Mortgage Advice Bureau (Holdings) (LSE:MAB1) — Final Results

0:00 Okay. Yeah. For me. Yeah. Everything. Good. Good afternoon, and welcome to the Mortgage Advice Bureau PLC investor presentation. Throughout this recorded presentation, investors will be in listen only mode. Questions are encouraged and can be submitted at any time by the q and a tab situated on the right hand corner of your screen. Simply type in your questions and press send. The company may not be in a position to answer every question it receives during the meeting itself. However, the company can review all questions submitted today and publish responses where it's appropriate to do so. Before we begin, I'd like to submit the following poll. And then I'd like to hand you over to Peter Brodnicki, founder and CEO.

0:32 Good afternoon, sir. Oh, hi. Hello, everybody. Thanks for dialing in. The first sort of fifteen minutes or so, before I pass on over to Ben, will be me just giving you a quick overview of our business model and how we operate within the intermediary sector and a sort of few of the USPs about our model and, our plans. So for those of you that aren't aware, Mortgage Advice Bureau are a on one level of mortgage network. I'll explain in a moment while a bit more on that. But, basically, if you're a mortgage broking firm, you have two options. You can either register directly under the FCA and sort of sort out your own sort of solutions for compliance, technology, the panels you use for insurers, lenders, etcetera, Or you can drop in under a a as an appointed representative of a mortgage protection network.

1:19 Effectively, the way that that operates is that as a network, we provide the technology, the compliance solutions, access to all the lenders, the insurers on our panel, any other products and services they require. And basically, it's a plug and play model for them. Effectively, all the revenue that they generate flows through us. The main areas of revenue are procuration fees from lenders, commission from insurance sales, like income protection, critical illness, life insurance, home and contents insurance, and some of our brokers also charge a fee, typically around $39.05 or so per mortgage. That income comes in through into into us, and, we then take a a revenue share from that income.

2:07 And that revenue share, is around 25% of total gross revenue. To our firms, it feels like less than that because, obviously, we we have far higher revenue levels because of the quality of the business and volumes that we do. So probably to our firms, it feels more like an average of maybe 8%. And they we then pay the balance back them on a weekly basis, and they pay their brokers. Some of those are employed. Some of those are self employed. And they pay any other costs like lead sources, back office, etcetera. So that's the base part of my model. Very capital light, very cash generative business model. The differences, I guess, if I just set the scene also in mortgage intermediaries, there are three levels of mortgage lending. There is purchase lending. There's remortgage lending, obviously, when people are remortgaging from one lender to another when their fixed rate expires after, say, two or five years.

2:57 And there's also product transfers. Product transfers are where the broker keeps the client with the existing lender who's offered a new fixed rate product at the end of the current fixed rate term. So when you look at market share stats, product transfers aren't new mortgages that don't account in that, whereas purchase and remortgage business do. Mortgage intermediaries handle 90% or so of all new mortgage business, that's purchase and remortgage. And, again, why would you not go to a single broker and sort of access to a hundred hundred and twenty lenders and 22,000 odd mortgage schemes through one conversation with the broker. So it's a compelling proposition. The broker will typically also advise on any protection requirements alongside the mortgage. When they take on a debt like that, you need to make sure that you can stay in that property in all circumstances.

3:47 Obviously, having context, etcetera, is something everybody needs and and is part of the advice process too. So that's basically how the model operates. MAB have run a different model to others. If you look at the average firm size of an MAB, it's around 11. If you look at an average firm size in a in a in a more traditional network, it's about two, two and a half maximum. The reason for that is in our industry, there are lot of one man bands, or, you know, one or two man bands, smaller businesses. That's not the market we operate in. We tend to focus on firms that are very strongly growth focused, have strong lead flows, and want more of a strategic partner than a sort of light touch network to help them grow, to help them take on more brokers, to increase their productivity, increase their lead flows, to support more of academy people or brokers coming into into their businesses.

4:40 So we are far more strategic partner for growth focused firms, which is why our average firm numbers are so high. Also, in a typical in a typical network, you'll get three months notice to leave that network. We from day one because we've been more of a strategic partner model for growth focused firms where our average contracts are at five years. About 40% of our distribution is on ten year contracts, and we're probably enough about five or six firms in twenty five years of trading. That's because we have very strong relationships. A lot of organic growth comes from our existing firms, which you wouldn't get from a more one or two man business model. So typically, when you outgrow a normal network, you and and you are ambitious to grow, you know, we are sort of a standout solution as a strategic partner model, if that's what you want to do. And that's how we've grown our business.

