is influenced by other stakeholders, principally our employees, our ARs (and their advisers), our customers and our suppliers. Our approach to all these parties is founded on the principle of open and honest dialogue, based on a mutual understanding of needs and objectives.

Our relationship with our ARs is fundamental to the success of MAB, and is based on that of a strategic business partner, with both parties benefiting from any improvement in the ARs

business performance.

Sector focus and specialisations

MAB has developed bespoke support services for intermediary firms that operate in specialist sectors such as estate agency, new build, mortgage shops and telephone based mortgage advice. These specialist sectors are typically rich in generating new customers and sales, and offer intermediaries the greatest opportunity to grow their businesses.

The Group has a broad geographic spread across the United Kingdom, with expansion into Northern Ireland having taken place in early 2015. Less than 10% of the Group's revenue is derived from the London market.

Products available through the Group

The Group's network offers advice on over 8,000 residential and buy-to-let mortgage products, including those that are only available through mortgage intermediaries.

The Group's network also offers advice on a range of both protection and general insurance products, which are sourced from a panel of insurers.

The Group generates revenue from 3 core areas which can be broken down as follows:

Proportion of Revenue	2014	2013
Insurance commission	41%	39%
Mortgage procuration fees	42%	44%
Client fees	16%	15%
Other income	1%	2%
Total	100%	100%

Proprietary Software

The Group has developed its own technology system that is the trading platform for the Group and its advisers. This system, MIDAS, is a significant USP of the Group, and has seen some major enhancements released in recent months ensuring the customer and adviser experience is further improved.

Protection is a key part of the advice process, and the most recent enhancements to MIDAS will ensure a far more visual and interactive customer experience which we expect to generate an increase in Insurance sales such as critical illness, income protection and life insurance.

Market trends favour Intermediaries

Market recovery

In 2014 the UK mortgage market exceeded £200 billion of gross lending for the first time since 2008. Between 2009 and 2012 gross lending varied between £135bn and £145bn per annum. 2013 saw a rise of 23% over 2012 to £179bn, whilst 2014 showed a further rise of 14% to £204bn. In December 2014 the Council for Mortgage Lenders were forecasting further increases to £222bn in 2015 and £240bn for 2016.

Whilst bank base rates are not expected to rise in the near future, rate rises will be inevitable at some point in the economic cycle.

Although the bank base rate has stayed at 0.5% for 6 years, mortgage pay rates have been falling, with fixed rates now at record low levels, with some lenders indicating that further cuts are unlikely. This makes it an opportune time for borrowers to consider remortgaging, with the mortgage intermediary in an ideal position to review the options available to their customers.

Customer reviews are a key focus for MAB, and with fixed rate mortgages at such incredibly low levels, we see the remortgage market as a major opportunity.

The government remains committed to growth in housing stock and, to further support this policy, as recently as February 2015 it was announced that a discount of up to 20% was being offered to certain first time buyers, and in the March 2015 budget a 'help to buy' ISA was announced.  Housing is a core policy for all major political parties who all appear extremely committed to increasing housing stock and recognising the shortage of affordable homes.

Industry trends

Around 62% of UK mortgage transactions (excluding buy to let mortgages) were via an intermediary in 2014, up from around 55% in 2013. The share in the fourth quarter of 2014 was around 64%, and the Board expects this to grow further in 2015 with some industry commentators expecting it to grow to a 75% market share in the next few years.

Individual market sectors such as buy-to-let, first time buyers and remortgaging are performing strongly; intermediaries enjoy a larger than average share of these sectors.

Impact of Mortgage Market Review ("MMR")

Prior to MMR, customers could obtain mortgages directly from some lenders without receiving full advice. This typically took less time than a fully-advised service such as that provided through MAB. Following MMR, all mortgage sales (with the current exception of buy-to-let), including direct sales by lenders, must be made on a fully advised basis in order to comply with the FCA's requirements.

A customer who now wishes to secure a mortgage directly from a lender (and not an intermediary) may be required to repeat this more time consuming fully-advised process with each potential lender they visit. This enhances the attractiveness of the intermediary sector.

As MAB already provided a fully-advised service prior to the introduction of MMR, the Group's procedures were largely unaffected by the MMR changes.

How we performed

We measure the development, performance and position of our business against a number of key indicators.

http://www.rns-pdf.londonstockexchange.com/rns/5223I_-2015-3-26.pdf

Financial performance and future developments

Revenues

Revenues were up 41% to £56.6m (2013: £40.1m). A key driver of revenue is the average number of ARs in each financial year. Our business model attracts forward thinking ARs seeking to expand and grow their market share. Average adviser numbers increased by 19% to 581 (2013: 489) from a combination of the recruitment of new ARs, and the expansion of existing ARs.

Profit before exceptional items and tax

To facilitate a like-for-like comparison with prior years, the costs associated with the Company's admission to AIM in November 2014 and a one-off provision made during 2014 against a loan advanced in 2011 have been treated as exceptional costs when calculating adjusted profit before tax.

Profit before exceptional items and tax rose by 52% to £7.97m (2013: £5.24m) with the inherent scalability of MAB's model delivering a 52% increase in pre-exceptional, pre-tax profit compared with a 41% increase in revenue.

