Mortgage Advice Bureau (Holdings) plc Annual Report 2022

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FY2022 Annual Report · Mortgage Advice Bureau (Holdings) plc

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Mortgage Advice
Bureau (Holdings) plc
Annual Report 2022

Contents

Strategic report

Financial statements

Financial highlights . . . . . . . . . . . . . . . . . . . . . . . . . . 4

Operational highlights . . . . . . . . . . . . . . . . . . . . . . . . 5

Who we are . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

Chair’s statement . . . . . . . . . . . . . . . . . . . . . . . . . . 12

Chief Executive’s review . . . . . . . . . . . . . . . . . . . . . 14

Financial review . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

Financial performance
and future developments . . . . . . . . . . . . . . . . . . . . . 24

Consolidated statement
of comprehensive income . . . . . . . . . . . . . . . . . . . . 90

Consolidated statement
of financial position . . . . . . . . . . . . . . . . . . . . . . . . 91

Consolidated statement
of changes in equity . . . . . . . . . . . . . . . . . . . . . . . . 92

Consolidated statement of cash flows . . . . . . . . . . . . 93

Notes to the consolidated
financial statements . . . . . . . . . . . . . . . . . . . . . . . . 94

Principal risks and uncertainties . . . . . . . . . . . . . . . . 29

Section 172(1) statement . . . . . . . . . . . . . . . . . . . . . 41

Company statement of financial position . . . . . . . . . 153

Stakeholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44

Company statement of changes in equity . . . . . . . . . 154

Environmental performance and strategy . . . . . . . . . . 47

Environmental, Social and Governance . . . . . . . . . . . 49

Notes to the Company
statement of financial position . . . . . . . . . . . . . . . . 155

Glossary of Alternative
Performance Measures . . . . . . . . . . . . . . . . . . . . . 160

Glossary of terms . . . . . . . . . . . . . . . . . 163

Governance

Board of Directors . . . . . . . . . . . . . . . . . . . . . . . . . 60

Company information . . . . . . . . . . . . . . . . . . . . . . . 61

Directors’ report . . . . . . . . . . . . . . . . . . . . . . . . . . . 62

Corporate governance . . . . . . . . . . . . . . . . . . . . . . 65

Directors’ remuneration report . . . . . . . . . . . . . . . . . 74

Directors’ responsibilities
for the financial statements . . . . . . . . . . . . . . . . . . . 80

Independent auditor’s report . . . . . . . . . . . . . . . . . . 81

For more information
please visit our website

mortgageadvicebureau .com/investor-relations

“Despite a challenging year for mortgage intermediaries on numerous fronts, I am
pleased with our 2022 performance and market share growth, with revenue up 22% and
adjusted EBITDA up 15% on the prior year .

“Prior to the mini-budget in September, the Group was on track for 2023 to be a record
year of growth, despite an expected softening in housing transactions due to inflationary
pressures. Although mortgage transaction levels have improved since the collapse post
mini-budget, they remain circa 35% down year to date compared to the same period
in 2022.

“MAB is performing considerably better than wider transaction numbers reflect and
our market share is continuing to grow strongly. Current trading is in line with our
expectations and we expect a second-half weighted financial performance. This is a
strong performance considering the fall in gross mortgage approvals since October 2022
is of a similar scale to the fall seen during the Global Financial Crisis (“GFC”), rather
than the normal and more easily managed peaks and troughs we see during fluctuating
housing cycles.

“2022 was a milestone year for the business in terms of proposition delivery. Following
the acquisition of Fluent, MAB is well-positioned as a leader in the three largest
sectors for mortgage lead generation, comprising estate agency, new build, and price
comparison websites. The acquisition also extends the Group’s customer reach into
other specialisms including secured loans, which alone offers significant mortgage
re-financing opportunities.

“We also delivered the first stage of our centralised lead generation programme, which
is part of our major strategy to drive new lead flow to our partner firms in all market
conditions. We also delivered meaningful time savings in the advice process, with
excellent progress being made to deliver significant further time savings over the next
18 months. 2022 also saw the launch of MAB New Homes and a leading protection
proposition for the Directly Authorised market through the acquisition of Auxilium.

“We continue to invest in our employees, with the significant capital investment in our
Derby head office providing an excellent working environment to support the accelerated
growth expected in the medium term.

“We expect the housing and mortgage markets to recover as they always do, and in the
meantime, MAB continues to strengthen its proposition and use the more challenging
market to onboard more high-quality firms and grow market share.”

Peter Brodnicki
Chief Executive Officer

Strategic report | Financial highlights

Financial highlights

Revenue
£230.8m
2021: £188.7m . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .+22%

Gross profit
£62.9m
2021: £51.0m . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .+24%

Adjusted profit before tax1
£27.2m
2021: £24.2m . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .+13%

Adjusted EPS1
37.8 pence
2021: 37.1 pence . . . . . . . . . . . . . . . . . . . . . . . . . . . . +2%

Proposed final ordinary dividends
14.7 pence per share
2021: 14.7 pence per share . . . . . . . . . . . . . . . . . . . . -

1 In addition to statutory reporting, MAB reports alternative performance measures (“APMs”) which are

not defined or specified under the requirements of International Financial Reporting Standards (“IFRS”).
The Group uses these APMs to improve the comparability of information between reporting periods,
by adjusting for certain items which impact upon IFRS measures, to aid the user in understanding the
activity taking place across the Group’s businesses. APMs are used by the Directors and management
for performance analysis, planning, reporting and incentive purposes. A summary of APMs used and their
closest equivalent statutory measures is given in the Glossary of Alternative Performance Measures.

Strategic report | Operational highlights

Operational highlights

Adviser numbers
2,254
2021: 1,885 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .+20%

Average number of mainstream advisers
1,988
2021: 1,649 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .+21%

Market share of new mortgage lending
7.5%
2021: 6.4%1

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .+19%

Gross mortgage completions2
£27.3bn
2021: £22.8 bn . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .+20%

Acquisition of 75.4% of The Fluent Money Group3 (“Fluent”), the leading mortgage
and specialist lending intermediary for aggregators and other national lead sources.
The acquisition complements our exceptionally strong position with estate agency
and new build, and diversifies the Group’s operating model. Fluent is now fully
integrated into MAB.

Acquisition of 75% of Aux Group Ltd (“Auxilium”), a specialist protection provider
servicing Directly Authorised (DA) firms. Combining MAB’s and Auxilium’s protection
expertise will benefit ambitious DA firms.

1 MAB previously reported a 6.3% market share in 2021, but this figure has slightly increased due to UK

Finance updating its UK mortgage completions estimates.

2 First charge mortgage completions, excluding secured personal loans (second charge mortgages), later life
lending mortgages and bridging finance, and including completions from associates in the process of being
onboarded under MAB’s AR arrangements.

3 Acquisition of Project Finland Topco Limited, of which The Fluent Money Group Ltd is a wholly-owned

subsidiary.

Strategic report | Who we are

Who we are and what we do

Mortgage Advice Bureau is one of the UK’s leading
consumer intermediary brands and specialist appointed
representative networks for mortgage intermediaries.

MAB’s Appointed Representatives (“ARs”) and their
advisers specialise in providing mortgage advice to
customers, as well as advice on protection and general
insurance products.

Our proposition is aimed at high quality mortgage
broking firms with high growth and productivity ambitions
that MAB supports with our proprietary technology
and services, including adviser recruitment and lead
generation, learning and development, compliance
auditing and supervision, and digital marketing and
website solutions.

60%+ of our partner firms trade as Mortgage Advice
Bureau, that is the most widely recognised mortgage
intermediary brand in the UK. Our proprietary technology
platform, delivers operational efficiencies, and is used
by all our distribution to capture and nurture customers,
manage and distribute leads, support the advice and
mortgage application process, manage advice quality,
and provide an exceptional AR, adviser and customer
experience.

MAB has historically benefited from exceptionally strong
lead flow in the estate agency and new build sectors. The
acquisition of The Fluent Money Group (“Fluent”) in 2022
gives us a leading position with national lead sources
such as price comparison websites (“PCWs”), which
represent a growing proportion of consumer searches.
This gives us a dominant position in the three largest
lead sectors.

MAB has made a number of strategic investments
including Fluent that we expect to significantly escalate
our profit growth in the years ahead.

We are a cash generative and capital light business, that
delivers strong and consistent year on year growth and
returns for our investors.

60%+ of our partner firms
trade as Mortgage Advice
Bureau, the most widely
recognised mortgage
intermediary brand in the UK.

Our revenue model

MAB retains a revenue share from the following products
sold by the Advisers of its AR firms to customers. The
average number of Advisers in each financial year is one
of the key drivers of revenue.

2022
Revenue
£230.8m

15%

36%

46%

Mortgage Procuration Fees:
These are paid to MAB by lenders either via the L&G
Mortgage Club or directly.

Insurance Commissions:
From advised sales of protection and general insurance
policies.

Client Fees:
Paid by the underlying customer for the provision of
advice on mortgages, other loans and protection.

Other Income:
From services provided to directly authorised entities,
fees in relation to Later Life lending and Wealth and
ancillary services such as conveyancing and surveying.

Mortgage Procuration Fees

Insurance Commissions

Client Fees

Other Income

Strategic report | Who we are (continued)

Our performance since IPO

MAB has performed strongly and consistently in all market conditions since our IPO in 2014. Historic growth
trends are expected to continue, boosted by accelerated profit growth as a result of high quality and strategically
important investments and acquisitions made.

Adviser numbers

Mortgage completions

2,500

2,000

1,500

1,000

500

s
r
e
s
v
d
a
f
o
r
e
b
m
u
N

2,254

£30bn

1,885

1,580

1,457

1,213

1,078

950

790

634

2014

2015

2016

2017

2018

2019

2020

2021

2022

£25bn

£20bn

£15bn

£10bn

£5bn

s
n
o
i
t
e
p
m
o
c
e
g
a
g
t
r
o
M

Our compound annual growth rate (“CAGR”) in gross mortgage lending since our IPO in 2014 is 22%. This was
achieved in a stagnant UK housing market (0% CAGR since 2014), and illustrates our ability to grow our market
share in all market conditions.

UK housing transactions

MAB market share of gross new mortgage lending (first charge)

Adjusted profit before tax

1.2m

1.0m

1.5m

6.3%

1.3m

7.5%

5.7%

6.1%

£27.2m

4.1%

4.3%

4.7%

£24.2m

£18.7m

£17.8m

£15.7m

£14.5m

£10.4m

£8.0m

£12.5m

2014

2015

2016

2017

2018

2019

2020

2021

2022

Future growth

We aim to capitalise on maturing and new growth drivers. These, combined with our continuing significant investment,
high calibre management, resource, and technology, put MAB in a strong position to start accelerating growth over the
next few years.

