Mortgage Advice Bureau’s H1 2025: fast growth, better mix, and eyes on the Main Market
Mortgage Advice Bureau (Holdings) plc has delivered a strong first half. Revenue rose 19.6% to £148.2 million, with adjusted profit before tax up 18.4% to £14.5 million. Statutory profit before tax jumped 54.8% to £9.6 million as acquisition-related charges eased. Crucially, growth outpaced a recovering mortgage market that was up just 6% on total lending.
The momentum has carried into H2, with July and August applications up 17% year-over-year. Management says trading is in line with expectations for 2025, and the Group is preparing a move to the Main Market in 2026.
Key numbers at a glance
| Metric | H1 2025 | H1 2024 | Change |
|---|---|---|---|
| Revenue | £148.2m | £123.9m | +19.6% |
| Gross profit / margin | £43.5m / 29.4% | £37.7m / 30.4% | +15.4% / -1.0pp |
| Adjusted PBT / margin | £14.5m / 9.8% | £12.3m / 9.9% | +18.4% / -0.1pp |
| Statutory PBT / margin | £9.6m / 6.5% | £6.2m / 5.0% | +54.8% / +1.5pp |
| Adjusted diluted EPS | 18.2p | 14.8p | +22.9% |
| Basic EPS | 11.8p | 6.5p | +82.8% |
| Adjusted cash conversion | 116% | 119% | -3.0pp |
| Net debt / leverage | £11.7m / 0.3x | £16.7m / 0.6x | -£5.0m / -0.3x |
| Proposed interim dividend | 7.2p | 13.4p | -6.2p |
What’s powering growth: purchase-led recovery and higher productivity
New lending in the UK bounced 22% in H1, with purchases up 35% as many transactions were brought forward ahead of April’s Stamp Duty Land Tax changes. Against that backdrop, MAB’s completions rose 17% to £14.2 billion and its market share of new mortgage lending edged up to 8.3%. Product Transfers (switching with the same lender) were softer market-wide, but MAB still grew share to 3.0%.
Two levers stand out:
- Adviser base and productivity – closing mainstream advisers rose 5.2% to 2,041, and revenue per adviser jumped 14.2% to £74,600. That’s a healthy sign that technology, lead generation and training are paying off.
- Business mix – purchase activity rose to 54% of lending value (47% prior year), a richer mix that supports fees and client income.
Revenue mix, explained in plain English
- Procuration fees (£60.0m, +22.9%) – commission from lenders when a mortgage completes. Helped by more house purchases and a 5% rise in average loan sizes.
- Protection and general insurance (£55.8m, +14.4%) – policies sold alongside mortgages. Growth reflects the pick-up in purchase volumes.
- Client fees (£29.8m, +24.3%) – fees charged to customers, higher in specialist lending where attachment rates are stronger.
- Other income (£2.6m, +9.2%).
The balance by revenue stream stayed broadly steady (mortgage 40%, protection/GI 38%, client fees 20%, other 2%) – a diversified model that cushions the cycle.
Margins, cash and dividends: the good and the not-so-good
Gross margin slipped 1.0 percentage point to 29.4%. That’s not unusual when a business is leaning into growth. Management points to deliberate investment in adviser onboarding and centralised lead generation, plus new advisers that are not yet at full productivity. The admin expense ratio actually improved to 19.8% from 20.5%, showing operating discipline.
Cash generation remains a bright spot. Adjusted cash conversion was 116% and net debt reduced to £11.7 million, taking leverage down to a very manageable 0.3x. There is £50.7 million of headroom over the regulatory capital requirement.
On dividends, the interim is 7.2p (vs 13.4p in H1 2024). That sounds like a cut, but it reflects the new policy announced in February 2025 to pay out c.50% of full-year adjusted post-tax profits, with about one-third at the interim stage and two-thirds at year end. The interim represents a £4.2 million cash outlay, payable on 31 October 2025 (ex-dividend 2 October; record date 3 October).
Market share gains and encouraging H2 setup
Total market lending was £236.7 billion in H1, up 6%. MAB’s completions of £14.2 billion equate to a 6.0% share of total lending (5.4% prior year), and importantly 8.3% of new lending. With the Bank of England having cut Base Rate three times this year and mortgage pricing trending lower, refinancing volumes are expected to build through H2 2025 and into 2026. July-August applications were up 17% year-over-year – a useful leading indicator.
Strategy update: tech, data, AI and targeted M&A
MAB has been investing heavily in proprietary technology and is now layering in a new data strategy and AI-driven initiatives to boost lead flow and conversion. That should support adviser productivity and margins over time.
On M&A, the Group is complementing its Appointed Representative (AR) network model with strategic stakes and takeovers:
- Heron Financial – increased to 74.5% and consolidated. Heron is described as the Group’s most productive AR firm.
- Lucra Mortgages – acquired, expanding First Mortgage Direct’s footprint in the South of England.
- The Mortgage Mum – 49% stake; joined the Group as an AR.
- Post period end: Evolve to 100% and Meridian moving to 100% in stages, consolidating two leading New Build specialists.
Cash consideration was £3.2 million in H1, with c.£4.6 million expected in H2 2025 and c.£1.5 million in 2026. Management expects these investments to exceed a >20% IRR hurdle – a clear statement of intent on returns.
Regulation and macro: potential tailwinds building
The FCA’s Mortgage Rule Review and July policy changes look supportive. Highlights include removal of the “advice trigger”, streamlined processes for term reductions and more flexibility on affordability assessments. In practice, this should make it easier for customers to remortgage between lenders and for brokers to retain clients beyond Product Transfers. Combine that with a bulge of fixed-rate maturities in 2025-26 and a more constructive lending environment, and you have a decent backdrop for MAB’s network.
Main Market move in 2026: why it matters
The Board intends to move from AIM to the Main Market (Equity Shares – Commercial Companies) in 2026, with an ambition to meet FTSE 250 criteria over time. Main Market status can broaden the investor base, improve liquidity, and sharpen governance optics. For a business already delivering double-digit growth, that could be a useful catalyst.
Risks and watchouts
- Margins – gross margin dipped 100bps as MAB invested for growth. The thesis is that productivity ramps will offset this; delivery needs monitoring.
- Dividend optics – a lower interim (7.2p) under the new payout framework may disappoint income-focused holders, even if the full-year split is more back-end loaded.
- Macro and policy – uncertainty ahead of the November 2025 Budget could dent sentiment in the near term.
- Execution – integrating Heron, Evolve and Meridian while pushing new data/AI initiatives requires tight execution to lock in promised returns.
My take: quality growth with sensible reinvestment
This is a strong set of interims. MAB is growing faster than the market, nudging up share, and doing it with excellent cash generation and low leverage. The purchase-led recovery, a swelling pipeline of refinancing, and FCA reforms create a supportive runway. The trade-off is near-term gross margin pressure as the Group funds adviser onboarding and centralised lead generation – a sensible choice if it sustains productivity gains already visible in the numbers.
Add in the Main Market ambition for 2026 and disciplined, capability-enhancing M&A, and the strategy hangs together. On balance, positive momentum outweighs the niggles. For investors, the key things to watch into year end are: adviser productivity, refinancing volumes, integration of New Build specialists, and confirmation that the new tech and data engine is driving higher conversion. If those land as planned, MAB looks well placed to deliver on its medium-term targets.