Margins

The gross profit margin fell slightly to 24.1% (2013: 25.9%). MAB has attracted, and continues to attract, ambitious ARs with actual or potential scale. Some existing ARs have achieved significant scale themselves by working alongside MAB. As the scale of an AR's business grows, the AR might be able to move to a higher commission tier which can lead to some margin erosion for the Group, and as a result we expect to see some further contraction in the gross profit margin. However, the increased revenue these growing ARs generate does leverage MAB's scalable business model and is expected to more than offset any margin erosion.

I am pleased to report that overheads as a percentage of revenue fell to 11.1% (2013: 14.3%). The Group's cost base is largely fixed in nature, and is expected to grow at a slower rate than revenue. Certain costs, primarily those relating to compliance, are closely correlated to the growth in the number of advisers, due to the requirement to maintain regulatory spans of control.

Overall, these factors resulted in an improvement in profit before exceptional items and tax as a percentage of revenue to 14.1% (2013: 13.1%).

 Net finance revenue

The Group's model is highly cash generative as our income is received before we pay our ARs. This results in a negative working capital requirement. Net finance revenues of £0.12m (2013: £0.25m) reflect continued low interest rates but are a useful additional revenue stream.

Profit before Tax

Unadjusted reported profit before tax increased to £6.88m (2013; £5.24m), an increase of 31%.

Taxation

The effective rate of taxation on profit before tax rose to 21.6% (2013: 20.8%) principally due to the costs of the AIM listing being disallowed for tax purposes, partly offset by reductions in the UK corporation tax rate.

Earnings per share and dividend

Adjusted EPS amounted to 12.69 pence. Comparison to 2013 is difficult as the share structure was significantly changed in preparation for the IPO. Had there been a similar number of ordinary shares in issue in 2013, adjusted EPS would have been 8.21 pence per share.

Basic EPS amounted to 9.63 pence. I am pleased to confirm a proposed final dividend for the year of 2.0p per share in respect of the period from Admission to AIM, amounting to a total of £1.01 million.

Cash flow

The Group's operations produce positive cash flow. This is reflected in the net cash inflow from operating activities of £7.96m (2013: £4.95m).

Net cash flow from operating and investing activities as a % of operating profit

2014                 122%

2013                 101%

2012                 65%

The Group's operations are capital light with our main investment being in computer equipment. The Group has a regulatory capital requirement amounting to 2.5% of regulated revenue. At the end of 2014 this regulatory capital requirement was £1.31 million. Only £0.14m of capital expenditure was required during the year (2013: £0.07m). Group policy is not to provide company cars, and no significant capital expenditure is foreseen in the coming year. All development work on MIDAS is treated as revenue expenditure.

The Group had no bank borrowings at 31 December 2014 (2013: £nil) with unrestricted bank balances of £5.3m (2013: £6.7m).

The following demonstrates how cash generated from operations was applied

Unrestricted bank balances at the beginning of the year	£6.7m
Cash generated from operating activities before IPO costs and loans advanced for commercial return	£8.9m
Interest received	£0.1m
Share issue	£0.1m
Repayment of loans advanced for commercial return	£1.4m
New loans advanced for commercial return	(£1.0m)
Taxes paid	(£1.5m)
Capital expenditure	(£0.1m)
Costs incurred in relation to IPO	(£0.7m)
Redemption of shares	(£4.6m)
Dividends paid	(£4.0m)
Unrestricted bank balances at the end of the year	£5.3m

The Group's emphasis is to reduce risk by spreading deposits over a number of institutions rather than to seek marginal improvements in returns.

Further information on Board Changes

Lucy Claire Tilley (nee Haythorn), age 43, was most recently a director in the corporate broking team at Canaccord Genuity Limited and was part of the team that worked on MAB's recent admission to AIM.  She is a chartered accountant having qualified with KPMG in 1996.  

Save as disclosed above and detailed below, there are no other details to be disclosed regarding Lucy Tilley's appointment as required under paragraph (g) of Schedule 2 of the AIM Rules.

Directorships held during the past five years

None

The following information is an extract from the audited financial statements.  See Note 19 for further information.

2014 Financial Statements

Consolidated statement of comprehensive income for the year ended 31 December 2014

	Note
		2014 £	2013 £
Revenue	3	56,577,613	40,066,719
Cost of sales	4	(42,932,390)	(29,684,918)
Gross profit		13,645,223	10,381,801
Administrative expenses		(6,257,174)	(5,745,335)
Share of profit of associates		458,074	344,573
Operating profit before exceptional costs		7,846,123	4,981,039
Exceptional costs	5	(1,093,944)	-
Operating profit		6,752,179	4,981,039
Finance income		124,066	254,094
Profit before tax		6,876,245	5,235,133
Tax expense	6	(1,485,042)	(1,090,644)
Profit for the year attributable to equity holders of parent company		5,391,203	4,144,489
Total comprehensive income attributable to equity holders of parent company		5,391,203	4,144,489
Earnings per share attributable to the owners of the parent
Basic	7	9.626p	5.924p
Diluted	7	9.588p	5.924p

