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Mortgage Choice (ASX:MOC) share price tumbles 14% despite profit boost

The Mortgage Choice share price is tumbling 14% in afternoon trading. We take a look at the company’s latest financial results.
The post Mortgage Choice (ASX:MOC) share price tumbles 14% despite profit boost appeared first on The Motley Fool Australia. –

Red and white arrows showing share price drop

The Mortgage Choice Ltd (ASX: MOC) share price is falling hard today, down 14% in afternoon trading.

At the time of writing, the Mortgage Choice share price has recovered slightly to $1.42, down 13%.

The mortgage broker services provider’s released their financial results for the half-year ending 31 December (H1 FY21). Interestingly, this fall comes despite the report revealing a boost in profits.

What results did were reported for the half-year?

In this morning’s ASX release, Mortgage Choice reported net profits after tax (NPAT) on an International Financial Reporting Standards (IFRS) basis of $4.1 million. That’s an increase of 3% from the $4.0 million reported in the first half of the 2020 financial year.

Earnings per share (EPS) on an IFRS basis increased 3% to 3.3 cents per share.

The company reported settlements of $6.1 billion. This is an increase of 21% compared to the prior corresponding period. Mortgage Choice noted a continuing rebound in the housing market, fuelled by easing lending conditions, record low-interest rates, and increased government incentives.

Mortgage First’s total loan book was $54.1 billion at the end of the half-year. This was up from $54.0 billion on 30 June.

The company said it did not receive any JobKeeper assistance.

Comments from the CEO

Addressing the results, Mortgage Choice CEO, Susan Mitchell, said:

As a result of the investments we have made in regenerating the network and improving the customer experience, we have seen a noticeable improvement in average settlements across our franchisees. The increase in settlement volumes during the first half resulted in a higher payout ratio, as more customers elected to refinance or build up cash balances in their mortgages due to COVID related uncertainty. This resulted in cash net profit being steady on the prior half.

Looking ahead Mitchell added, “National leads are up 121% and at record levels, which bodes well for the second half as we look to deliver exceptional customer service through a combination of digital engagement and personalised, human service.”

Mortgage Choice will pay an interim dividend of 4.0 cents per share (cps), up from 3.0 cents per share in H1 FY20.

Share price snapshot

Mortgage Choice shares have been on a strong rebound. Indeed, this comes since hitting their post viral selloff lows in late March, up 163% since 23 March. With today’s intraday losses factored in, the share price is down 3% over the past 12 months. The All Ordinaries Index (ASX: XAO) is also down 3% during that same time.

Year-to-date, the Mortgage Choice share price is down 4%.

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Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post Mortgage Choice (ASX:MOC) share price tumbles 14% despite profit boost appeared first on The Motley Fool Australia.

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