Illustrative profit profile – Investments

Historic

Future

Revenue

Profit before tax

New national lead
model and investments offer
potential for accelerating
profit growth

Productivity has greatest
margin impact on
investments

Investments

ARs

Revenue

Profit before tax

Platform Speed | Ease | Efficiency

Lead Generation Growth | Productivity | Margin

Strategic report | Who we are (continued)

Establishing dominance
in lead generation

Since inception MAB has established an exceptionally
strong position in lead generation in its core markets
of estate agency and new build. Today, the Group has
relationships with over 2,000 estate agencies, and a
20%+ market share of the new build sector.

The acquisition of Fluent in 2022 has enabled MAB to
enter the price comparison website (“PCW”) sector as
a leader, thereby significantly increasing its customer
reach. PCWs represent a growing proportion of consumer

searches and this is therefore a strategically important
sector for MAB. This means MAB now has a dominant
position in the three largest lead sectors.

In turn, these three sectors all feed into MAB’s growing
client bank and through Fluent we have gained access
to a large additional pool of opportunities. We have also
developed and launched new processes and technology
to improve customer retention and continue to focus on
this strategically important area.

Estate Agency

Newbuild

PCWs / Digital

• Strong historic position with

estate agencies

• Relationships with over 2,000 estate

agency branches

• We retain a leading position with

locally generated leads

• MAB entered the newbuild market
in 2012 with the acquisition of
Mortgage Talk

• Leading ARs and invested partners
including First Mortgage, Meridian,
Evolve and Heron

• Launch of MAB New Homes in 2022
provides platform for strong growth

• Represent a growing proportion of

consumer searches

• MAB first secured PCW leads in 2021

• The acquisition of Fluent in July

2022 gives us a leading proposition
with PCWs and major national lead
sources

Client Bank

• Significant upside through continually growing client bank from the 3 largest lead sectors

• Large re-financing customer base gained through Fluent

• Technology driving increased retention

MAB completions by volume

Client Bank

Estate Agency

Newbuild

PCWs/Digital

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

Company headlines

• Exceptional management team and highly

• High standards of governance and board oversight

engaged employees

• Leading proprietary platform – MIDAS Platform

driving enhanced performance

• Leading consumer intermediary brand

• Award winning – over 200 industry awards

• Diverse and inclusive work environment

• Strong, sustainable returns

• Dividend policy to pay out a minimum of 75% of

adjusted earnings

• Meaningful impact on local communities with our

• Reputation for innovation and excellence

foundation, the Mortgage Advice Bureau Foundation

• Investments play a key part in our plans for

• MAB are a Platinum-rated Feefo member, with a score

accelerated growth

of 4.9 out of 5 from over 20,000 reviews

• Focus on exceptional quality and productivity

• Commitment to outstanding service

2022 in numbers

• Revenue: £230.8m (2021: £188.7m)
• Adjusted EBITDA: £29.1m (2021: £25.3m)
• 2,254 advisers at 31 December 2022 (2021: 1,885)
• £27.3bn gross mortgage completions (first charge) in 2022 (2021: £22.8bn)
• Continued strong growth in market share, to 7.5% in 2022

Strategic report | Chair’s statement

Dear Shareholder

Acquisitions

After an exceptionally strong year
in 2021 the momentum continued
into the beginning of 2022 with
favourable mortgage rates and high
employment supporting continued
consumer confidence. The sudden
outbreak of war with Russia in
Ukraine in February 2022 rapidly

unsettled markets and the threatened disruption to the supply
of energy drove a cost-of-living crisis, with consumer price
inflation accelerating.

Government initiatives to protect consumers from this
were introduced and mid-year MAB gave additional salary
increases targeted at the lower paid, of £1,000 to all head
office non-bonussed staff, and a cash bonus of £250 in
December, to help with the cost of living. Details of this and
other support are given in the Directors’ Remuneration Report.

The appointment of a new Prime Minister in August 2022
was followed by a disastrous mini-budget in September, and
its consequences were quick and far-reaching. Overnight
our market moved from being fairly stable and reasonably
confident, to almost the polar opposite. The sudden and
unexpected pace of mortgage rate increases, combined
with the tightening of mortgage lending criteria, resulted in
customers pausing both home-moving and re-financing plans.
The increase in mortgage rates from sub 2% to over 5% was
the largest seen in decades, severely affecting affordability
for both existing and prospective borrowers.

The second Government leadership change and ensuing
Autumn Statement in November 2022 helped to stabilise
markets. Although macro uncertainty remains for many
reasons, we expect mortgage rates to continue to stabilise,
allowing customers to re-enter the home-moving market and
to re-finance at more competitive mortgage rates than those
seen in recent months.

MAB delivered a record performance in 2022 whilst continuing
to make excellent progress on our strategic initiatives. In
a market where UK gross new mortgage lending reached
£313.9 billion, a 2% increase over 2021, the Group achieved
revenue of £230.8m, a 22% increase over 2021. This was
driven by a strong gain in market share to 7.5% (2021: 6.4%),
and a 21% increase in the average number of mainstream
advisers to 1,988 (2021: 1,649).

MAB’s adjusted PBT for the year was £27.2m, a 13%
increase compared to 2021, with adjusted earnings per
share of 37.8 pence, an increase of 2%. The Group remains
highly cash generative, with an operating profit to adjusted
cash conversion of 103% (2021: 113%). At 31 December
2022 total adviser numbers had grown by 20% to 2,254
(31 December 2021: 1,885). Net assets of the Group as at
31 December 2022 were £75.4m (2021: £41.0m).

A significant step in the delivery of our lead generation
strategy was completed with the acquisition of 75.4%
of Fluent, for £72.7m in cash, in July 2022. Fluent is a
fast-growing mortgage and specialist lending intermediary
that has formed strong relationships with aggregators and
other national lead sources, operating across first charge
mortgages, secured personal loans, later life lending
mortgages and bridging finance. MAB has historically held a
leading market position in estate agency, and subsequently
developed a very strong position in the new build sector.
The acquisition of Fluent enables MAB to enter the price
comparison website sector as a leader, thereby significantly
increasing our customer reach. Fluent has been successfully
integrated into MAB.

To part finance the acquisition of Fluent, MAB entered into
new debt facilities with NatWest, comprising a term loan of
£20m and a revolving credit facility (“RCF”) of £15m. At the
year end the term loan of £20m was fully utilised and a
drawdown of £3.2m on the RCF, produced an overall net debt
position of £16.0m, excluding restricted cash balances.

In 2022, MAB also acquired a 75% shareholding in the
Auxilium, a specialist protection service provider servicing
Directly Authorised (“DA”) firms, which extends the Group’s
addressable market into the DA sector. This is in addition to an
increase in our stake from 49% to 75% in leading protection
and general insurance advice firm Vita Financial Ltd.

Environmental, Social and Governance (ESG)

Consideration for ESG matters continue to be at the forefront
of our decision making and helps to shape the way in which
we engage with our stakeholders and the broader community.

The ESG section of the Annual Report sets out the excellent
progress we have continued to make in 2022. Our scope 1
(gas) and Scope 2 (electricity) emissions per employee, as
calculated using the UK Government’s 2022 GHG Conversion
Factors for Company Reporting, have decreased by 17%.

In 2022 we undertook a complete refurbishment of our head
office building in Derby, Capital House. Key features were the
re-design of all the working spaces to create a more modern
and inclusive environment, and improvements to the energy
efficiency of the building. I was delighted and impressed that the
team managing this complex project were able to complete it on
time and on budget. The result has been really well received by
our employees and reflects our continued focus on culture as
embedded through our MABology behaviours framework.

We also made very good progress in relation to diversity,
equality and inclusivity in the workplace, and are delighted to
be the winners of multiple awards at the People and Culture
awards in 2022, including in the “Overall Winner” category.

Consumer Duty

The Financial Conduct Authority published its final rules on
the Consumer Duty in July 2022, with rules coming into effect
on 31 July 2023. The Board approved the Group’s Consumer
Duty implementation Plan in October 2022, and the team have
made good progress against the planned activities, which
includes reviewing our processes, policies, communications,
and customer journey, to ensure we achieve good customer
outcomes through our interactions and engagement with
customers. We have always been committed to maintaining
our standards of high-quality advice and good customer
outcomes and believe the implementation of Consumer Duty
will strengthen further our governance and risk framework.

Board changes

Stephen Smith joined the Board as a Non-Executive Director
in January 2018 and through his long experience of the
mortgage lending and protection markets he has made an
invaluable contribution to the Group. His deep knowledge
and understanding of all aspects of advice contributed to
the continuing improvement in our Risk and Compliance
functions, and in developing improved systems and controls.
Stephen will be standing down at the AGM in May 2023 to
pursue other opportunities. We wish him well and I am grateful
to him for the advice and support he has given throughout his
time on the Board.

Mike Jones was appointed Chair of the Group Risk
Committee in October 2022 to ensure a smooth handover.
A search for a new Non-Executive Director has commenced.

Dividend

Our dividend policy is to pay out a minimum of 75% of adjusted
earnings. Our high cash conversion allows this return to be made
to shareholders, whilst at the same time continuing to deliver on
our growth strategy.

The Board is pleased to recommend the payment of a final
dividend for the year of 14.7 pence per ordinary share. This
brings the total proposed dividend for the year to 28.1 pence
per ordinary share, reflecting the Group’s policy to pay dividends
reflecting a minimum pay-out ratio of 75% of the Group’s
adjusted earnings for the year. If approved, the final dividend
will be paid on 31 May 2023 to shareholders on the register
on 28 April 2023. Dividends paid during the year amounted to
£17.3m and were in respect of the final dividend for the year
ended 31 December 2021, and the interim dividend for the
year ended 31 December 2022.

Outlook
There are signs of increasing activity in the mortgage market
and rates are already lower than the peaks forecast at
the time of the disastrous mini-budget in September last
year. As lenders reduce their rates further and relax their
underwriting criteria, affordability will improve and consumer
confidence will revive, enabling both home movers and first
time buyers to return to the housing market.

MAB remains highly cash generative, with an ability to swiftly
adapt to changing market conditions. Despite the various
market and political challenges, MAB is trading in line with
expectations, continues to significantly outperform the sector
and remains very well positioned to continue to grow its
market share strongly through 2023.