Consolidated statement of financial position as at 31 December 2014

	Note	2014 £	2013 £
Assets
Non-current assets
Property, plant and equipment		204,228	176,832
Goodwill	9	4,114,107	4,114,107
Other intangible assets	9	45,118	63,165
Investments		252,766	198,743
Total non-current assets		4,616,219	4,552,847
Current assets
Trade and other receivables		3,265,224	3,698,180
Cash and cash equivalents	10	9,270,006	9,388,153
Total current assets		12,535,230	13,086,333
Total assets		17,151,449	17,639,180
Equity and liabilities
Equity attributable to owners of the parent
Share capital	13	50,510	69,960
Share premium		3,042,255	2,988,891
Capital redemption reserve		19,532	46
Share option reserve		10,553	-
Retained earnings		4,497,264	7,621,981
Total equity		7,620,114	10,680,878
Liabilities
Non-current liabilities
Provisions	11	750,679	588,783
Deferred tax liability	12	25,121	18,146
Total non-current liabilities		775,800	606,929
Current liabilities
Trade and other payables		8,252,905	5,805,437
Corporation tax liability		502,630	545,936
Total current liabilities		8,755,535	6,351,373
Total liabilities		9,531,335	6,958,302
Total equity and liabilities		17,151,449	17,639,180

Consolidated statement of changes in equity for the year ended 31 December 2014

	Share capital £	Share premium £	Capital redemption reserve £	Share option reserve £	Retained earnings £	Total Equity £
Balance at 1 January 2013	69,960	2,988,891	46	-	4,118,272	7,177,169
Profit for the year	-	-	-	-	4,144,489	4,144,489
Total comprehensive income	-	-	-	-	4,144,489	4,144,489
Transactions with owners
Dividends paid	-	-	-	-	(640,780)	(640,780)
Transactions with owners	-	-	-	-	(640,780)	(640,780)
Balance at 31 December 2013 and 1  January 2014	69,960	2,988,891	46	-	7,621,981	10,680,878
Profit for the year	-	-	-	-	5,391,203	5,391,203
Total comprehensive income	-	-	-	-	5,391,203	5,391,203
Transactions with owners
Share based payment transactions	-	-	-	10,553	-	10,553
Issue of new shares	36	53,364	-	-	-	53,400
Redemption of shares	(19,486)	-	19,486	-	(4,558,168)	(4,558,168)
Dividends paid	-	-	-	-	(3,957,752)	(3,957,752)
Transactions with owners	(19,450)	53,364	19,486	10,553	(8,515,920)	(8,451,967)
At 31 December 2014	50,510	3,042,255	19,532	10,553	4,497,264	7,620,114

 

Consolidated statement of cash flows  for the year ended 31 December 2014

Cash flows from operating activities
Profit for the year before tax		6,876,245	5,235,133
Adjustments for
Depreciation of property, plant and equipment		112,083	74,515
Profit on disposal of property, plant and equipment		-	(315)
Amortisation of intangibles		18,047	20,048
Share based payments		10,553	-
Share of profit of associates		(458,074)	(344,573)
Finance income		(124,066)	(254,094)
		6,434,788	4,730,714
Changes in working capital
Decrease/(increase)  in trade and other receivables		432,956	(740,747)
Increase in trade and other payables		2,447,419	1,687,956
Increase/(decrease) in provisions		161,896	(20,961)
Cash generated from operating activities		9,477,059	5,656,962
Income taxes paid		(1,521,373)	(709,190)
Net cash inflow from operating activities		7,955,686	4,947,772
Cash flows from investing activities
Purchase of property, plant and equipment		(139,479)	(112,537)
Proceeds from sale of property, plant and equipment		-	526
Acquisitions of associates and investments		(150)	(50,300)
Proceeds from disposal of associates		-	766
Dividends received from associates		404,250	245,367
Net cash inflow from investing activities		264,621	83,822
Cash flows from financing activities
Interest received		124,066
Redemption of shares		(4,558,168)
Issue of shares		53,400
Dividends paid		(3,957,752)
Net cash outflow from financing activities		(8,338,454)
Net (decrease)/increase in cash and cash equivalents		(118,147)
Cash and cash equivalents at the beginning of year		9,388,153
Cash and cash equivalents at the end of the year		9,270,006

Notes to the financial statements
for the year ended 31 December 2014

1.   Accounting policies

New Standards, interpretations and amendments not yet effective

The following new standards, interpretations and amendments which will or may have an effect on the Group, are effective for annual periods beginning on or after 1 January 2015 and have not yet been applied in preparing these financial statements. None of these new standards or interpretations are expected to have a material impact on the financial statements of the Group.

·      IFRS 9 will eventually replace IAS 39 in its entirety. However, the process has been divided into three main components (classification and measurement, impairment and hedge accounting). This standard becomes effective for accounting periods beginning on or after 1 January 2018.  Its adoption may result in changes to the classification and measurement of the Group's financial instruments, including any impairment thereof.

·   IFRS 15 'Revenue from Contracts with Customers' was issued by the IASB on 28 May 2014 and applies to an entity's first annual IFRS financial statements for a period beginning on or after 1 January 2017.It sets out the requirements for recognising revenue that apply to contracts with customers, except for those covered by standards on leases, insurance contracts and financial instruments.

·   Amendments to IFRS11 "Accounting for Acquisitions of Interests in Joint Operations" provides guidance on how to account for the acquisition of joint operations that constitute a business as defined in IFRS 3 Business Combinations. It is effective for accounting periods beginning on or after 1 January 2016.