5:30 So, also, we have as a mortgage brand, Mortgage Advice Bureaus, the most recognized consumer brand for a for independent mortgage broker. Around 50% of our firms use our brand, and, obviously, the remainder will use their own brands. We grew our business also by specializing in sectors and becoming market leader sector by sector. So we started off with a state agency because that's where customers become most visible first in terms of perceivable customers. And so we built, you know, a bespoke solution for the estate agents, for the brokers operating in that sector, where the agents wanted to employ their own brokers in house or whether they wanted to introduce to a local firm. That was that was what we did, and we created bespoke recruitment, bespoke marketing technology. From day one, we've got our own technology. I believe we're the only one really doing that right now, which has been a big USP for us as we can tailor it to each business type and lead source and customer type.

6:24 And then so we became a market leader in in a state agency. We do around 2,500 estate agency branches across The UK. And and then in 2012, we acquired a new build business because new build builders are obviously new homes are the next biggest area. But there's a lot more specialization in that sector, fewer firms dealing with with the big major builders. So we acquired our way in there and then replicated our model very successfully. And now we are 22 to 23% market share in in new build, which obviously has had a tough run-in the last couple of years. But actually, it's got a very, you know, hopefully, a rosy forecast with the government's plans for increased home buying and and sort of cutting through the red tape of regulation of of local planning permissions, etcetera. So that was our second key sector. So, again, we've just done sector at times. This is very unusual for a network model who don't normally look at what lead flows their brokers have. They just facilitate the business they do. So we've gone into each sector and created a sort of dominant position in each.

7:23 And then in '22, we we also identified another major area for our business, which was those digital inquiries where customers came into a, say, price comparison website. These firms obviously have very significant lead flow. A normal intermediary model, mortgage intermediary model, you have local firms, local brokers, local lead sources, and that's what we've built, a very strong reputation in building. But to actually deal with these major national lead flows, you need a different type of model. You need a very scalable centralized operation, all employed, strong technology, you know, very scalable, strong SLAs, you know, per lead source. So there are only two two companies already which were operating in that market, and and we acquired one of them, which was Fluid.

8:07 Obviously, bit of a tough time followed a few weeks later with the the list trust budget budget. And so that business didn't deliver what we wanted to in the first year or two, but was a very key part of our strategic direction. And since then, we've extended that model in national lead flows to, you know, companies like Experian and and and ClearScore, credit bureaus that have huge amounts of customer data and want to work with us in terms of mortgage origination, with Amazon, for example, in terms of working with their financial well-being solution for their 71,000 employees in The UK. I also work very closely with Rightmove, both supporting our local firms and more leads, is really really what our what Rightmove are also trying to do, support their estate agency partners with more mortgage flow.

8:55 We've been working with them to do that, and, obviously, our big distribution in the state agency has been a a key consideration of that. But also there's real opportunities as there is with the credit bureaus and working with the very many customers that flow through these platforms that are not proceedable at the moment, are early researchers, and there's a big focus in our business to focus on that market rather than just focusing on the in market aspect of what we do. So so now we're focusing on on lead sources that we could engage with their customer bases and support them getting mortgage ready, update them on their mortgage on their current mortgages and their ability to switch into better deals. So that's a very big growth area for us moving forward, which we'll add more color to a little bit later. So so as you can see, we've gone into segment by segment, different type of distribution models.

9:40 Obviously, the the firms in our on our platform are not owned by MAB, but we do have have invested in probably 10 or 12 firms now where those firms have helped us get into sectors like, I guess, the price comparison websites, etcetera, like Fluent, like First Mortgage Direct. These have been very successful for us now. They drive higher margins. Those high margins helped us help us deliver a far more evolution with tech and AI into our own platform, which is our own IP and very important to us and a big differentiator that supports our entire business model, whether they're invested in businesses or whether they are appointed representatives into our mortgage network. So, basically, what we've done is we have these two models that help us access lead flow and the top businesses in the country, whether they're an appointed representative of the Mortgage Advice Bureau or whether they are invested in or owned by Mortgage Advice Bureau, which sometimes is what we need to do to to attract those best firms and get us into those sectors.

10:36 So actual strategies work very, very well for us. We're currently at an eight and a half percent market share. And obviously, over the last five years, we've we've we've doubled that market share to eight and a half. And obviously, in Capital Markets Day, very recently, we positioned ourselves now ready to to double that market share again again over the next five years or so. And I think, you know, we're in a far stronger position to do that probably than we were to get to the the market share we are in today with the developments in technology, the the team in AI, plus a a disrupt development in the sector coming up, I think, as our sector adjust to how we acquire customers and retain customers differently and and engage with technology and AI far more proactively. It's an exciting development for us. We're moving far more into a data play and allows us to attract customers into our platform in many different ways and and often very well well before they're in a in a in a position for mortgages.