Katherine Innes Ker

Chair

27 March 2023

Strategic report | Chief Executive’s review

Current trading and outlookAlthough the volume of new mortgage approvals was down by more than 40% in the three months ended 31 January 2023 (and Buy to Let approvals were down by more than 60%), UK Finance forecasts increased re-finance activity in 2023 as 1 .8 million borrowers reach the end of their existing deals and need to re-finance onto new ones . Current activity levels are better than in Q4 2022, however new mortgage volumes reported in the market remain low . There are early signs of increasing activity, for instance the volume of mortgage searches carried out by advisers on leading mortgage sourcing technology platform Twenty7tec is recovering rapidly, with 10 of their busiest days ever having occurred in February 2023 . Mortgage searches in the first two months of the year are up 10% year-on-year . Once affordability and consumer confidence return, we expect the market to recover further as lenders reduce mortgage rates and gradually relax lending criteria . As expected, mortgage rates are already far cheaper than they were following the peak post the mini-budget but have now settled at levels that are very different to rates available a year ago . Despite the current headwinds the Group is trading in line with expectations and continues to outperform the market, successfully growing its market share . Mortgage pipelines are also showing signs of completing more quickly, having been congested for the last few years, and we continue to expect a second-half weighted financial performance .MAB’s long term fundamentals remain strong . We anticipate a strong year ahead for re-financing, a slow but steady improvement in consumer confidence and housing transaction levels, combined with an increase in new appointed representative (“AR”) recruitment and the incremental impact of new lead generation initiatives . We are confident that we will continue to grow market share in a tough market this year . MAB is in a very good position to deliver a far stronger financial performance in 2024 .Overview of 2022
I am very pleased to report the Group delivered another record performance in 2022, with revenue for the year up 22% to
£230.8m (2021: £188.7m) and adjusted profit before tax (“PBT”) up 13% to £27.2m (2021: £24.2m).

The strong increase in revenue was driven by organic(1) growth of 11%, significantly outperforming the market, and the positive
contribution of The Fluent Money Group (“Fluent”) following its acquisition in July. The 20% increase in the Group’s mortgage
completions(2) is summarised as follows:

New mortgage completions

Product Transfers

Gross mortgage completions(2)

2022 £bn

2021 £bn

Increase

23.6

3.7

27.3

19.6

3.2

22.8

+21%

+16%

+20%

By comparison, UK gross new mortgage lending activity (excluding Product Transfers) in 2022 rose by just 2% to £313.9bn
(2021: £308.1bn(3)). MAB increased its market share of UK new mortgage lending by 19% to 7.5% (2021: 6.4%(3)), with our
market share in the second half increasing to 8.2% (H2 2021: 7.1%), and showing strong momentum carrying into 2023.

The total number of advisers at the year-end was up 20% to 2,254(4) (2021: 1,885), including 182 advisers at Fluent, with the
average number of mainstream(5) advisers during the year up 21% to 1,988 (2021: 1,649), representing organic growth of 15%.

Delivering our growth strategy
2022 was a year of significantly delayed transactions and
product withdrawals and repricing. The mini-budget in
September resulted in an immediate and significant knock to
economic and consumer confidence, with the associated leap
in mortgage interest rates having a severe impact on housing
transactions, whilst also delaying existing customers re-fixing
their rates when re-financing.

At the half year we highlighted that an expected softening
in housing transactions would result in some ARs taking a
more cautious view of growth. However, many others that had
remained growth focused, including Fluent, immediately cut
their expectations and adviser base following the mini-budget
due to the negative short-term outlook.

Although the unexpected and extreme market conditions
adversely impacted our short-term growth objectives, MAB
made major strides in further strengthening its customer,
adviser, and AR propositions. Our focus on improving
operational efficiency, realising synergies and reducing costs
has ensured that MAB is well-positioned to build on the
significant market share gains made in 2022 and achieve its
growth objectives over the medium to long term.

■ Acquisition of Fluent

With MAB already holding a strong market position in estate
agency and new build, we identified that price comparison
websites were attracting an increasing number of customers
researching and seeking mortgage advice. Our acquisition
of Fluent has enabled MAB to enter this sector as a leader,
significantly increasing our customer reach and ability to help
more customers at all stages of their research process.

Fluent also provides access to the large retention market
outside of MAB’s existing customer base, whilst adding
secured loans and bridging finance to the services MAB
can offer. The Group’s existing equity release expertise
and resources have also been enhanced as a result of the
acquisition, with Fluent now fully, and successfully, integrated
into MAB.

■ Delivering on lead generation strategy

Our strategy is about investing in our future customers as
much as those we are currently advising, supporting our plans
to contribute significantly to the lead flow of our AR firms.

Organic means the Group before the impact of the acquisitions made in 2022 (Fluent, July 2022; Vita, July 2022; and Auxilium, November 2022).

First charge mortgage completions, excluding secured personal loans (second charge mortgages), later life lending mortgages and bridging finance, and
including completions from associates in the process of being onboarded under MAB’s AR arrangements.

In 2021 we reported £313.2bn of UK mortgage completions based on UK Finance’s latest estimates at the time. UK Finance revised that estimate downwards
since then, implying MAB’s 2021 market share increased slightly from the previously reported 6.3% to 6.4%.

Includes 182 Fluent advisers as at 31 December 2022 (105 advisers in the first charge mortgages division, 57 in the secured personal loans division, 14 in the
later life division, and 6 in the bridging finance division). Includes a total of 180 advisers at 31 December 2022 who are later life advisers or advisers in directly
authorised firms that use MAB’s subsidiary, Auxilium, a specialist protection service provider, for protection. For both later life and directly authorised advisers the
fees received by MAB represent the net income received by MAB as there are no commission payouts made by MAB.

Excludes directly authorised advisers, MAB’s later life advisers and advisers from associates in the process of being onboarded under MAB’s AR arrangements.
Includes Fluent’s second charge, later life and bridging advisers who have a higher revenue per adviser than first charge advisers.

Strategic report | Chief Executive’s review (continued)

We recognise that securing long-term business success
comes from gaining an in-depth understanding of current and
prospective clients. During the year we launched tools that
empower our future customers to gain a better understanding
of financial products and solutions through our Homebuying
and MyMAB apps and website, simultaneously equipping
ourselves with detailed customer insights to inform future
proposition development.

At MAB, innovation is not all about technology. It’s also about
human behavioural change and business process change.
Our strategy has been focused on lead generation, business
quality, customer and broker experience, and consumer
education. We have focused on early lead capture to widen
the funnel of opportunities for our brokers in all market
conditions, increasing the number of potential buyers and
using educational coaching to get customers mortgage ready.
Data insights captured during this process can significantly
improve the quality of the customer experience, and ultimately
their conversion at point of advice.

We are also releasing a series of post-completion retention
solutions to ensure we always remain at the front of existing
customers’ minds. This includes regular mortgage reviews
as well as early re-financing lead generation opportunities for
advisers.

■ Shortening the advice process

Our aim is to reduce the 10-hour average for an adviser to
take a mortgage from enquiry to completion to less than
five hours by eliminating duplication and allowing data to
move more freely across our digital ecosystem. In addition
to driving new adviser growth and increased productivity, the
integration of new technology with our key business partners
will enable customers to auto-disclose and verify their identity,
self-serve their eligibility and affordability, and share data and
documents in a secure environment, with the new technology
solutions launched during the last year already resulting in a
time saving of more than one hour.

■ Launch of MAB New Homes to builder partners

Following our recent investment in New Homes specialists
Evolve and Heron, we have launched a market-leading panel
of specialist new build firms to meet the future requirements
of our major new build partners nationally. This includes a new
technology-led approach to early capture and nurture, and
the financial qualification process for the MAB New Homes
proposition that allows self-service customer data capture,
document capture, and extraction, which we expect to
underpin continued year on year market share growth.

■ Immediate benefits of new working environment

We are committed to fostering an inclusive environment
where all our staff can contribute to the innovation and digital
transformation of the business. In October we stripped our
existing head office building in Derby back to its shell, paving
the way for the creation of a new collaborative working
environment that caters for hybrid working and delivers a
range of work settings for up to 300 employees.

We understand all our employees and teams have different
needs in terms of their wellbeing and how they work, which
is why we have provided an office space that caters to those
needs, levels of accessibility, and unique work styles. These
bespoke working environments will offer flexibility in how
we work and cater to our diverse colleagues, enabling them
to thrive and perform at their very best. In line with our ESG
objectives, one of our key aims in the refurbishment was to
reduce the environmental impact of the office and provide an
outstanding experience for our staff, customers and ARs. We
have successfully delivered this.

The positive impact of the new working environment on
staff performance and collaboration has been immediate,
underpinning our plans for strong market share and profit
growth over the medium and long term.

■ Optimising our addressable market

Following the acquisition of Fluent, in November MAB
acquired a 75% shareholding in Auxilium, a specialist
protection service provider servicing Directly Authorised
(“DA”) firms. In addition, the Group increased its stake in
leading protection and general insurance advice firm Vita,
from 49% to 75%.

Access to the protection expertise MAB has developed over
the last two decades will greatly benefit the forward-thinking
and ambitious DA firms that the Auxilium proposition is
aimed at.

Additionally, to enhance the provision of pension and
investment advice to our mortgage customers that have those
requirements, we have partnered with St James’s Place who
will provide a highly complementary support structure for
these products and services, to that offered by MAB to its AR
firms for mortgages and protection.

In Australia, the technology integration with our joint
venture partner, Australian Finance Group Ltd, is expected
to complete in the second half of this year, allowing us to
progress our growth plans there.

■ Summary

Despite the market downturn, 2022 was a very important
year for MAB. We have continued to invest in our customer
and adviser experience, our environmental agenda, and
our people, by creating an optimal working environment
influenced by them. We also continue to futureproof our
business by entering new growth sectors and investing in
prospective customers at the early stages of their research.
We believe this will have a significant medium to long-term
impact on adviser productivity, organic adviser growth, and
AR recruitment, further driving MAB’s market share growth
and profitability.

We have taken a proactive and rigorous approach to costs,
whilst progressing with the planned investment in our
proposition to ensure the strongest possible recovery and
continued market share growth. We are recruiting well from a
wide range of networks and increasingly from the DA sector
and are using a subdued housing market to embed new
technology solutions and processes, whilst ensuring all cost
efficiencies, synergies and best practices are implemented at
Fluent to deliver optimal performance.

The executive team has been strengthened in marketing and
in risk and compliance to reflect our market share ambitions,
and our invested-in businesses continue to perform strongly
in terms of adviser productivity and will increasingly contribute
to market share and profitability growth.

Despite a slower than expected start to the year for the
housing market, we anticipate an increasingly strong year
ahead for re-financing, with a slow but steady improvement
in housing transaction levels and an increase in new AR

recruitment. We expect organic growth to resume in the
second half when we also expect to see the incremental
impact of our new lead generation initiatives. We will continue
to grow our market share strongly this year, whilst ensuring
that MAB will be in an even better position to deliver a far
stronger financial performance in 2024.