·   Amendments to IAS 16 and IAS 38 "Clarification of Acceptable Methods of Depreciation and Amortisation". The amendment to IAS 16 prohibits entities from using a revenue-based depreciation method for items of property, plant and equipment. The amendment to IAS 38 introduces a rebuttable presumption that revenue is not an appropriate basis for amortisation of intangible assets. It is effective for accounting periods beginning on or after 1 January 2016.

Basis of consolidation

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.

De-facto control exists in situations where the company has the practical ability to direct the relevant activities of the investee without holding the majority of the voting rights. In determining whether de-facto control exists the company considers all relevant facts and circumstances, including:

-        The size of the company's voting rights relative to both the size and dispersion of other parties who hold voting rights

-        Substantive potential voting rights held by the company and by other parties

-        Other contractual arrangements

-        Historic patterns in voting attendance.

The consolidated financial statements present the results of the company and its subsidiaries ("the Group") 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 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.

Entities that are not subsidiaries but where the group has significant influence (i.e. the power to participate in the financial and operating policy decisions) are accounted for as associates.

The results and assets and liabilities of the associates are included in the consolidated accounts using the equity method of accounting.

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 at rates calculated to write off the cost of each asset on a straight line basis over its expected useful lives, as follows:

Fixtures and fittings        20%

Computer equipment      33%

Gains and losses on disposal are determined by comparing the proceeds with the carrying amount and are recognised in the income statement. The directors reassess the useful economic life of the assets annually.

Goodwill

Goodwill represents the excess of the cost of a business combination over, in the case of business combinations completed prior to 1 January 2011, the Group's interest in the fair value of identifiable assets, liabilities and contingent liabilities acquired. For business combinations completed after 1 January 2011, the goodwill represents the excess of a cost of a business combination over the Group's interest in the fair value of identifiable assets under IFRS 3 Business Combinations.

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.

Other intangible assets

Intangible assets other than goodwill acquired by the Group comprise licences and are stated at cost less accumulated amortisation and impairment losses. Amortisation is charged to statement of comprehensive income within administrative expenses on a straight line basis over the period of the licence agreements. Assets are tested annually for impairment or more frequently if events or circumstances indicate potential impairment.

Amortisation is provided on licences at 16.7% per annum, calculated to write off the cost of the asset on a straight line basis over its expected useful life.

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. Other non-financial assets are subject to impairment tests whenever events or changes in circumstances indicate that their 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.

Unquoted investments

Unquoted investments are shown at cost less provision for impairment.

Financial assets

The Group classifies its financial assets as loans or receivables. The classification depends on the purpose for which the financial assets were acquired. Loans and receivables are non-derivative financial assets with fixed or determinable payments which arise principally through the provision of services (e.g. trade receivables). These are recognised at original fair value cost, less appropriate provision for impairment.

The Group's loans and receivables comprise trade and other receivables and cash and cash equivalents in the consolidated statement of financial position.

Impairment provisions are recognised when there is objective evidence (such as significant financial difficulties on the part of the counterparty or default or significant delay in payment) that the Group will be unable to collect all of the amounts, the amount of such a provision being the difference between the net carrying amount and the present value of the future expected cash flows associated with the impaired receivable. For trade receivables, which are reported net; such provisions are recorded in a separate allowance account with the loss being recognised within administrative expenses 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.

Cash and cash equivalents

Cash and cash equivalents include cash in hand and deposits held at call with banks with an original maturity of three months or less.

Trade and other payables

Trade and other payables are recognised initially at fair value and subsequently carried at amortised cost.

Retirement benefits: Defined contribution schemes

Contributions to defined contribution pension schemes are charged to the consolidated statement of comprehensive income in the year to which they relate.

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

Revenue comprises commissions and fees receivable. Commissions are included at the gross amounts receivable by the Group in respect of all services provided. Commissions payable to trading partners in respect of their share of the commissions earned are included in cost of sales.

Commissions earned are accounted for when received, as until received it is not possible to be certain that the transaction will be completed. In the case of life commissions there is a possibility for a period after the inception of the policy that part of the commission earned may have to be repaid if the policy is cancelled during this period. A provision is made for the expected level of commissions repayable.

Other income comprises income from ancillary services such as survey and conveyancing fees and is credited to the statement of comprehensive income on an accruals basis.

Leased assets

Rentals under operating leases are charged on a straight line basis over the lease term, even if the payments are not made on such a basis. Benefits received and receivable as an incentive to sign an operating lease are similarly spread on a straight line basis over the lease term, except where the period to the review date on which the rent is first expected to be adjusted to the prevailing market is shorter than the full lease term, in which case the shorter period is used.

Finance income

Finance income comprises interest receivable on cash at bank. Interest income is recognised in statement of comprehensive incomeas it accrues.

Exceptional items

As permitted by IAS 1 'Presentation and disclosure' certain items are presented separately in the statement of comprehensive income as exceptional where, in the judgement of the directors, they need to be disclosed by virtue of their nature, size or incidence in order to obtain a clear and consistent presentation of the Group's underlying business performance. Examples of material and non-recurring costs which may give rise to disclosure as exceptional items include asset impairments and costs associated with acquiring new businesses.

Taxation

Income tax comprises current and deferred tax. Income tax is recognised in profit or loss except to the extent that it relates to items recognised in other comprehensive income in which case it is recognised in other comprehensive income.