11:31 So an exciting time for us. We positioned them that all in our our Capital Markets Day. I think I got a very good response, which is great to see. And we're a very innovative forward thinking company. So so just wanted to share that story with you. After that quick overview, I'll pass to Ben who will give you a bit more background of why we think we've got some tailwinds from a perspective and a market perspective and also run through some of our numbers in our pack. Thanks, Pete, and good afternoon to everybody. As Pete says, I'm gonna canter through our financial and operating highlights, and then I'm gonna talk about what the market's been doing recently. And in particular, to give you a bit of a pointer in terms of what the market is likely to do in the sort of the the coming weeks and months and indeed years ahead and the big opportunities we've got in front of us.

12:18 So if I could start with slide four, I believe it is, which is our financial highlights for the year 2024. Revenue is up to 267,000,000, 11%. Gross profit margin is up. Adjusted PBT is up a loss at plus 38% versus 23. Dividend is up. Cash conversion is up at a a big 120%, I would say. And net debt, the right way around, is is obviously down. We're sub 10,000,000 now having borrowed a bit to to buy fluent business, as Pete mentioned, about two to three years ago. So we're aiming for sort of net debt zero as best we can, and, obviously, that we're in a very healthy position indeed with a very strong balance sheet. If I could jump on and talk about operational highlights.

13:06 The key things to pick out really for the year is we're back to lending growth. So in terms of the numbers we put in for the year, we've got a total mortgage completions figure of just over 26,000,000,000. 2024 is a year. It's a gentle recovery in the market. Nothing spectacular, single digit growth, and a very gradual return of consumer confidence at the end of the year, which I'll talk a bit more about in a minute. Nonetheless, we've outperformed the market in terms of lending growth, and and we've grown our market share as well. One of the key things I'd bring out having had a couple of years fairly muted performance in terms of net adviser growth into the business is post period end. You'll note we've put on I think it's an additional 44 advisers. So at at March 14, which is a couple weeks ago, we've seen some decent growth at the start of the year in terms of people coming into MAB.

13:57 And we got few advisers leaving now, which basically means we are growing net at an adviser level, which is really good. And for those of you who are not familiar with us, if we go back to listing in 2014, so for the last sort of well, for the eight or nine years post listing, we were growing advisers at around about plus 15% on average a year. The last two years, we've been flat. So you'll see there's some pent up demand in there, and we're expecting some growth to come through. And it's really pleasing to see those numbers come through, obviously, in particular, in the last two months or so. If I jump on and talk about the market, what we'll basically just pull out here is is I'm very keen to talk about now and the future rather than necessary looking backwards. So this is a real focus on 2025. And on the left hand side, MAB in its market today has got a tailwind behind it of anywhere between 1117% for the year.

14:49 So our measure on this is UK finance or IMLA. There are two professional bodies who make more market forecast for for our market.

14:58 UK finance are forecasting plus 11% and Imba plus 17. We'll have to wait and see what the year brings to see who's closest with those figures, but there's a bit of a range between those two. And what I would say at the moment is the the market is starting positively certainly in 2025. And I think the evidence is probably consumers are getting used to paying mortgage rates sort of between 45%, accepting they're not gonna come down to levels

15:22 that they were three or four years ago. And those who want to buy a home, who've waited two or three years, are now just getting on with it, and they've had pay increases. And, actually, the affordability position is not too bad. So that bodes well, and that's why we expect to see a gradual recovery from what's quite a low trough at the moment. And for context, we're beneath the long term average in terms of housing transactions today even though activity is better. So the recovery really ought to be baked in. Now the additional thing is what the government is doing and where we think housing transactions are going to go. And you've probably picked up the pro growth narrative from a domestic point of view, I. E. We're pretty much x growth in The UK. And one of the government's tasks amongst others is to see many more new homes built, which I'll come back to in a minute. And, certainly, they want to see the regulators lean into supporting economic growth in The UK and freeing up the ability for lenders to lend more freely.