Market review 2022
The year started positively after the market had returned to
steadier levels of activity towards the end of 2021. Consumer
demand remained quite strong and fewer properties for sale
kept house price momentum high. Pipelines continued to
be highly congested, with transactions taking more than
140 days to complete, frustrating the pace of completions.

The Russian invasion of Ukraine in February resulted in a
degree of consumer caution. However, despite the uncertain
macroeconomic outlook and rising inflation, housing demand
and activity remained quite strong.

Overall, UK gross new mortgage lending(1) was up 2% to £313.9bn (2021: £308.1bn(2)). The purchase segment decreased by
11% as the overall number of housing transactions decreased by 15%, as illustrated below:

UK property transactions by volume

Source: UK Finance

First charge mortgage completions, excluding secured personal loans (second charge mortgages), later life lending mortgages and bridging finance.

We reported £313.2bn in 2021, based on UK Finance’s latest estimates at the time.

Strategic report | Chief Executive’s review (continued)

In September 2022, the mini-budget triggered significant market uncertainty, an immediate spike in the cost of borrowing, the
withdrawal of many mortgage products by lenders, and a rapid tightening in underwriting criteria. After a short flurry of activity
where customers rushed to secure low mortgage rates before they were withdrawn, housing-related activity slowed significantly
throughout Q4. The rate of approvals for new mortgages in the last two months of the year and in January 2023 was down by
more than 40% year-on-year, which will impact completions in the first half of this new financial year, as illustrated below:

Approvals of new mortgages and mortgage rates

In terms of mortgage completions(1), the re-financing segment was relatively strong throughout 2022. Re-mortgage completions
were up 29% year-on-year, partly because the 2021 mortgage market was skewed towards purchase. Product transfer
completions increased by 3%, with a stronger second half (9% increase year-on-year in H2 2022). Buy-to-let completions were up
18% compared to 2021, although the buy-to-let segment has been particularly adversely impacted since the mini-budget.

The trends in gross new mortgage(1) lending completions are illustrated in the graph below.

New mortgage lending by purpose of loan

Source: UK Finance

First charge mortgage completions, excluding secured personal loans (second charge mortgages), later life lending mortgages and bridging finance.

Source: UK Finance

Average house prices increased by 10% in 2022, although the increase slowed in the second half, with the average house price
starting to fall by the end of the year. This negative trend has continued in early 2023 but we expect house prices will start to
settle once affordability and consumer confidence improve.

As we look further into 2023, a large number of mortgage products that were withdrawn following the mini-budget have been
recently re-introduced, as illustrated on the graph below. We expect product availability to continue to catch up throughout
2023, and underwriting criteria should also continue to slowly ease.

Mortgage product availability on Twenty7tec platform

New mortgage rates are looking more attractive than they
were at the end of 2022, albeit mortgage pricing may have
found its floor, certainly for now. With a 2%+ gap between the
price of many new mortgage deals and the typical Standard
Variable Rates, borrowers are increasingly looking to re-
finance in 2023, whereas many chose to sit on their hands at
the end of last year.

Pipelines are now completing more quickly than in 2022. This
reflects the heightened capacity conveyancers now have due
to the market slowdown, and to a lesser degree, a greater
level of property stock available for sale. Re-financing also
banks quickly, and very few of these cases fail to progress to
completion.

Source: Twenty7tec

Strategic report | Chief Executive’s review (continued)

The volume of mortgage searches carried out by advisers on leading mortgage sourcing technology platform Twenty7tec is
also recovering rapidly, with ten of their busiest days ever having occurred in February 2023. Mortgage searches in the first two
months of the year are up 10% year-on-year. This is illustrated in the graph below.

Twenty7tec mortgage searches and proportion of purchase-related searches

Source: UK Finance, Statista

2022 saw intermediaries’ share of UK residential mortgage(1) transactions increase from 80% to 84% (excluding Buy to Let,
where intermediaries have a higher market share, and Product Transfers where intermediaries have a lower market share), and
the Intermediary Mortgage Lenders Association (“IMLA”) expects this trend to continue in 2023 and 2024.

UK Finance predicts a 12% fall in gross new mortgage(1) lending in 2023, to £275bn, caused by affordability pressures. IMLA’s
estimate for 2023 is £265bn. For 2024, UK Finance and IMLA currently forecast further reductions to £253bn and £250bn
respectively. These estimates were published in December 2022.

For the past 20 years, UK mortgage approval levels have followed a similar pattern as the proportion of UK housing owned,
as illustrated in the graph below. Both are below long-term averages, with home ownership having reduced to circa 64% from
70% in the early 2000’s. There is currently considerable political focus on increasing home ownership across all political parties,
which further supports MAB’s long-term fundamentals.

1 First charge mortgage completions, excluding secured personal loans (second charge mortgages), later life lending mortgages and bridging finance.

UK mortgage approvals and property ownership

Despite the inflationary environment and continued geopolitical uncertainty, consumer demand for housing and mortgages
remains at a steady, albeit reduced level. This, combined with the increased number of mortgage products we have seen
re-introduced, means we remain confident that heightened activity will return to the housing and mortgage market once
affordability improves and consumer confidence starts to rise.

Source: UK Finance, Statista

Strategic report | Chief Executive’s review (continued)

Progress with regulatory change
■ Consumer Duty

The Financial Conduct Authority (“FCA”) has set out rules
that require all regulated firms to consider the needs,
characteristics, and objectives of their customers, to ensure
they are always acting to consider and deliver optimal
customer outcomes. These rules include the need to show
consideration, flexibility, and attention to customers with
characteristics of vulnerability. This new Consumer Duty sets
higher and clearer standards of consumer protection across
financial services and requires firms to put the needs of their
customers first and comes into effect on 31 July 2023.

Good customer outcomes have always been central to MAB’s
strategy. In line with the requirements and timeline set out
by the FCA, MAB submitted its ‘Consumer Duty Plan’ for
approval by the Board prior to the 31 October 2022 deadline.
Since then, work has continued to ensure the requirements
of the FCA’s new Consumer Duty are understood and where
changes are required, that these are implemented across the
business ahead of the 31 July 2023 implementation date.

ESG (Environmental, Social, Governance)
At MAB, we believe in the need to make a positive
contribution to all our stakeholders. This in turn will help us
become a better company with a more engaged workforce
and strengthen our competitive advantage. In 2022 we
accelerated our investment in this area and made good
progress on all our ESG initiatives.

■ Minimising our impact on the environment

We completed our major office refurbishment project in 2022,
with all colleagues moving back into head office in early
January this year. Minimising our environmental impact was a
central consideration for this project, as was sourcing products
from local suppliers where practical, repurposing furniture and
so on. The building has been fitted with high efficiency new
heating, ventilation and lighting equipment, and we are pleased
that its EPC rating has dramatically improved as a result.

MAB is at the forefront of Green Mortgages. In 2022, we
launched our Green Hub for consumers and continued
to improve our MIDAS platform to best promote Green
Mortgages to our advisers. Our ARs submitted over £1 billion
in Green Mortgages to our lending partners, which was a very
substantial increase versus 2021. We also organised the first
industry event exclusively focussed on Green Mortgages.

The narrative around Green Mortgages is rightly becoming
more prominent and important, with momentum and interest
gathering from advisers, consumers and from lenders. Clear
targets have been set for landlords firstly to make various
energy efficiency improvements to their properties, and then
homeowners the same, over the next decade or so. Our
intention is to become a leader in Green Mortgages. With
housing representing circa 20% of carbon emissions in the
UK, we will increase our involvement in this area, thereby
directly contributing to the UK’s overall Net Zero targets,
whilst significantly helping many thousands of customers too.

MAB already serves a great social purpose, in-so-much as
it helps customers to buy and re-finance their homes and
protects them as well. With an increasingly environmental
focus layered onto this, MAB can make a significant
contribution towards the UK Government’s climate
commitments.

■ Community engagement and charitable activities

2022 also saw the launch of the Mortgage Advice Bureau
Foundation (“Foundation”). The Foundation is a grant-giving
charity that supports community-based projects chosen by
our staff, our customers, and our business partners. It was
created to promote awareness among our stakeholders of the
growing need of the communities they live in or are choosing
to move to.

The Foundation supports projects in the following areas:

• Environment and Conservation - practical and educational
projects to help communities make green choices and
reduce their carbon footprints;

• Health and Wellbeing - projects to help communities

address health and wellbeing issues so that everybody’s
quality of life can be improved; and

• Preventing and Relieving Poverty - projects to support
communities through financial hardship and social
exclusion.

The Foundation launched in September 2022 and to date
has pledged £17,000 of funding which has helped charitable
projects raise over £30,000 in total. We are delighted with
the buy-in and support the Foundation has received from our
business partners and colleagues.

■ Employee wellbeing, and diversity, equality and inclusivity

The newly refurbished head office in Derby includes many
new features that foster colleague wellbeing and increase
inclusivity among our employees. In 2022 we launched a
number of new training initiatives, some of which have been
specifically designed to develop women across the business.

We ran an employee wellbeing calendar covering the
financial, emotional and physical aspects, offering support
to employees across a variety of topics through webinars or
in person. We now promote staff volunteering days and have
expanded our benefits to all employees.

In response to the cost-of-living crisis that persisted
throughout 2022, the Board awarded an additional £1,000
pay rise as well as a £250 one-off cash bonus to all eligible
non-bonused head office employees. We continued to build
our own in-house ESG team and also appointed a specialist
ESG consultancy firm. Consequently, we now have a very
clear plan and timelines under which we will make further
progress on what we have achieved over the last year. We
are excited about the central role we can play in helping
homeowners and landlords to achieve good outcomes with
regards to making their homes more energy efficient.

Strategic report | Financial review

We measure the development, performance and position of our business against a number of key indicators:

Revenue
£230.8m

Adjusted profit before tax*
£27.2m

Adjusted earnings per share*
37.8p

£230.8m

£188.7m

£27.2m

£24.2m

37.1p

37.8p

30.1p

28.6p

£148.3m

£143.7m

£18.7m

£17.8m

2019

2020

2021

2022

2019

2020

2021

2022

2019

2020

2021

2022

Total income from all revenue streams.

Strategy / objective
Shareholder value and financial performance.

Profit before exceptional items and tax.

Strategy / objective
Shareholder value and financial performance.

Total comprehensive income attributable to equity
holders of the Company, adjusted for exceptional
items, divided by total number of ordinary shares.

Strategy / objective
Shareholder value and financial performance.