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 assets and liabilities are recognised where the carrying amount of an asset or liability in the consolidated statement of financial position differs from its tax base, except for differences arising on:

·   Investments in subsidiaries and jointly controlled entities where the Group is able to control the timing of the reversal of the difference and it is probably that the difference will not reverse in the foreseeable future.

Recognition of deferred tax assets is restricted to those instances where it is probable that taxable profit will be available against which the difference can be utilised.

The amount of the asset or liability is determined using tax rates that have been enacted or substantially enacted by the statement of financial position date and are expected to apply when the deferred tax liabilities or assets are settled or recovered. Deferred tax balances are not discounted.

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 combined income statement that is reviewed by the CODM.

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

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 is not 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 options are granted to persons other than employees, the statement of comprehensive income is charged with the fair value of the options at the date of the grant over the vesting period.

2  Critical Accounting Estimates and Judgements

The Group makes certain estimates and assumptions regarding the future. Estimates and judgements are continually evaluated based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. In the future, actual experience may differ from these estimates and assumptions. The directors consider that the following estimates and judgements that have the most significant effect on the carrying amounts of assets and liabilities within the financial statements are discussed below.

(a)        Impairment of goodwill

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 9.

(b)        Impairment of trade and other receivables

Judgement is required when determining if there is any impairment to the trade and other receivable balances. Trade receivables are reviewed for impairment if they are past due and are not repaid within the terms of the contracts. Other receivables, which include loans, are reviewed for impairment when there are any indications that they may not be recoverable or that security held against the balance may be inadequate to fully cover the amount outstanding. A provision for impairment will be made if following review of the balances, the Group considers it unlikely that any balance will be recovered.

(c)        Clawback Provision

The provision relates to the estimated cost of repaying commission received on life assurance policies that may lapse in a period of up to four years following inception. The provision is calculated using a model that has been developed over several years. The model uses a number of  factors including the total unearned  commission at the point of calculation, the age profile of the commission received, the Group's proportion of any clawback, likely future lapse rates, and the success of the Group's team that focuses on preventing lapses and/or generating new income at the point of a lapse. More information is included in note 11.

3    Revenue

The Group operates in one segment being that of the provision of financial services in the UK.

Revenue is derived as follows:

		2014		2013
		£		£
Mortgage related products		32,148,696		21,594,777
Insurance and other protection products		23,702,415		17,667,253
Conveyancing and survey fees and other income		726,502		804,689
		56,577,613			40,066,719

4    Cost of sales

 Costs of sales are as follows:

		2014	2013
		£	£
Commissions paid		41,886,947	28,159,716
Wages and salary costs		1,045,443	1,525,202
		42,932,390	29,684,918

 

5          Exceptional costs

The following items have been included in arriving at profit before tax:

	2014 £	2013 £
Costs incurred in relation to the IPO	746,053	-
Provision against loan	347,891	-
Total	1,093,944	-

In November 2014, the Group was listed on the Alternative Investment Market ("AIM"). The costs charged to the consolidated statement of comprehensive income relate to costs incurred as a result of the listing. These costs include such items as marketing expenditure and legal and professional fees relating to work performed for the listing.

At 31 December 2014 there was a loan outstanding to Client Data Systems Group Limited of £347,891 (2013: £347,891), a company in which Mortgage Advice Bureau Limited had a 7% shareholding. The loan was fully provided for in the year.

6.  Income Tax

	2014 £		2013 £
Current tax expense
UK corporation tax charge on profit for the year	1,555,390		1,138,516
Adjustments for over provision in prior years	(77,323)		(62,109)
Total current tax	1,478,067		1,076,407
Deferred tax expense
Origination and reversal of timing differences	9,355		12,522
Effect of change in tax rate on opening liability	(2,380)		1,715
Total Deferred Tax  (see note 12)	6,975		14,237
Total tax expense	1,485,042		1,090,644
The reasons for the difference between the actual charge for the year and the standard rate of corporation tax in the United Kingdom of 21.5% (2013: 23.25%) applied to profit for the year is as follows:
	2014 £		2013 £
Profit for the year before tax	6,876,245		5,235,133
Expected tax charge based on corporation tax rate	1,478,393		1,217,168
Expenses not deductible for tax purposes amortisation and impairment	184,838		14,742
Utilisation of tax losses	-		(5,377)
Adjustments to tax charge in respect of prior periods	(77,323)		(62,109)
Profits from associate	(98,486)		(75,495)
Rate change on deferred tax liability	(2,380)		1,715
Total tax expense	1,485,042		1,090,644

Changes in the taxation rate

The standard rate of corporation tax in the United Kingdom changed from 24% to 23% with effect from 1 April 2013 and from 23% to 21% from 1 April 2014. Further changes have also been enacted which reduced the main rate of corporation tax to 21% from 1 April 2015 and so the deferred tax balance has been calculated at that enacted rate.