16:21 So on that last point, what we've seen is a relaxation announced in the last sort of, you know, day or week roughly by lenders around relaxing their affordability stress testing for new borrowers. And just in sort of basic terms, if I'm applying for a mortgage today as an average customer, I will now be able to borrow another 10 or £35,000 depending on the size of mortgage I'm applying for. So for first time buyers in particular, that will make quite a bit of difference, and it's long overdue in my opinion. For those who are not close to it, to stress mortgage payments at around about eight plus

16:54 percent even though the pay rate was about four and a half, which, although it's very prudent, one would argue it's overly prudent, and we need to let more tenants become first time buyers. Those sorts of move help to grow our market, our addressable market, and certainly lift up housing transactions every year, which is brilliant for MAB. The regulator is also consulting on what are called LTI caps. So they're loan to income caps. So what that basically means, if I'm a lender, I can't lend more than 15% of my mortgage book, if that's your new business. I can't lend more than 15% of that to a household of more than four and a half times their their household income. So by definition, it means I'm as a lender, I'm probably not lending enough into into that space.

17:40 And, again, there's consultation going on right now to see whether those should be increased from 15 to 20%. And for context, that will bring well over a 100,000 new buyers into the market, and it'll also help a few more people to move home as well. So the picture paint here is in the current government, they want

17:57 70% plus owner occupancy. They want back to sort of one and a half million plus housing transactions a year, whereas we have been running at about 1.1, 1.2. And all of that is brilliantly supportive for us. I said I'd come back to new build. We grew our market share last year overall. Had the new build market been where it usually is or in particular where it's going to be for the coming years under the government's plans, our market share would have gone up much more. We over indexed enormously in in new build. We're about sort of 20 to 24% share player. Government with its back, probably behind building more new houses is brilliant for MAB.

18:35 So as that market picks up, our share will increase, and, of course, our overall volumes and and sort of margin improve as well. Final points I'll put out on this slide is just basically around the refinancing opportunity. What we have and what we're looking at here, the graph on the right on on slide six, is the sheer weight of refinancing that will have to take place this year. Now for context, this is a record year,

18:58 and next year is almost identical as are the first nine, ten months of the year after. Now for those who haven't worked it out already, why is it so big at the moment? This graph here represents five year fixed rates coming up from maturity, five years on post the lifting of the lockdown and the reopening of the housing market after the pandemic. You'll know and remember there's a two and a half year very busy period following that with stamp duty breaks and people sort of buying homes in the countryside, second homes, all sorts of stuff. This is what's coming up for refinance now as is the two year fixed rate products post the mini budget. So you've got two really big cohorts of clients. One who are gonna end up paying less. That's the two year stuff from the post

19:39 mini budget, and they got a big chunk who'll be paying quite a bit more coming off the post pandemic. All of them will need to refinance because they won't want to settle a lender's floating rate, and all of that is a big opportunity for MAB. So my summary to the slide is is growth to the housing market, further boosted by new build and refinance as we look outwards. So a real structural tailwind for us as a business as we look out to the coming years in front of us. There's probably nothing else I'm gonna mention on slide seven that I haven't tackled on slide six other than just the intermediation level. So for those of you not privy back to Pete's points at the beginning, just about 8.7 to nine out of 10 people who take a new mortgage will go through an intermediary. So you'd be quite right to assume there's not much upside to that. Well, it probably is a little bit. I can see it going to 90%, maybe not much higher than that. But where there's real upside is on this area of product transfers, which is where if I'm a borrower with Santander and I

20:36 use an adviser to help me switch to a different rate at Santander, that's a product transfer. In that market, intermediaries only penetrate 50%, and that is rising quite quickly. So the upside is also there for MAB to increase its footprint and market share in a product transfer market as well. So all of these in summary are great for us as a group, very supportive to our numbers looking forward, and probably that's where I'll I'll take a pause.

21:02 All I'd probably come back to summarize before opening the floor to questions is just really we are very bullish about the future. So although there are lots of macro challenges at the moment, from our point of view, we're very positive about the outlook. So irrespective of what the market does, we will grow share. We're far more resilient as a group that can stay very strong through periods of low housing transactions as well. We feel very positive about our future and in particular being a lead player in our market. So at that point, I shall take a pause and hand over to Mark. Thanks, Ben. We have a few questions coming through, which I'll start with. If you want to ask a question, please post it in the q and a panel, and we will try to get to them all.

21:53 If I can start with a question from James on technology saying, you mentioned tech and AI. How do you see this evolving, and what other competitive advantages you see this provide you over the competition? You and me, Pete?

22:12 Well, I'll kick off and you I'm sure you'll have we've got very strong views on that. I touched on it earlier. You know, we have significant resources in IT. We have about a 120 heads in IT and AI across three locations.