Gross profit margin
27.3%

Administrative expenses ratio*
15.6%

Adjusted EBITDA margin*
12.6%

26.9%

27.0%

27.3%

25.3%

14.5%

14.8%

15.6%

12.4%

13.4%

12.5%

13.4%

12.6%

2019

2020

2021

2022

2019

2020

2021

2022

2019

2020

2021

2022

Gross profit generated as a proportion of revenue.

Strategy/objective
Managing gross margins.

Administrative expenses as a proportion
of revenue.

Strategy/objective
Operating efficiency.

Earnings before interest, tax, depreciation
and amortisation as a proportion of revenue.

Strategy/objective
Shareholder value and financial performance.

Adjusted profit before tax margin*
11.8%

Adviser numbers
2,254

Capital adequacy
£26.8m

13.0%

12.0%

12.8%

11.8%

2,254

1,885

1,580

1,457

2019

2020

2021

2022

2019

2020

2021

2022

Adjusted profit before tax* as a proportion
of revenue.

Strategy/objective
Shareholder value and financial performance.

Average number of mainstream advisers1
for 2022 was 1,988 (2021: 1,649).

Strategy/objective
Increasing the scale of operations.

£26.8m
Excess
Capital

£18.9m
Excess
Capital

£17.1m
Excess
Capital

£11.7m
Excess
Capital

£3.1m

£3.4m

£4.3m

£5.5m

FCA 2019

FCA 2020 FCA 2021

FCA 2022

Excess capital requirements over amounts required by
the Financial Conduct Authority (FCA).

Strategy/objective
Financial stability.

Unrestricted cash balances / (Net debt)

Net cash / (debt)

£7.0m

£18.6m

£17.6m

£(16.2)m

Unrestricted cash balances

£18.6m

£17.6m

£7.0m

£7.2m

2019

2020

2021

2022

Bank balances at 31 December available for use in
operations.

Strategy/objective
Financial stability.

1 Excludes directly authorised advisers, MAB’s later life advisers and advisers from associates in the

process of being onboarded under MAB’s AR arrangements. Includes Fluent’s second charge, later life
and bridging advisers who have a higher revenue per adviser than first charge advisers.

* In addition to statutory reporting, MAB reports alternative performance measures (“APMs”) which are

Strategic report | Financial performance and future developments

■ Revenue

Revenue increased by 22% to £230.8m (2021: £188.7m), with organic(1) revenue growth of 11% driven by a 15% increase in the
average number of organic(1) mainstream advisers(2), resulting from a combination of existing ARs’ expansion, the recruitment of
new ARs, and a 4% reduction in revenue per organic mainstream adviser. As previously reported, both completions and adviser
recruitment in Q4 were adversely impacted following the mini-budget, with a reduction in the number of organic mainstream
advisers in Q4 as our AR firms began to reduce their headcount in line with lower expected H1 2023 purchase activity.

Fluent, which was acquired on 12 July 2022, added another 182 mainstream advisers to the Group as at 31 December 2022,
and contributed an additional £21.9m of revenue during the year. Auxilium, which was acquired on 3 November 2022, added
another 161 directly authorised advisers to the Group as at 31 December 2022, and contributed an additional £0.2m of revenue.
In addition, MAB increased its stake in Vita from 49% to 75% on 12 July 2022, with its adviser numbers and revenues already
incorporated into the Group’s figures due to it having been an AR of the Group since 2016.

The Group continued to generate revenue from three core areas, with all key income sources growing strongly as set out below.

Income source (£m)

Mortgage procuration fees

Protection and General Insurance Commission

Client Fees

Other Income

Total

2021

Increase

2022

106.6

82.1

36.3

5.8

85.1

75.3

23.2

5.1

230.8

188.7

+25%

+9%

+56%

+16%

+22%

MAB’s organic(1) revenue growth across the three core areas was as follows:

Income source (£m)

Mortgage procuration fees

Protection and General Insurance Commission

Client Fees

Other Income

Total

2022

2021

Increase

99.0

80.5

23.7

5.4

85.1

75.3

23.2

5.1

+16%

+7%

+2%

+8%

208.6

188.7

+11%

MAB’s organic banked mortgage(3) mix had a considerably lower proportion of house purchase business compared to the prior
year. This was due to an increase in re-financing, especially the proportion of product transfer completions by volume, which
have a lower average procuration fee and typically have lower protection, general insurance and client fee attachment rates
than other mortgage types.

Product Transfers in the period increased to 21% of MAB’s mortgages(3) (2021: 13%). Consequently, while the Group’s organic
net mortgage(3) completions by value increased by 17%(4), mortgage procuration fees increased by 16%, protection and general
insurance commissions increased by 7% and client fees increased by 2%. MAB’s organic average mortgage size increased by
10% compared to the prior year, in line with average house prices increasing by 10% year-on-year.

MAB’s total revenue from re-financing (including both re-mortgages and product transfers) represented circa 32% (31% on
an organic basis) of total revenue (2021: 25%) due to the Group’s organic banked mortgage mix having a higher proportion
of re-financing and Fluent having a higher proportion of re-financing in its first charge mortgage mix and with the prior year
reflecting a particularly high level of purchase transactions.

1 Organic means the Group before the impact of the acquisitions made in 2022 (Fluent, July 2022; Vita, July 2022; and Auxilium, November 2022).
2 Excludes directly authorised advisers, MAB’s later life advisers and advisers from associates in the process of being onboarded under MAB’s AR arrangements.

Includes Fluent’s second charge, later life and bridging advisers who have a higher revenue per adviser than first charge advisers.

3 First charge mortgage completions, excluding secured personal loans (second charge mortgages), later life lending mortgages and bridging finance.
4 Stated before completions from associates in the process of being onboarded under MAB’s AR arrangements to produce more appropriate comparisons against

revenue metrics.

Fluent’s revenue contribution across the Group’s three core business areas in the period following completion of the acquisition
was as follows:

Income source (£m)

Mortgage procuration fees

Protection and General Insurance Commission

Client Fees

Other Income

Total

12 July 2022 – 31 Dec 2022

7.6

1.4

12.5

0.4

21.9

Fluent generates revenue from a wider range of mortgage types than MAB, including first charge mortgages, secured personal
loans (second charge mortgages), later life lending mortgages and bridging finance. Fluent earns revenue on first charge
mortgages in the same way as MAB. In its other divisions, Fluent predominantly earns procuration and client fees, with a
smaller proportion of protection and general insurance commission earned on loans arranged for its customers.

Auxilium, a specialist protection service provider, contributed revenue of £0.2m for the two months following its acquisition.
Auxilium’s revenues represent the total income received and accordingly are classified under Other Income, with there being
no commission payouts to the directly authorised entities serviced by the business.

The proportion of organic revenue derived from each of the Group’s core revenue streams has remained relatively stable as
summarised below, with small movements reflecting the change in banked mortgage mix during the period.

Income source

Mortgage Procuration Fees

Protection and General Insurance Commission

Client Fees

Other Income

Total

2022

47%

39%

11%

2021

45%

40%

12%

100%

The proportion of total revenue derived from each of the Group’s core revenue streams has changed slightly, with client fees as
a proportion of total revenue increasing following the acquisition of Fluent, as summarised below.

Income source

Mortgage Procuration Fees

Protection and General Insurance Commission

Client Fees

Other Income

Total

2022

46%

36%

16%

2021

45%

40%

12%

100%

In first charge mortgages we expect client fees to become increasingly dependent upon the type and complexity of the
mortgage transaction, as well as the delivery channel, leading to a broader spread of client fees on mortgage transactions,
which represent the Group’s lowest margin revenue stream.

Strategic report | Financial performance and future developments (continued)

■ Gross profit margin

■ Adjusted EBITDA, profit before tax and margin thereon

Gross profit margin for the year was 27.3% (2021: 27.0%)
reflecting the anticipated increase following the acquisition
of Fluent, which has a slightly higher gross profit margin than
MAB. Excluding the impact of Fluent, Vita and Auxilium, MAB’s
gross profit margin was 26.5% (2021: 27.0%) reflecting the
increased proportion of re-financing transactions in 2022,
and the slightly reduced revenue share the Group receives
as existing ARs grow organically by increasing their adviser
numbers. In addition, larger new ARs typically join the Group on
lower-than-average margins due to their existing scale, hence a
degree of erosion is expected in MAB’s underlying gross profit
margin (prior to the impact of the Fluent acquisition) due to the
continued growth of our existing ARs and the addition of new
larger ARs.

Looking ahead, we expect any further erosion in underlying
gross margin to be offset by economies of scale reducing the
Group’s overheads ratio.

■ Administrative expenses

Group administrative expenses increased by £8.2m (+29%)
to £36.0m, mainly reflecting the impact of the acquisitions of
Fluent and Vita. Organic adjusted administrative expenses
increased by £2.3m (+8%) to £30.1m, reflecting MAB’s
continued investment in growth, and specifically in its
technology platform and marketing team through a mix of
employee and third-party costs, which will drive enhanced lead
generation opportunities. Head office costs, including those
of First Mortgage, and compliance costs also increased to
support the Group’s continued growth. All development work
on MAB’s MIDAS platform continues to be fully expensed.
Organic adjusted administrative expenses as a percentage of
revenue reduced slightly to 14.4% (2021: 14.8%).

MAB continues to benefit from the relatively fixed cost nature
of much of its cost base, where those costs typically rise at
a slower rate than revenue, which will, in part, counter the
expected slight erosion of MAB’s underlying gross margin as
the business continues to grow.

During the year MAB awarded mid-year pay rises as well as
a cash bonus to a number of staff, in addition to their usual
annual pay rise, to help with the increasing costs of living.

■ Associates and investments

MAB’s share of profits from Associates was £0.7m (2021:
£1.0m) with the majority of the Group’s Associates being
adversely impacted by the fall-out from the mini-budget.

In addition, the Group recognised a £2.8m non-cash write
off on its investment in Boomin with the company being put
into liquidation after failing to secure new investors in the
challenging economic climate.

Management believes that the value of a number of
its associate investments exceeds their carrying value
recognised using the equity accounting method under IAS 28.

Adjusted EBITDA* was up 15% to £29.1m (2021: £25.3m), with
the margin thereon of 12.6% (2021: 13.4%) mainly reflecting
the impact of the Fluent acquisition with limited revenue
synergies achieved in the year of acquisition (as expected).

Adjusted profit before tax* was up 13% to £27.2m (2021:
£24.2m), with the margin thereon of 11.8% (2021: 12.8%).
Statutory profit before tax reduced to £17.4m (2021: £23.2m)
purely due to acquisition-related costs, amortisation of
acquired intangibles and non-cash operating expenses
associated with the put and call option agreements on recent
acquisitions. As a result, the margin on statutory profit before
tax was 7.5% (2021: 12.3%).

