Shares of Mortgage Choice Limited (ASX: MOC), a diversified financial services business specialising in mortgage broking, traded slightly higher today despite the company announcing a modest fall in full-year profit this morning.
In the year to 30 June 2015, Mortgage Choice achieved revenue growth of 3.4%, but a profit of $19.86 million, down 4.8% on the prior corresponding period. Excluding discontinued operations, profit was marginally higher, at 1.7%.
The softer profit result comes despite a rampaging property market in major cities. Indeed, the company's core broking business achieved record settlements of $11.5 billion, up 10.6%, and loan book growth of 4.6% – pushing it to $49.5 billion. One concern in today's report was the company's apparent "slight" fall in market share.
"Over the last 12 months, the Mortgage Choice core business has performed incredibly well, recording its best ever settlements result," CEO, John Flavell, said.
He said the company plans to focus on recruitment and transitioning into "a fully-fledged financial services company".
Pleasingly, Mortgage Choice's board declared a final dividend of eight cents per share, in-line with 2014's final payout. Payable on 15 September 2015, the final dividend takes the full-year distribution to 15.5 cents per share fully franked.
Mortgage Choice's financial planning business, which complements the group's existing suite of products and services, saw revenue growth of 107% year over year. It is forecast to break even on a monthly basis in the second half of the 2016 financial year.
Should you buy?
A revitalised brand and the ability to grow the business in many directions over coming years bodes well for the future of Mortgage Choice – as does its huge 7.6% fully franked dividend.
Personally, however, I'd prefer to get shares in the company at a cheaper price than they are today, given the likelihood of a slowdown in domestic credit markets over the medium term.