22:27 There's been a couple of major players that are left building their own IT that have have moved recently to buying off the shelf. I think, you know, the way the pace the world's now moving and how, you know, a system that we use has to be more than just a CRM in in when you're dealing with an in market customers. It has to be able to help you capture, nurture customers digitally. It has to bring them through their customer portal and into being perceivable and and and when the advice is given right through to engaging with them post completion, right through to retention of other products and services they need. And, also, you have to interface with many different types of lead sources and lead flow, especially some of those national brands we've been talking about. You have to really bespoke and personalize. And if we don't have that control over that, that will make a huge difference to what we're able to achieve.

23:14 So I think now, the next three or four years, we'll see, you know, technology and AI transform the role of the broker, increase efficiencies across the business and the broker, improve and enhance the customer experience still further, make them intermediary proposition even more compelling, and and we wanna

23:29 be in control of that rather than through a through an off the shelf system. So I think that that is a a big USP for us. We're using technology not just in terms of the broker and lead generation. We're using it also an AI to to, you know, to increase efficiencies in our head office resources, you know, to, obviously, automate, you know, rep repetitive tasks, things that we know AI can can can deal with very quickly and easily. So, again, we sort of we talked about some in our in our results, then our CMD increasing sort of broker count. Sorry. Increasing market share and and

24:06 revenue by a 100% over the next five years or so. We will do that. For example, on the broker front, by not having to double brokers from 2,000 to five to to 4,000, we'll probably get to no more than about two and a half thousand brokers because of productivity built into our systems and technology that allows those brokers to be a lot more productive and cut down that sort of ten hour process we we establish from beginning to end that it takes. That's all gonna increase productivity, that increase profitability both for our own advisers that we and our and the firms that we

24:38 we own and also also for more importantly as well for our for our firms that decide to join our platform and see those efficiencies in their firms in terms of productivity. And that same sort of growth, if we grow over that same period to double revenue, for example, I don't see our head office costs increasing by more than 25% either for that doubling of of revenue.

24:59 Again, for the same reasons of using technology, AI, and other other tools to increase efficiency productivity across our our our our own head office resources. So, you know, loads of benefits coming through at a time where I think probably in the last twenty five years we've been running MAB. There's not been much evolution in that, but I think we're moving not only to evolution, but a level of revolution. But that's all good news because all stakeholders in the process will see a benefit from it. Whether the broker, you know, the the business owner, and it'd be centrally the customer, and and also future customers that we can now engage with really really proactively. Do you wanna add anything to that? Yeah. I think the only brief

25:36 add on to that for me would just be around where the regulator is in terms of the role of advice in AI. So just quick view for me, not the regulator's view necessarily is I think if I'm the regulator under the current system, if two advisers get something wrong out of 500, it's two out of 500 as a percentage failure. If AI is set wrong or a process is set wrong, it's wrong for everybody, if that makes sense. So the worry about systemic risk for the regulator, I imagine, would be quite strong if there's a push to replace advice with AI. Our position very clearly is we don't think AI will replace nor should it replace the advice given by advisers. So we're gonna hold our very strong position of promoting the value of advice.

26:20 And I just echo that in a say, first time buyer scenario, say, 30 to £150,000 to buy their first home. That's a lot of money. An individual typically doesn't understand mortgages very well, and it's a huge commitment to sort of buy a first home or even move home for that example. So I think the emotional connection from the customer means eventually they want to talk to somebody. We think the regulator will almost certainly be worried about systemic risk, but our role is to make the process, to Pete's point, significantly easier to execute, giving customers and advisers a much better experience, leaving us more time to have a decent with a client. And that's kind of where we draw the lines. It's heavy lifting up front is what the AI will do and all the support around it. The actual physical advice, I think, will always be physical from people who add value to clients in a an interactive scenario. So that's the quick add on for me. Yeah. And I think sort of taking that sort of in market process from sort of ten hours to sort of to maybe two over the next couple of years, that just that too is all the focus, important part of the process, which is engaging with the customer, the advice, the reassurance

27:20 that is required, in the process, but making the whole process a lot more digital and self serve and and easy to interact with, in terms of the client, you know, pre and post that aspect of advice. Okay. Next question is about revenue concentration. This is from Jonathan saying, is there risk to future profits of consolidation in your appointed representative base?