Fluent, Vita and Auxilium contributed profit before tax of
£1.5m, £0.05m and £0.1m respectively in the periods since
acquisition. These figures exclude the impact of any non-cash
charges associated with the put and call options for Fluent
and Auxilium.

Adjusted profit before tax* as a percentage of net revenue*
was 34.0% (2021: 41.0%) primarily due to the effect of the
Fluent acquisition and the change in banked mortgage mix.

■ Finance revenue

Finance income of £0.1m (2021: £0.05m) reflects the low
interest rates that prevailed for most of the financial year and
interest income accrued on loans to associates.

On 28 March 2022 MAB entered into new four-year debt
facilities with NatWest, comprising a £20m Term Loan (the
“Term Loan”) and a £15m revolving credit facility (the “RCF”) to
be used in connection with the acquisition of Fluent. The RCF
is also available for general corporate purposes. There is an
option to extend the RCF and the Term Loan for a further year.

Finance expenses of £1.2m (2021: £0.2m) include £0.6m of
interest and non-utilisation fees payable on MAB’s previous
and new debt facilities and the interest expense on lease
liabilities and a further £0.6m relating to the unwinding of the
redemption liability relating to the Fluent Option.

■ Taxation

The increase in the effective rate of tax on reported profit before
tax to 26.4% (2021: 16.9%) was primarily due to acquisition-
related costs, share-based payment costs relating to the First
Mortgage, Fluent and Auxilium options and the write-off of
the Boomin investment being disallowable for tax purposes,
there being limited share option exercises during the year and
a lower tax credit on research and development expenditure
on the continued development of MAB’s proprietary software
platform, MIDAS. The effective tax rate on adjusted profit before
tax* increased slightly to 16.8% (2021:16.2%). We expect the
effective tax rate on adjusted PBT in future years to be in line
with the prevailing UK corporation tax rate.

* In addition to statutory reporting, MAB reports alternative performance measures (“APMs”) which are not defined or specified under the requirements of

International Financial Reporting Standards (“IFRS”). The Group uses these APMs to improve the comparability of information between reporting periods, by
adjusting for certain items which impact upon IFRS measures, to aid the user in understanding the activity taking place across the Group’s businesses. APMs
are used by the Directors and management for performance analysis, planning, reporting and incentive purposes. A summary of APMs used and their closest
equivalent statutory measures is given in the Glossary of Alternative Performance Measures.

■ Earnings per share and dividend

Adjusted earnings per share* increased by 2% to 37.8p
(2021: 37.1p). Basic earnings per share fell to 21.8p (2021:
35.2p) due to acquisition-related costs, amortisation of
acquired intangibles and non-cash operating expenses
associated with the put and call option agreements on
recent acquisitions.

The Board is pleased to propose a final dividend of 14.7p
per share (2021: 14.7p). This brings the total proposed
dividend for the year to 28.1p per share (2021: 28.1p),
reflecting the Group’s policy to pay dividends reflecting
a minimum pay-out ratio of 75% of the Group’s annual
adjusted post-tax and minority interest profits. This
represents a cash outlay of £8.4m (2021: £7.8m). Following
payment of the dividend, the Group will continue to
maintain significant surplus regulatory reserves.

The record date for the final dividend will be 28 April 2023
and the payment date 31 May 2023. The ex-dividend date
will be 27 April 2023.

■ Cash flow and cash conversion

The Group’s operations produce positive cash flow, which is
reflected in the net cash generated from operating activities
of £24.1m (2021: £26.9m).

Headline cash
conversion* was:

Adjusted cash
conversion* was:

123%

110%

113%

105%

■ Balance sheet

2021

2022

2021

2022

In connection with the acquisitions of Fluent, Vita and
Auxilium, the Group recognised separately identifiable
intangible assets with a fair value of £55.4m and goodwill
totalling £38.7m. In addition, redemption liabilities of £7.0m
and £0.2m in respect of the put and call options relating to the
Fluent and Auxilium acquisitions respectively, are included in
other payables as at 31 December 2022.

In connection with the acquisition of Fluent, the Group entered
into an agreement on 28 March 2022 with NatWest, in respect
of a new term loan for £20m and a revolving credit facility for
£15m (the “Facilities Agreement”), in order to part fund the
cash consideration payable in relation to the acquisition. As
at 31 December 2022, the Group had drawn down £3.2m
on the revolving credit facility, in addition to the £20m term
loan, and had £0.2m of accrued interest net of prepaid loan
arrangement fees. Net debt (adjusting only for unrestricted
cash balances of £7.2m) was £16.2m.

Other than the £2.8m refurbishment of the Group’s head
office in Derby during the year, the Group’s operations are
typically capital-light, with the most significant ongoing capital
investment being in computer equipment. Only £0.4m of
general capital expenditure on office and computer equipment
was required during the year (2021: £0.2m). Group policy is
not to provide company cars and no other significant capital
expenditure is foreseen.

The Group’s regulatory capital requirement represents 2.5%
of regulated revenue and totalled £5.5m at 31 December 2022
(2021: £4.3m), with the Group reporting a surplus of £26.8m
(2021: £18.9m).

* In addition to statutory reporting, MAB reports alternative performance measures (“APMs”) which are not defined or specified under the requirements of

Strategic report | Financial performance and future developments (continued)

The following table demonstrates how cash generated from operations was applied:

Unrestricted bank balances at the beginning of the year

Cash generated from operating activities excluding movements in restricted balances and dividends
received from associates

Dividends received from associates

Dividends paid

Dividends paid to minority interest

Tax paid

Proceeds from sale of non-listed equity investment

Investment in associates (payment of deferred consideration)

Issue of shares (net of expenses)

Proceeds from borrowings

Repayment of borrowings

Net interest paid and principal element of lease payments

Acquisition of subsidiaries, net of cash acquired

Settlement of loan notes and accrued interest on acquisition

Capital expenditure

Unrestricted bank balances at the end of the year

£m

17.5

26.2

0.9

(16.0)

(0.4)

(4.1)

0.1

(1.3)

38.4

22.9

(1.5)

(0.5)

(49.2)

(21.9)

(3.9)

7.2

Strategic report | Principal risks and uncertainties

The Board is ultimately responsible for risk management and regularly considers the most significant and emerging threats
to the Group’s strategy, as well as establishing and maintaining the Group’s systems of internal control and risk management
and reviewing the effectiveness of those systems. The Board and senior management are actively involved in a regular risk
assessment process as part of our risk management framework, supported by TriLine Governance, Risk and Compliance
software (TGRC) to enable consistency and ownership by risk owners across MAB. The Group’s risk assessment process
considers the impact and likelihood of risk events that could materialise and affect the delivery of the Group’s strategic goals.
Risk owners regularly review and update where needed the controls in place to mitigate the impact of the risks, with the output
of these reviews being reported to the Risk & Compliance Committee (RCC) and secondly the Group Risk Committee (GRC) to
ensure appropriate oversight is provided and that actions are in place to mitigate any areas of concern. Throughout the Group,
all employees have a responsibility for managing risk and adhering to our control framework.

There are a number of potential risks that could hinder the implementation of the Group’s strategy and have a material impact
on its long-term performance. These arise from internal or external events, acts or omissions that could pose a threat to the
Group. The principal risks identified as having a potential material impact on the Group are detailed below, together with the
principal means of mitigation. These risks have been assigned a rating based on: (a) likelihood of the risk materialising to a point
where it will impact MAB’s strategic objectives; and (b) perceived impact to MAB that the crystalised risk may cause. The risk
factors mentioned do not purport to be exhaustive as there may be additional risks that materialise over time that the Group
has not yet identified or deemed to have a potentially material adverse effect on the business.

Risk Title

Risk Description

Mitigating Factors / Commentary

Likeli-
hood

Impact Change in

Risk

Low

High

No change

Geo-political
issues, including
the ongoing
Russian military
action in the
Ukraine and
escalating
tensions
between the
USA and China

Strategic & Market Risks

The outcome of the conflict in Ukraine
and its likely duration remain uncertain.
In the event of escalation, including
NATO military activity, it is unclear how
significantly this would impact the UK,
but as a minimum it would be expected to
further reduce household expenditure and
consumer confidence.

The UK funding markets however are still
notably liquid, with Lenders having access
to significant resources. The wider capital
markets remain open and active too.

The Bank Base Rate has increased
during the period of the conflict as a
consequence of inflation rises.

MAB has no presence in the Ukraine,
so the conflict does not present a direct
risk to the continuity of services. However,
it has outsourced some small technology
related activities within Poland, but
continues to monitor the situation with a
view to implementing mitigation measures
in the event that this neighbouring country
is more directly affected by the conflict.

The continuing conflict
arising from the Russian
invasion of Ukraine
gives rise to a number of
ongoing significant global
issues.

Its protracted nature and
the sanctions applied
to Russia have had
a knock-on negative
domestic impact in the
UK, in particular due to
increasing energy prices
and political uncertainty.

Consumer confidence
levels, and consequently
the housing and
mortgages markets, have
been disrupted and this is
likely to continue until the
conflict de-escalates.

It is anticipated that similar
challenges may arise if
tensions between the USA
and China cause global
economic distress and
uncertainty.

Strategic report | Principal risks and uncertainties (continued)

Risk Title

Risk Description

Mitigating Factors / Commentary

Likeli-
hood

Impact Change in

Risk

The deteriorating relationship between the
USA and China also serves to highlight
the nature of the multi-polar world and
the detrimental impact of a global conflict
should issues between these nations
escalate.

The potential for a form of hybrid warfare
grows where nations such as China and
Russia conduct cyber-attacks against UK
infrastructure to harm our economy and
public confidence in a “plausibly deniable”
manner. This contributes to the cyber
risks that MAB faces as referred to further
below.

The risk to MAB caused by COVID-19 has
decreased.

Low

Decreased

Low

High

No change

During the ‘lockdown’ periods the business
successfully implemented comprehensive
remote working practices.

There are significant relevant controls in
place to ensure continuity. However, due to
the potential risk of future new variants and
the uncertainties the virus may cause, this
continues to be a risk for 2023.

MAB regularly stress tests its forecast
and considers it against housing market
changes and movements in Bank Base
Rate. It is also notable that MAB has a
highly cash generative business model
and consequently holds substantial
amounts of cash on deposit with banks.

The Autumn of 2022 highlighted the
impact of macroeconomic dynamics
resulting from uncertainty and repeated
changes of role holders in senior
government positions and policies.
This culminated in disruption to money
markets, with Swap Rates increasing
significantly for a limited period. Coupled
with rising costs of living and inflation,
these events necessitated sequential rises
in the Bank Base Rates to levels not seen
for several years.

