What: Australian mortgage broker Mortgage Choice Limited (ASX: MOC) has delivered its "best financial results ever" today, having announced a record number of loan settlements as a result of the strong housing market and the $1.34 million sale of its LoanKit business.
So What: Mortgage Choice, which boasts a market capitalisation of $387 million, said it had "embraced the opportunities that the strong market has presented us with", taking advantage of the red-hot property market created by the low interest rate environment. The company managed to grow net profit after tax (NPAT) on a cash basis by 18.6% compared to FY13, while its loan book grew 4.6% to $47.4 billion. This was bolstered by a remarkable $12.2 billion worth of approved housing loans for the year, which compares to the $10.2 billion worth of approvals in the prior year.
Thanks to the fantastic results, shareholders will be rewarded with a final dividend of 8 cents, taking its total dividend for the year to 15.5 cents per share. That puts it on a fully franked yield of 5%. Meanwhile, earnings per share (EPS) came in at 16 cents (including the sale of its LoanKit business), giving it a P/E ratio of 19.5x.
Now What: With shares now sitting at $3.12, shareholders have enjoyed a return of 17.7% over the last 12 months, outperforming the S&P/ASX 200 Index's (INDEXASX: XJO) 11.4% return. The good news is this looks like continuing over the coming 12 months.
With interest rates not looking like climbing any time soon, Mortgage Choice has forecast another very positive year in FY15. While it will continue to invest in its various divisions, it expects its financial planning business to turn a profit on a monthly basis from next financial year. Its www.helpmechoose.com.au (HMC) business is also now profitable and growing.