27:50 So I would say no. Just the the first sort of I mean, good question. Thank you, by the way. I think the if I could perhaps be clear about the consolidation in terms of where we're going, We're backing a very small number of firms by investing either a bit in them or a bit more in them. And where they have deep specialisms, we're backing them to make us even more specialist in specialist areas. Where they're very productive per adviser. We're going to invest firmly and really encourage them to grow. But for context, this isn't

28:22 our players in kind of a a buy and build strategy where we're consolidating lots of cost in at the center. There's a small number of firms we're gonna back to grow much, much bigger, but the key message is our network is going to continue to grow as well. And, actually, the additional margin and profits we make from pushing sort of the invested businesses will get recycled back into enabling us to build a better proposition for the network and push its growth in parallel also with the growth of the invested businesses. So I think what we can see looking forward is a a higher profit margin, a higher gross margin, slightly increased overheads, but countered by efficiencies at the center driven by AI and other things we're doing in terms of economies of scale at the center. So I I think all the all the sort of the KPIs and numbers will flash green in the in the right way, and I think we've got the balance right. It's not a sort of wide scale buy and build that will change our numbers significantly.

29:16 One is the change will change for the better. And in our AI distribution, our network distribution, obviously, there will be consolidation there because, you know, with the industry, we'll see that productivity gains will mean fewer numbers of advisers even though market intermediary share might increase and the number of mortgages we'll do, we'll see less brokers in future. We'll probably see less firms, but bigger, well run firms with higher productivity. And we're seeing some of that consolidation happen within our with distribution already. And the good news is we're, you know, we're attracting the sort of firms that, you know, are those bigger firms that actually do some of the consolidation themselves. Some of that's happening right now,

29:50 and we're supporting some of them to do that even if we're we're not haven't got a stake in them. We're seeing the same thing happening in the state agency sector. And, the big groups that are consolidating within the estate agency sector, you know, are with with MAB2 because that's, you know, a big market we operate in. So I think all that can do and even if our invested in business, some of those were consolidating now, we used to run them more autonomously, you know, to be able to scale and and and leverage our our cost base and and productivity better. So I think that's all really positive in terms of, you know, our performance, you know, efficiencies and and profitability. So I think you will start to see some of that happen across our sector. Yep.

30:29 Okay. I'm gonna try and group a couple of these questions around regulation. If I start with Alastair asking, the finalized terms of reference for the pure protection market study no longer refers specifically to loaded premiums. What do you make of this? Have your views on the study evolved since the draft terms were published? Yeah. Again, great question, and thank you. So there's probably one or two of you on here we spoke with back in well, a few months ago. And my our position at the time was was relatively bullish, notwithstanding, I think, the climate and the read at the time was probably anything but. I think because of other things going on in adjacent markets, people were genuinely worried. But what Repaynes to say at the time, which I would definitely say again today is

31:19 is this is a forward looking study. So to be really clear, this is called out in a paper by the regulator. There's no pathway for compensation here or redress, and that's explicitly now in the new tours, the terms of reference twice mentioned, which is quite unusual. So if there's anybody who was concerned about look back even if there there were ever a problem, that's the first point. It is a forward looking review. Secondly, through its consultation pre printing the tours, the terms of reference there, the regulator is explicitly calling out the incredible amount of complaints experienced by FOS and just generally across protection as a market. We know what our complaints level are. We're gonna publish them in the annual report and accounts for the first time this year, and they are incredibly low.

32:06 So what the regulator is actually calling out here is we need there's no systemic problem with, you know, bad advice or anything, and complaints are practically on the floor in terms of numbers. It's a forward looking review. And, actually, what they're encouraging is more competition in the market because they want more consumer uptake of the product because as a whole, The UK is underinsured. So that's really good for us as well. The final point to the to the question being asked just around the terminology loaded premiums. I did my best to keep a calm face last September, October because there isn't such thing as loaded premiums.

32:41 And I think the regulator has explored and found it out in its last sort of six months, seven, eight months since then. Yes. There are different price steps per distribution channel as you'd see pretty much in any market. But the question for me was loaded on what? And there isn't an answer to that question. What we have is a panel of six stellar blue chip insurers like Legal and General, AVIVA, and Royal London paying out over 95% of its claims and flexing their price up and down according to the market share appetite they have at any given time, which right now is very strong. And in fact, the pricing is extremely competitive. And they set the pricing, and they set all the terms as well. So I'd probably wrap this by saying, I feel better the last September, October.

33:29 I feel bullish about the way the regulator's going about its appraisal of the market study, and I expect it will make some changes in some of the areas it probably needs to, but nothing substantial. And overall, we would welcome the review and the dialogue we're having with the regulator, which has been very positive. Just to stay on the theme, there's another question from from Liam Liam saying, with the FCA reviewing lending and advice rules, do you see any changes that could impact the business, or does regulatory change present opportunities for you? Yeah. This is really good. I mean, generally, for the first time, Liam, I'm fair. I think it is for the first time. I've actually been able to sort of point to regulatory tailwinds. I I think the approach from the government, the treasury, and and and, obviously, now the regulators is absolutely the right one.