COVID-19
Pandemic

The COVID-19 Pandemic
has in many respects
abated following the
rollout of the vaccination
scheme and people
returning to their normal
‘pre-lockdown’ lifestyles.
However, there remain
concerns that variants of
the virus could mutate and
materialise causing further
significant health issues
and disruption to large
numbers of the population
across the UK.

Macroeconomic MAB is dependent on

the macroeconomic
conditions surrounding
the UK housing market,
which impacts on property
transaction levels.
The risk of regular and
meaningful increases in
interest rates is likely to
have a detrimental impact
on the housing market
and customers’ financial
situations.

Risk Title

Risk Description

Mitigating Factors / Commentary

Likeli-
hood

Impact Change in

Risk

Availability
of Mortgage
Lending

MAB’s offering would be
at risk in the event of a
significant reduction in the
availability of mortgage
lending.

Unlike during the period of economic
of instability in 2008, Lenders have
much greater levels of liquidity to enable
borrowing, albeit at rates that borrowers
may not have been used to in recent years.
It is anticipated that the costs of borrowing
will reduce as market competition
intensifies, with lenders aiming to maintain
their market shares in 2023.

In the short term, the mortgage market
has seen delays in transactions, and in
many instances, borrowers seeking to
remortgage before rates increased further.

MAB is well positioned to help
its customers and maximise new
opportunities in this sort of changed
environment.

Due to the macroeconomic volatility
in the Autumn of 2022, many Lenders
struggled to price effectively resulting in
some introducing products only to have to
withdraw them rapidly. This resulted in the
number of mortgage products decreasing
suddenly from c16,000 in late summer to
c6,000 in early October. Confidence, having
been largely restored, has seen mortgage
product numbers return to c14,000.

Recently there have been concerns around
banking stability as a result of the failures
at Silicon Valley Bank, Signature Bank, and
the Credit Suisse bailout. However, the
Bank of England has stated that UK banks
are very well capitalised and funded.

For 2023, market expectations are that
c1.8m existing mortgage borrowers will
be coming off existing fixed rate mortgage
deals.

When taking on new mortgage borrowers,
lenders must assess affordability. The rate
increases that borrowers are faced with
would result in many of them being unable
to meet these tests. The result is that many
borrowers will therefore rely on Product
Transfers instead, which present a different
commercial outcome for MAB.

MAB expects mortgage availability to
continue to further stabilise and as a result,
ARs and Advisers will be able to provide
a highly competitive range and choice of
product for customers, enabling them to
re-finance and move home more freely.

Low

Medium Decreased

Likeli-
hood

Impact Change in

Risk

Low

New Risk

Low

High

No change

Strategic report | Principal risks and uncertainties (continued)

Risk Title

Risk Description

Mitigating Factors / Commentary

Climate Change
impact and
attitudes of
consumers,
investors,
and other
stakeholders

The impact of climate
change is rightly at the
forefront of the minds
of many in terms of the
role businesses have in
meeting the challenges set
by global leaders to drive
change and transition to
lower carbon economies.
Businesses that do not
recognise these issues
and act accordingly will be
materially prejudiced.

Regulatory
compliance

Failure to comply with
current regulatory
requirements, or
appropriately anticipate,
react to, and embed new
legislation, regulation and
applicable standards,
could result in reputational
and financial damage, as
well as sanctioning by the
relevant regulators such
as the FCA (withdrawal of
authorisations) and the ICO
(imposition of censure and/
or financial penalties).

Whilst MAB’s day to day operations
are non-carbon intensive (as otherwise
reported), it has assessed the direct
physical impact of its business and
continues to monitor the risks that result.

From a more strategic perspective, MAB
recognises that it has an important part to
play in attending to the issues of climate
change through its role as a leading
intermediary in the financial services
sector. It has significantly invested in
its ESG strategy and in developing a
‘Green Mortgage’ offering via its preferred
lenders, who similarly recognise the shift in
consumer and investor perspectives and
the corresponding financial outcomes.

MAB is actively sharing its thoughts and
action plans across its AR population. It
is also promoting the need for businesses
to focus on these issues at an industry
level more generally through the various
external forums it participates in.

Legal & Regulatory Risks

MAB maintains open and effective
relationships with regulators and relevant
industry associations, in addition to having
a governance structure and controls in
place across the business. This ensures
MAB complies with current regulatory and
legislative requirements and continually
monitors emerging changes, including
the evolving standards in attending to
the issues of climate change and broader
Environmental, Social and Governance
(‘ESG’) compliance.

MAB operates an enhanced risk-based
approach to supervision and governance.
It has successfully initiated a programme
of investment in the development of its
‘Risk Profiler System’, together with the
deployment and integration of external
systems, to further enable Advisers to
deliver the best advice.

MAB’s policies and procedures ensure
that lawful bases for the processing of
personal data are documented. It also has
mechanisms in place to protect such data
from potential misuse as part of MAB’s
Cyber Security Strategy.

Likeli-
hood

Impact Change in

Risk

Medium Medium No change

Low

High

No change

Medium High

No change

Risk Title

Risk Description

Mitigating Factors / Commentary

Appointed
Representative
(AR) model

MAB has full regulatory
responsibility for the
actions of its ARs and
Advisers.

Litigation and
complaints

MAB could be subject to
litigation or complaints not
covered by insurance.

Fraud

MAB is potentially exposed
to fraudulent activity from
any of its Customers, AR
firms or Advisers.

As Principal, MAB appropriately assumes
overall regulatory responsibility for its
ARs. This is reflected in the policies and
procedures comprised in its governance
and supervision framework.

The Appointed Representative Regime
compels that the relationship between
‘Principals’ and ‘ARs’ shall continue
be the subject of detailed enquiry. As
a consequence, MAB has enhanced
its control environment and oversight
approach to reflect the regulatory
expectations. MAB also continues to
proactively engage with the regulator
and industry associations to discuss the
dynamics of operational practices to
ensure best practice continues.

MAB has strict advice guidance and
compliance processes in place for
Advisers. These require exacting standards
of advice and record-keeping at all times.

Accordingly, upheld complaint levels
remain very low compared to transactional
volumes. Further, MAB has not been
subject to any actual or threatened material
litigation.

Appropriate Professional Indemnity
Insurance is procured and reviewed
regularly.

MAB has robust controls in place to
monitor and identify potentially fraudulent
activity, with the resource available to
conduct detailed investigations should
the need arise. It continues to assess the
effectiveness of these controls and identify
opportunities to improve, with oversight by
the Risk & Compliance Committee.

MAB has implemented an enhanced
Electronic Identity Verification solution
to mitigate the risks during Advisers’
interactions with customers.

Further, regular guidance/support is given
to ARs and Advisers to ensure awareness
of risks and trends, with interactive training
on best practice.

Strategic report | Principal risks and uncertainties (continued)

Risk Title

Risk Description

Mitigating Factors / Commentary

Likeli-
hood

Impact Change in

Risk

Infrastructure
and IT systems

MAB’s performance would
be adversely impacted if
the availability and security
of its proprietary system,
and other IT infrastructure,
was compromised.

Medium High

No change

Operational Risks

There has been significant and continued
investment into MAB’s IT infrastructure.
There are two primary line-of-business
applications.

Application 1

All of MAB’s servers are currently hosted
in a specialist data centre with appropriate
security and systems resilience. A copy
of the database is also held at another
location. MAB will shortly further
strengthen and re-factor its technology,
as part of an ongoing project that will
ensure complete Cloud-hosting through a
leading provider of Cloud-based services.

Application 2

Platform is a Cloud hosted solution
and is consequently more robust. The
architecture is highly resilient and can be
re-provisioned rapidly should there ever be
a failure.

The legacy broking system will be
upgraded and migrated to the cloud
during Q1 & Q2 2023 making it more
secure and robust, mitigating many of the
current security concerns.

Following MAB’s acquisition of Fluent,
their Fluency system will also be migrated
to the cloud.

Likeli-
hood

Impact Change in

Risk

Medium High

No Change

Risk Title

Risk Description

Mitigating Factors / Commentary

Cyber and
Information
Security

The negative impact
of MAB suffering a
deliberate cyber-attack
on its systems could be
significant.

The landscape of cyber threats MAB
faces remains diverse: from nefarious
state-sponsored cyber-attacks on UK
businesses and infrastructure, and
major global events (such as the Ukraine
conflict), to smaller groups or individual
parties attempting to disrupt services and
gain financially.

Through the investment in dedicated
resource in cyber security, MAB is well
placed to prevent ingress, damage
or theft by unauthorised third parties.
In the unlikely event of a system being
compromised, it has the ability to gain
early warning and mitigate the effects of
such incidents on a constant 24/7 basis.

MAB’s ‘Information Security Strategic
Vision’ has been complimented by
a 3-year ‘Cyber Security Strategy’,
establishing a formal framework for cyber
security and defining a timetable for
ongoing improvements to address known
threats, as well as adopting a flexible
approach to counter any new ones,
through a combination of prevention,
detection and responsive defensive
measures.

The Cyber Security Strategy will also
facilitate MAB in attaining industry-
recognised accreditation, demonstrating
that all reasonable measures are being
taken to prevent cyber incidents, and to
protect data.

Likeli-
hood

Impact Change in

Risk

Low

Medium Decreased

Medium Low

No Change

Strategic report | Principal risks and uncertainties (continued)

Risk Title

Risk Description

Mitigating Factors / Commentary

Fundamentally, via its ARs and Advisers,
MAB provides a comprehensive and
thorough advice journey to its customers.
The greatest level of trust and confidence
during this stems from the in-person
interactions between Adviser and
customer. For this reason, alternative new
business models that were supposed to
have made mortgage advice to customers
more streamlined through the use of new
technology, have yet to gain any traction
in the UK.

MAB is focussed on ensuring that the
preliminary interactions, advice journeys,
and continued relationships with
customers are supported through the
use of various new technology solutions
that are being implemented (such as The
Home Buying App and MyMAB App), with
the associated efficiencies and ease of
use that these allow. At the same time,
MAB appreciates that demographic
groups have subtly different appetites,
expectations and skillsets when choosing
whether or not to utilise such tools.

MAB continues to monitor such issues
closely and is well positioned to innovate
or partner with other parties as further
technological developments occur.

MAB maintains strong relationships with
its ARs to ensure it provides appropriate
support for continued growth, whilst being
aware of key risks posed within its AR
Model.

MAB conducts regular monitoring of the
ARs, including heightened and close
financial scrutiny of those it is directly
invested in.

