Yellow Brick Road has unveiled major expansion plans to shareholders, including its discussions to take-over three mortgage-related companies.
The unnamed companies are a consumer product comparison website and lead generation group, a mortgage aggregator and a mortgage manager.
YBR told investors in a briefing – now lodged with the ASX – the value of its mortgage book would jump from $2.2 billion to more than $20 billion if the deals proceed.
YBR is currently in “exclusive discussions” with the three companies, executive chairman Mark Bouris
“We have started this calendar year in earnest and have currently executed three confidentiality and exclusivity agreements to acquire accretive businesses in the financial services sector.
“These are currently subject to due diligence investigations and, whilst there is no guarantee that these acquisitions will be completed, there are strong strategic imperatives behind them for our group.”
The company also divulged an organisational restructure, stressed it is on track to be profitable by next year and unveiled plans to grow to 300 branches.
Bouris said YBR Group wants to be a leader in the non-bank segment, and to help do this it will form a listed non-bank holdings company which will own the Yellow Brick Road Wealth Management business.
According to YBR its revenue growth is a strong 59%, with branch network revenue increasing by 83% in the first six months of the 2014 financial year. The net profit has grown by 4%, with the business still investing for future growth.
Its mortgage loan book sits at $2,223m at the end of the first half of FY2014, up from $1,789m at the end of FY2013. It has grown 77% since the first half of FY2013.
Its mortgage growth has been boosted by 52% from the first half of FY2013, now sitting at $740 m.
Investors apparently liked the update, sending shares up 17.3% to 61c.