34:19 So the current position just standing back is there is no there's no giveaway is really possible at the moment because the tax take is too low. We all know the position The UK is in at the moment. We know there's not money to give away is perhaps a better way of putting it. So rather than sort of provide the sugar rush of a stamp duty break and, you know, other things like that, which we tried and tested loads before, what they're looking at is the arrears levels with lenders, which were incredibly low, you know, historically at record lows. And there's two ways to look at that. One is obviously that's fantastic. The other side is you're not lending enough. I know it's on that last point that that quite rightly, the various parties have looked and said, well, there's a tolerance here, which is still responsible lending. Please go out and lend more where it's responsible and sensible to do so. And I think the regulator and the other parties were absolutely right on that. So the rules changed in 2014 and haven't changed much at all since then, which is now eleven years, and it's designed to sort of control boom bust post the credit crunch, which is now a very long time ago. So there is room for adjustment here as long as it's sensible. And to your point, what it basically does is it really increases our market size because more people are better get onto the housing ladder and more people are gonna be able move house, both of which are really important socially and also for our markets. So we really welcome the change. And the final point is they've, in the same paper, talked about making remortgage easier as well.

35:42 So just more parochially for MAB, if more people remortgage rather than stay with their existing lender, one, it's a better customer outcome because they'd be probably getting a better rate nearly every time. Two, from a margin perspective, it's better for MAB. So any moves to free that up back to where it used to be, would be beneficial for MAB too. So we really like what they're doing, and what they're focusing on at the moment. Thanks, Ben. Probably one one more for you here on, you you talked about the panel of insurance providers. Jonathan is asking, I understand your mortgage panel is provided by LNG. Would it ever make sense for for MAB to create your own mortgage panel? So maybe worth just just bringing out the difference there between the panel. Yeah. So so, Jonathan, the the math there for me and Pete, which we talked about we probably talk about this about once, twice a year, I think, every year. Pete, that's probably fair, isn't it? I think it's Yeah.

36:34 Absolutely. Is quite simply our our energy is better off building a mortgage club, which at least one of us has done before, and we kind of know how to do it. And it's we could do that versus if it's sort of at a a net cost profit level neutral build versus, if you like, buddy with LNG, we're better off putting our energy and resource elsewhere that delivers a better return. And that's where we always are when we have the discussion. Every now and then, we say, look. Why don't we do this? And we always end up in the same place. Less is a demonstrable benefit to doing it, but probably fine just piggybacking LNG for now anyway. And it's something we'll probably review twice a year. I would have thought every year looking forward, Pete, unless you wanna add anything to that. No. That's absolutely right. You know, you know, LNG, a huge reputable company, big, you know, big volumes going through them. We're their biggest provider of mortgages as you'd expect.

37:25 And we still have those direct relationships with all the lenders anyway. So we have their sort of engine room to go through, in terms of all the payments and there's some benefits for us in terms of how they they're charged to us as well and paid paid to us. So, so yeah. No. I I think it works well, actually, the balance between the two, the direct relationships with the lenders and and using the club to facilitate business, I think is is a strong combination at the moment. And as Ben says, we'll review it as in as in when we see that shift in any shape or form. Yeah. Okay. There's a question here from Steven asking, how are you impacted by national insurance increases from April? We don't have Emily, our our CFO, on on today, but I know from a a numbers point of view, you know, because most of our advisers are in the network, the direct impact to MAB is is not material, and we haven't changed our our expectations for for 2025 profits.

38:26 Yeah. But a potential kind of knock on question about how business owners think about recruitment per perhaps? Yeah. So so, Pete, if you I'm very happy to add in at the end of it. But if you wanna talk about recruitment of or a confidence level of firms to recruit new advisers at the moment. Yeah. Look. I I think, you know, the the nice thing about the ability now for the platform and through, you know, innovation and lead generation, customer capture, and nurture retention is that, you know, our firms can now start to see adviser productivity increase more significantly. They also have choices between employed and self employed brokers. If you've got very strong lead flow coming into your business, then you're better off having employed brokers. If you've got a model where you have limited lead flow and you want brokers to self generate, you typically go for self employed. So in terms of what you need to pay, it will differ depending on the model that you've got. So you've still got the option decision to make in in that respect.

