Major mortgage franchise Mortgage Choice
has responded to queries about its sudden share price growth, saying it reflects its strong performance over the past 12 months.
Over the past couple of weeks, the franchise’s share price has climbed steadily higher, prompting the Australian Securities Exchange to issue the business with a price query.
Mortgage Choice chief executive officer John Flavell has responded, saying the company’s recent share price growth should be seen as an upshot of the company’s continued strong business results.
“We have received a number of queries in relation to our growing share price, and as per our response to the ASX, I would like to state that Mortgage Choice is unaware of any material changes to the business that would be driving this growth,” he said.
“We believe the growth in our share price is simply reflective of our strong performance over the past 12 months.”
In the first half of FY2016 Mortgage Choice announced its strongest ever interim profit, with net profit after tax on a cash basis up 12.4% year-on-year to $10.1 million.
Home loan settlements increased 8.5% over the six months, bringing the group’s total loan book to $50.7 billion, up 4.7% from the first half of the 2015 financial year.
“And, since that time, Mortgage Choice has continued to deliver exceptionally strong business results,” Flavell said.
“In March we reported that continued revenue growth and prudent expense management had resulted in the Mortgage Choice Financial Planning division delivering its first profitable monthly result.
“Since then, the proportion of recurring revenue (coming from ongoing advice fees and insurance renewal premiums) has continued to grow strongly, allowing the financial planning business to turn its second monthly profit result.”
Flavell said he expects this to continue going into the future.
“Looking ahead, continued growth in new business – across the entire company - gives me the confidence to state that the positive results we have achieved to date are repeatable.
“I look forward to discussing the company’s full financial results in August.
“I think it also important to note that in recent years, Mortgage Choice’s share price has tracked well in excess of our current pricing.”