7. Earnings Per Share

a) Earnings per share
	2014		2013
Basic earnings per share	£		£
Profit for the year attributable to the owners of the parent	5,391,203		4,144,489
Weighted average number of shares in issue  (see note below)	56,009,100		69,960,000
Basic earnings per share (in pence per share)	9.626p		5.924p
For diluted earnings per share, the weighted average number of ordinary shares in existence is adjusted to include all dilutive potential ordinary shares arising from share options.
	2014		2013
Diluted earnings per share	£		£
Profit for the year attributable to the owners of the parent	5,391,203		4,144,489
Weighted average number of shares in issue  (see note below)	56,229,933		69,960,000
Basic earnings per share (in pence per share)	9.588p		5.924p
b) Adjusted earnings per share
	2014		2013
	£		£
Profit for the year attributable to the owners of the parent	5,391,203		4,144,489
Adjusted for the following items net of tax:
Exceptional costs	1,019,147		-
Adjusted earnings net of tax	6,410,350		4,144,489
Weighted average number of shares in issue	56,009,100		69,960,000
Adjusted basic earnings per share (in pence per share)	11.445p		5.924p
Adjusted diluted earnings per share (in pence per share)	11.400p		5.924p

Until 11 November 2014 the Company's share capital comprised ordinary shares of £1 each, at which point these were subdivided into 0.1 pence shares each.  To allow comparability, the weighted average has therefore been restated based on shares being 0.1 pence shares throughout both 2014 and 2013

8. Dividends

		2014		2013
Dividends paid during the year		£		£
On A ordinary shares at £nil per share (2013: £60)		-		240,000
On B ordinary shares at £52.078 per share (2013: £8)		2,083,154		320,000
On C ordinary shares at £10 per share (2013: £nil)		24,600		-
On D ordinary shares at 0.0p per share (2013: 0.0578p)		-		780
On E ordinary shares at £nil per share (2013: £8)		-		80,000
On ordinary shares at £36.625 per share (2013: £nil)		1,849,998		-
		3,957,752			640,780

9. Intangible Assets

Goodwill			2014 £	2013 £
Cost
At 1 January			4,267,453	4,267,453
At 31 December			4,267,453	4,267,453
Accumulated impairment
At 1 January			153,346	153,346
At 31 December			153,346	153,346
Net book value
At 31 December			4,114,107	4,114,107

The goodwill relates to the acquisition of Talk Limited in 2012, and in particular its main operating subsidiary Mortgage Talk Limited.  The goodwill is deemed to have an indefinite useful life. It is currently carried at cost and is reviewed annually for impairment.

Under IAS 36, "Impairment of assets", the Group is required to review and test its goodwill annually each year or in the event of a significant change in circumstances. The impairment review conducted at the end of 2014 concluded that there had been no impairment of goodwill.

The Board considers that it now has only one operating segment, so accordingly it is necessary to assess the impact of the acquisition of Mortgage Talk Limited to the Group.  The value in use of Mortgage Talk Limited has therefore been estimated based on the improvements in net profits which that unit continues to bring to the Group. The forecast on-going profits generated by the acquisition of Mortgage Talk Limited significantly exceed the value of goodwill and therefore no impairment of the goodwill is required.  On this basis it has not been possible to apply a discount rate to these calculations.  Management has considered forecast profits over a three year period in determining the value in use.  Management believes that any reasonably possible change to any of the key assumptions applied in determining the value in use would not cause the carrying amount of goodwill to exceed the forecast ongoing profits.

Licences			2014 £	2013 £
Cost
At 1 January			108,461	108,461
At 31 December			108,461	108,461
Accumulated Amortisation
At 1 January			45,296	25,248
Charge for the year			18,047	20,048
At 31 December			63,343	45,296
Net book value
At 31 December			45,118	63,165

 

10.  Cash and cash equivalents

		2014 £		2013 £
	Unrestricted cash and bank balances	5,281,117		6,702,642
	Bank balances held in relation to retained commissions	3,988,889		2,685,511
	Cash and cash equivalents	9,270,006		9,388,153

Bank balances held in relation to retained commissions are held to cover potential future lapses in AR commissions.  Operationally, the Group does not treat these balances as available funds.  An equal and opposite liability is shown within Trade Payables.

11.  Provisions

Clawback provision	2014 £	2013 £
At 1 January	588,783	609,744
Charged/(released) to the statement of comprehensive income	161,896	(20,961)
At 31 December	750,679	588,783

The provision relates to the estimated cost of repaying commission income received on life assurance policies that may lapse in the four years following issue. Provisions are held in the financial statements of three of the group's subsidiaries: Mortgage Advice Bureau Limited, Mortgage Advice Bureau (Derby) Limited and Mortgage Talk Limited. The exact timing of any clawbacks is uncertain and the provision was based on the directors' best estimate, using industry data where available, of the probability of clawbacks to be made.

12.  Deferred Tax Liability

Deferred tax liability is calculated in full on temporary differences under the liability method using the tax rates enacted. The reduction in the main rate of corporation tax as set out in note 6 has been applied to deferred tax balances which are expected to reverse in the future.

The movement in deferred tax is shown below:

	2014		2013
	£		£
Deferred tax liability - opening balance	18,146		3,909
Recognised in the statement of comprehensive income	6,975		14,237
Deferred tax liability - closing balance	25,121		18,146

The deferred tax liability is made up as follows:

	2014		2013
	£		£
Accelerated capital allowances	25,121		18,146

Deferred tax liabilities have arisen due to capital allowances which have been received ahead of the depreciation charged in the accounts.