39:22 If you look at the cost of, you know, if you look at sort of the average of our appointed rep firms of, say, a £100,000 of a of a broker in terms of banks overall commissions and income. And our top firm, maybe, banking average of 300,000 per adviser. If you've got an employed broker, majority of that cost a lot of the cost sits in that first 100,000 with your basic salaries and other other other other base costs, and then you've only got sort of relatively small amount of commission on on on any increased level of productivity. So, you know, the nice thing is with that, that is hitting people's bottom line without a shadow of a doubt, especially smaller businesses. I think it's impacting more heavily on. The nice thing is, you know, we're we're we're creating a platform and solution for these firms actually not to just take on as many brokers as they can, but make the ones that have more productive. And and therefore, that maintains and increases their margins even though things like this might erode them in a small way as well.

40:16 Yeah. And I think the the final bit I'd say is business owners have felt not particularly confident for two and a half years. And the reason we've seen the adviser growth of plus 44 since the the turn of the year is probably there are some that are feeling a bit better about the outlook. That's when they'll take cost on if they're employed and obviously add to the adviser count. So, hopefully, we're seeing the tide turn in the plus 44 in the last two months is evidence of that. So I think that the confidence is returning, which is a really good thing. Yep. Right. Just one more question I can see at the moment from Jonathan asking about international opportunities. Several years ago, there was a significant excitement at the potential to expand in other countries with a similar market structure to The UK.

41:02 Is that still the case? Yeah. Sure. Yes. We did go into Australia in a very light touch way seven or eight years ago now. It was a a similar market. There was an opportunity of a lead source that we had out there, so we took the opportunity to test the model out there. We didn't build it from scratch. We partnered with a more traditional network, and and created a new arm to that network, which is based on the MOBE model in in The UK. We had some good traction. There's some regulatory change out there that slowed things down. But to be honest, when we identified the huge opportunity here and how we felt sort of technology, AI, and and our whole customer acquisition model could could, you know, how it could scale, we didn't want any distractions. So they are now running that for us effectively, like a franchise operation.

41:47 We've taken more of a backseat and focused completely on The UK. I've seen too many models in the past in different sectors that sort of got excited going out on top of markets, taking the eye off the ball of the of the core market, and the core market is where there is a massive opportunity. Also, at the time, our technology wasn't about anywhere near where it is today, and I think if we're able to do that again, we'd want to, you know, fasten the technology to be able to go out into into a cross border environment. And and also, you know, if you think about how our model has been built up in twenty five years, it's been a lot of time to build that network, state agents and builders, what have you. But the new, you know, the the growth area for us at the moment is into this big national relationships, data driven relationships with credit bureaus, with, you know, with property portals, with house websites. Now they all exist across the board too.

42:37 So I think if we were ever to revisit them again and then discuss it and when the time is right, we are very much technology led solution into those major data led opportunity, you know, where we we have proven concept here and we can take that concept to scale it very quickly rather than taking the twenty five years we've we've had to build up, you know, our customer base and lead sources, you know, MAB in the way that we have. So, some learning to be had from there and I think it's what everything lies about timing. And, I think the time will will probably be right again at some point in the future, but it's not yet. Right. Those are all the questions I can see. I won't keep people longer than, than we need to. If you've got any follow-up questions that that haven't, you haven't asked now, just look look up the investor relations email, and and we'll get back to you.

43:30 Otherwise, Peter, is there any last closing comments you want to make? Yeah. I need really probably the main comment from, you know, from from our Capital Markets Day, really, is is that that, you know, before we went out and and did that presentation, we've we've put a lot of things in place for the next stage of our journey. And we've part of that, we've also identified that we you know, our intention to move to main market on onto the 250. That's still our intention. We have a lot to deliver this year, and that's where our focus is gonna be. We've certainly set our intention. We'll give an update later in the year on the time scales for that, but it will definitely be happening. It's just not yet. And, again, as I said earlier, everything's about timing. But I think that's a that's a a a very much a signpost of our ambition of what we wanna do, where we wanna go to. Yes. Aiden Scott had his problems, but I think those will stable out. I I think it's something we would have had to have done anyway, as our business has higher expectations where it needs to go to a wider range of investors from, you know, from different continents that, you know, want to have want to have their different views and want more liquidity.

44:35 So we see that as a sort of really positive step moving forward. So I think we'll have some really real momentum, you know, as we go through this year to to to approach that as the next part of our strategy. Peter, Denmark, thank you for updating investors today. Can I please ask investors not to close this session? It should now be automatically redirected to provide your feedback in order that the management team can better understand your views and expectations. This will only take a few moments to complete, and I'm sure will be greatly valued by the company. On behalf of the management team of Mortgage Advice Bureau PLC, we'd like to thank you for attending today's presentation, and good afternoon to you all. Thank you, everybody. Thank you, everyone.