13. Share Capital

Issued and fully paid

	2014 £		2013 £
A Ordinary shares of £1 each	-		4,000
B Ordinary shares of £1 each	-		40,000
C Ordinary shares of £1 each	-		2,460
D Ordinary shares of £1 each	-		13,500
E Ordinary shares of £1 each	-		10,000
Ordinary shares of 0.001p each	50,510		-
Total share capital	50,510		69,960

The holders of the A Ordinary shares were entitled to a dividend in preference to any dividend voted to any other class of share and were redeemable at the option of the company. The A Ordinary shares were entitled to priority of proceeds upon a winding up or return of capital and carried voting rights totalling 5%.

The B Ordinary shares were not entitled to dividends other than at the discretion of the board but not if there were any arrears on the A dividends or if there remained any A shares to be bought back after the 1 January 2019. In the event of a winding up or return of capital the proceeds were payable to the holders of the B shares after any amounts paid to the A and C shareholders. The B shares with the E shares carried voting rights totalling 65%.

The C Ordinary shares were not entitled to dividends other than at the discretion of the board. The C shares were repayable at par upon a winding up or return of capital and did not carry voting rights.

The D Ordinary shares were not entitled to dividends other than at the discretion of the board but not if there were any arrears on the A dividends or if there remain any A shares to be bought back after the 1 January 2019. The D shares were repayable at par upon a winding up or return of capital. The D shares carried voting rights totalling 30%.

The E Ordinary shares were not entitled to any dividends other than at the discretion of the board but not if there were any arrears on the A dividends or if there remained any A shares to be bought back after the 1 January 2019. In the event of a winding up or return of capital the proceeds were payable to the holders of the E shares after any amounts paid to the A shareholders. The E shares with the B shares carried voting rights totalling 65%.

On 3 January 2014 all 4,000 A Ordinary shares of £1 in issue were purchased by the company and cancelled for a total consideration of £4,521,816.   On the same date 4,500 D Ordinary shares of £1 were purchased by the company and cancelled for a total consideration of £4,500.

On 25 June 2014, 1,188 of the E Ordinary shares of £1 were redesignated as B Ordinary shares of £1 and the 2,460 C Ordinary shares of £1 were converted to B Ordinary shares of £1 at the rate of 1 B Ordinary share for every 3.56 C Ordinary shares held. On the same date the remaining 9,000 D Ordinary shares of £1 were purchased by the company and cancelled for a total consideration of £9,000.

On 8 September 2014 217 Ordinary shares of £1 each were purchased by the company and cancelled for a consideration of £217.

Stamp duty of £22,635 was incurred on the cancellation of the shares referred to above.

On 31 October 2014 all remaining shares were redesignated as Ordinary shares and the 50,474 Ordinary shares of £1 each were redesignated as 50,474,000 Ordinary shares of 0.001p each. All shares rank pari passu in all respects.

On 4 November 2014, 35,600 Ordinary shares of 0.1 pence were issued for a total consideration of £53,400.

14. Reserves

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	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.
Retained earnings	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.

15.  Related Party Transactions

On 3 January 2014 all 4,000 A Ordinary shares of £1 in issue were purchased by the company and cancelled for a total consideration of £4,521,816.   On the same date 4,500 D Ordinary shares of £1 were purchased by the company and cancelled for a total consideration of £4,500.  The recipients of all of this consideration were directors of the company at this date. 

On 25 June 2014 9,000 D Ordinary shares of £1 were purchased by the company and cancelled for a total consideration of £9,000.  The recipients of £4,500 of this consideration were directors of the company at this date. 

On 8 September 2014 217 Ordinary shares of £1 each were purchased by the company and cancelled for a consideration of £217. The recipient of this consideration was a director of the company at this date. 

At 31 December 2014 included in other receivables there was an amount of £1,000,000 (2013: £nil) due to the Group from HBB Bridging Loans Limited, a company in which S Blunt and D Preece are directors and shareholders. This loan is secured, by a fixed and floating charge over the assets of the company and personal guarantees from certain directors of HBB Bridging Loans Limited. It accrues interest at a rate of 9.5% per annum above RBS bank base rate and has no fixed repayment date, although three months' notice to terminate can be given by either party.

At 31 December 2013 included in other receivables there was an amount of £906,563 due to the Group from House Buyer Bureau Limited, a company in which S Blunt is a director and shareholder. This loan was unsecured, accrued interest at a rate of 8.75% per annum and had no fixed repayment date. The loan was repaid in full in January 2014.

The Group made purchases of £45,283 (2013: £46,046) and sales of £2,606 (2013: £4,781) to BriefYourMarket Limited. At 31 December 2014 there was an amount of £521 due to the Group by BriefYourMarket Limited (2013: £488,926), and £4,627 (2013: £1,448) was due to BriefYourMarket Limited, a company in which R Palmer, P Robinson and P Brodnicki are or were directors and are shareholders. The amount due at 31 December 2013 of £488,926 included in other receivables represented an unsecured loan, which accrued interest at a rate of 8.75% per annum and had no fixed repayment date. The loan was repaid in full in January 2014.

At 31 December 2014 there was a loan outstanding by Client Data Systems Group Limited included in other receivables of £347,891 (2013: £347,891), a company in which Mortgage Advice Bureau Limited had a 7% shareholding. This loan is secured by personal guarantees and on the freehold property owned by one of the guarantors. The loan attracts interest at a rate of 10% per annum and has no fixed repayment date. The loan was fully provided for in the year.

Accounting services were provided to the Group by Robconsult Limited, a company in which P Robinson is a director and shareholder. Services supplied were on an arm's length basis and amounted to £9,065 plus VAT during the year (2013: £19,078 plus VAT). At the year-end £nil (2013: £1,813) was owing to Robconsult Limited included in trade payables in respect of these transactions.

During the year the Group made purchases from Astute Insurance Solutions Limited of £5,514 (2013: £3,535), a company in which P Robinson is a shareholder and was a director.

During the year the Group received introducer fees of £34,038 (2013: £26,267) from Capital Private Finance Limited, an associated company. At 31 December 2014 there was a balance due from Capital Private Finance Limited of £3,566 (2013: £3,410) included in trade receivables.

At 31 December 2014 there was a loan outstanding by Pinnacle Surveyors (England & Wales) Limited an associated company, of £15,000 (2013: £18,600) included in trade receivables.

At 31 December 2014, Buildstore Limited, an associated company owed £114,000 (2013: £nil) included in trade receivables.

During the year the Group received dividends from associated companies as follow:

	2014 £	2013 £
CO2 Commercial Limited	191,100	117,967
Capital Private Finance Limited	213,150	127,400
Total	404,250	245,367

16.  Share based payments

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.  Half of the options are subject to a total shareholder return ("TSR") performance condition and the remaining half is subject to an earnings per share ("EPS") performance condition. The options in both schemes vest as follows:

·   25% based on performance to 31 March 2017, exercisable between that date and 11 November 2022,

·   25% based on performance to 31 March 2018, exercisable between that date and 11 November 2022,

·   25% based on performance to 31 March 2018, exercisable between 31 March 2019 and 11 November 2022,

·   25% based on performance to 31 March 2018, exercisable between 31 March 2020 and 11 November 2022.

	Weighted average exercise price 2014 £	2014 £
Outstanding at 1 January	-	-
Granted during the year	1.60	1,325,000
Outstanding at 31 December	1.60	1,325,000

Of the total number of options outstanding at 31 December 2014, none had vested.  There were no options exercised during the year.  For the share options outstanding as at 31 December 2014, the weighted average remaining contractual life is 3.75 years (2013: not applicable).

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.

 

	2014	2013
Equity settled
Option pricing model - EPS	Black-Scholes	-
Option pricing model - TSR	Stochastic	-
Exercise price	£1.60	-
Expected volatility	30%	-
Expected dividend yield	5.4%	-
Risk free interest rate	0.81 - 1.58%	-

Expected volatility is a measure of an amount by which the share price is expected to fluctuate during a period.  As the Company has only recently listed historical data is not available. Management have therefore used a proxy volatility figure based on the median volatilities, of dividend paying FTSE AIM 100 companies over each of the expected terms.

Dividends paid on shares reduce the fair value of an award as participant does not receive the dividend income on these shares.  For the purpose of these valuations we have used a dividend yield of 5.4%, being the dividend projected by Canaccord Genuity Limited  for investors at IPO.

The Options offer participants the opportunity to benefit from increasing per share value without risking the current per share price. The risk-free rate used is the rate of interest obtainable from UK government securities as at the date of grant over the expected terms

The option has vesting period of 2.38, 3.38, 4.48 or 5.39 years from the date of grant and the calculation or the share based payment is based on these vesting periods.

The share-based remuneration expense comprises the equity-settled schemes of £10,553 and also a payment of £53,400 into a Share Incentive Plan - Free Share Award.  The Free Share award consisted of 35,600 new ordinary shares issued on 4 November 2014 into the Share Incentive Plan for all employees.  Every employee employed by the Group at 1 January 2014 and still employed by the Group on 2 December 2014 was each awarded 400 free shares.

The Group did not enter into any share-based payment transactions with parties other than employees during the current or previous period.

17. Contingent Liabilities

The group had no contingent liabilities at 31 December 2014 or 31 December 2013.

18. Events after the Reporting Date

Financial Services Compensation Scheme levy

On 19 March 2015 the Financial Services Compensation Scheme ("FSCS") confirmed a £20m interim levy for life and pensions intermediaries in respect of the year to 31 March 2015, driven by an unexpected increase in the cost of claims relating to bad advice by certain financial advisers to transfer funds from existing pension schemes into self-invested personal pensions. MAB does not provide pension scheme advice, but the levy is made on the class of intermediaries to which MAB belong. This interim levy will cover the costs of compensation claims until the next annual levy becomes available in July 2015.

MAB will contribute £89,449 to the interim levy. No provision has been made in these financial statements for this or any additional FSCS levies that may be raised during the year ending 31

19 . Distribution of the annual report and accounts to members

The announcement set out above does not constitute a full financial statement of the Group's affairs for the year ended 31 December 2014.  The Group's auditors have reported on the full accounts of each year and have accompanied them with an unqualified report.  The accounts have yet to be delivered to the Registrar of Companies. 

The annual report and accounts will be posted to shareholders in due course, and will be available on our website (www.investor.mortgageadvicebureau.com) and for inspection by the public at the Group's head office address: Capital House, Pride Place, Pride Park, Derby DE24 8QR during normal business hours on any weekday.  Further copies will be available on request. 

The Company's annual general meeting will take place on 20 May 2015 at the offices of Canaccord Genuity Limited, 88 Wood Street, London EC2V 7QR.  

 

END

 

 

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