To the extent that certain regions, such
as Scotland, have historically had a larger
concentration of Advisers than other parts
of the UK, the impact of this has been
diluted following the addition of advisers
via the Fluent acquisition.

Technological
advancements

MAB’s offering may be
compromised if it does
not keep abreast of
consumer expectations
in relation to the use of
technology, implement
solutions accordingly, and
otherwise drive change as
it considers appropriate
given its role in the market.

AR Size and
Concentration

MAB’s ARs are spread
throughout the UK, a
small number of whom
have significant numbers
of Advisers (over 100 per
firm). There are possible
risks should such larger
ARs fail or where there is a
heightened concentration
of ARs in certain locations.

Likeli-
hood

Impact Change in

Risk

Medium Low

Decreased

Risk Title

Risk Description

Mitigating Factors / Commentary

Key Employees

The negative impact
of MAB losing Key
Employees and/or
otherwise experiencing
a substantial number of
departures of employees
would be significant.

MAB has significantly invested in the
People & Culture team and its strategy
through 2022. The ‘MABology’ philosophy
continues to be embedded, with focus on
increasing employee engagement, as well
as promoting MAB’s Diversity & Inclusion
related policies and enhancing the
implementation of its ESG standards.

Remuneration continues to be reviewed
annually. MAB implemented a cost-of-living
countermeasure in July 2022 by awarding
an additional increase to salaries and
one-off bonus.

Approximately 40% of the employee base
participate in the share-based incentive
plans.

MAB has a successful history of retaining
senior employees. The recruitment of
further leaders in specialist roles during
the last 12-18 months has enhanced the
breadth of management experience and
span of control.

Succession planning is assessed annually
by MAB’s Nominations Committee.
MAB also has succession plans in place
for Board members and the Executive
Management Team, with the aim of
improving the roster of internal candidates
for key roles.

Supply Chain
dependencies

Disruption to MAB’s supply
chain would likely cause
operational, financial and
reputational harm.

MAB is increasingly reliant on specialist
suppliers to provide certain services. The
rise in cloud-based systems and system
integrations is notable, bringing associated
risks should the relevant suppliers fail.

Medium High

No Change

MAB’s procurement practices have
matured during the last 12 months,
with the implementation of the TriLine
Governance, Risk and Compliance
system in parallel with adoption of a
business wide Procurement Policy and
Process review. The output is a refined
due diligence process and improved
functionality to MAB’s contract repository
and supplier records.

MAB continues to enhance its resilience
and recovery position. As well as strengthen
its procurement framework to ensure
appropriate supplier management. In doing
so, this enables MAB to be better prepared
for disruption caused by suppliers.

Strategic report | Principal risks and uncertainties (continued)

Risk Title

Risk Description

Mitigating Factors / Commentary

Likeli-
hood

Impact Change in

Risk

Investment &
Acquisitions

Poor execution of
investment and acquisition
strategy. This could apply
to:

a. New investments or

acquisitions

b. Poor trading outcomes
of existing investments
or acquisitions.

Increased operational risks
could derive from having
a broader commercial
offering as a result of such
corporate activity.

Medium Medium Increased

Financial Risks

MAB has a deliberate and focussed
strategy to deliver year on year growth
in market share and positive returns to
investors. In part, this is achieved through
new acquisitions and investments to
support its objectives.

All new investments or acquisitions
are subject to an appropriate level of
operational, financial, and legal due
diligence, engaging external specialists as
required.

Investment and acquisition risks are
managed through a set of operating
performance metrics and restrictions
which are set out in a suite of legal
documents drafted by experienced
specialists and approved by the Board.

MAB has a broad portfolio of investments.
In the last 12 months this has notably been
enhanced following the acquisition of a
majority stake in Fluent, bringing with it the
scope for stronger financial performance;
the benefits of a broader product mix and
more diverse range of customers; and the
advantages of an increased number of
personnel supporting the business.

There are innate risks associated with
managing a more diverse and larger
group of entities and ensuring strong
performance. To mitigate these, MAB
conducts regular performance reviews and
financial monitoring, with assistance and
expertise offered in the development of
growth plans.

MAB proactively uses its contacts,
technology, support infrastructure and
financial expertise to help maximise the
performance of its investments. It also
continues to embed its Risk Oversight
framework to monitor and mitigate the
operational risks outlined above in the
wider group context.

Likeli-
hood

Impact Change in

Risk

Medium Low

Decreased

Risk Title

Risk Description

Mitigating Factors / Commentary

Potential loss
of a major
partnership or
contract (lead
sources)

MAB has an increasing
number of material
commercial partnerships
with customer-lead
sources.

The loss of one of these
contracts, or a reduction in
lead volumes could impact
revenues and consequently
reduce profitability and
strategic performance.

As MAB’s group has expanded, such as
via the Fluent acquisition, the benefits
of relationships with more lead source
partners can be enjoyed. However, the risk
of overreliance on certain partners across
the businesses remains, with the impact of
the loss of a major lead source still being
significant.

MAB has an experienced relationship
management team in place, with
responsibility for key account management
and liaison defined at senior management
level and supported by members of the
MAB’s Executive Committee. Regular
reviews are undertaken with partners to
ensure continued focus on performance
against service levels and compliance with
contractual requirements.

The widening of MAB’s group should
offer a more attractive proposition to such
partners. This also gives MAB the ability
to diversify its lead sources, reducing
the scope for ‘overreliance’. Further, the
associated margin impact in relation to
a single lead source partner on one part
of MAB’s group is not anticipated as
being critical to MAB’s overall commercial
performance.

Strategic report | Principal risks and uncertainties (continued)

Risk Title

Risk Description

Mitigating Factors / Commentary

Likeli-
hood

Impact Change in

Risk

Low

Medium Decreased

Reputational risk The quality of MAB’s
offering, its continued
growth, and the credibility
of its ARs and Advisers in
meeting the obligations
to consumers are
each material factors
that directly affect its
reputation. Any failures in
this regard would present
an immediate risk.

Indirectly, were another
large mortgage
intermediary to fail to
meet its obligations to
consumers there is a risk
that this could cause wider
reputational harm to the
market, and equivalent
intermediaries (such as
MAB).

Reputational Risks

MAB prides itself on its Advisers offering
the best support and outcomes to
customers. In doing so, it continues to
develop its measures and processes, with
particular regard to AR oversight and the
principles of the Consumer Duty.

MAB is especially mindful of how it
responds to customer complaints
and interactions with the Financial
Ombudsman Service, always seeking to
ensure an objective assessment of matters
is undertaken, preserving its integrity in
doing so.

Customer feedback on external portals
such as Feefo and Trustpilot is regularly
monitored to enable MAB to have broader
visibility of the experiences customers are
having, and where appropriate customers
are encouraged to further interact with
MAB if they have satisfaction concerns.

The membership of, and significant
participation in, the Association of
Mortgage Intermediaries forum allows
MAB to voice its concerns and drive
positive change across the market in the
interests of all, in particular consumers.

Strategic report | Section 172(1) statement

The Directors of MAB consider that in conducting the business of the Company over the course of the year they have complied
with Section 172(1) of the Companies Act 2006 (the “Act”), by fulfilling their duty to promote the success of the Company and
act in the way they consider, in good faith, would be the most likely to promote the success of the Company for the benefit of
its members as a whole, having regard to the matters set out in s172(1)(a-f) of the Act.

Engaging with stakeholders

The continued success of our business is dependent on the support of all of our stakeholders. Building positive relationships
with stakeholders that share our values is essential to us and working together towards shared goals assists us in delivering
long-term sustainable success.

To fulfil their duties, the senior management team and the Directors take care to have regard to the likely consequences on all
stakeholders of the decisions and actions they take, with a long-term view in mind and with the highest standards of conduct.
Where possible, decisions are carefully discussed with the groups concerned and are therefore fully understood and supported
when taken.

Reports are regularly made to the Board by the senior management team about the strategy, performance and key decisions
taken, which provides assurance that proper consideration is given to stakeholder interests in decision-making, and the Board
uses this information to assess the impact of decisions on each stakeholder group as part of its own decision-making process.

The Group’s governance structure allows the Board and the senior management team to have due regard to the impact of
decisions on the following matters specified in Section 172(1) of the Act, as set out in the table below.

Section 172 factor

Approach taken

Consequences of any
decision in the long-term

Our core business model and strategy are designed to secure sustainable long-term growth
whilst continuing to deliver strong results in the meantime, and as such the long-term is firmly
within the sights of the Board when making all material decisions.

The business model and strategy of the Company is set out on pages 6 to 11. Any amendment to
that strategy is subject to Board approval.

At least annually, the Board considers a budget for the delivery of its strategic objectives based
on a three-year forecast model. The senior management team reports financial and non-financial
key performance indicators to the Board each month, including but not limited to the measures
set out in the Financial review section of the Strategic report on page 23, which are used to
assess the outcome of decisions made.

The Board’s commitment to keeping in mind the long-term consequences of its decisions
underlies its focus on risk, including risks to the long-term success of the business. Our low
financial leverage following our recent acquisitions ensures that the payment of dividends to
shareholders and remuneration to employees, are balanced. This was especially important in
2022 given the cost-of-living crisis and the heightened geopolitical uncertainty.

Interests of employees

Our employees are fundamental to the delivery of our strategy. We are committed to developing
our staff and maintaining the capacity to deliver sustainable growth. How the Directors have had
regard to the interests of the Group’s employees is set out on page 45, on pages 49 to 52 in the
Environmental, Social and Governance section of the Strategic Report and on page 63 in the
Governance section.

Strategic report | Section 172(1) statement (continued)

Section 172 factor

Approach taken

Fostering business
relationships with
suppliers, customers and
others

Engaging with our stakeholders is very much a part of our ethos as it strengthens our
relationships and helps us make better business decisions.

How the business has engaged with suppliers, clients and other counterparties is set out
on pages 44, 45, 63 and 64. Suppliers and other counterparties are typically our appointed
representative firms, mortgage and protection product providers, affinity partners and other
professional firms with which the senior management team often has a longstanding relationship.

Where material counterparties are new to the business, checks are conducted prior to transacting
any business to ensure that no reputational or legal issues would arise from engaging with that
counterparty. The Company pays suppliers in accordance with pre-agreed terms.

Impact of operations on
the community and the
environment

We are proud to support our local community and in 2022 we launched our Mortgage Advice
Bureau Foundation. More details on our engagement with local communities and charitable
activities in 2022 can be found on pages 53 to 56, in the Environmental, Social and Governance
section of the Strategic Report.

The Group’s impact on the environment is limited due to the nature of the Group’s business
operations, as set out in the Environmental performance and strategy and Environmental, Social
and Governance sections of the Strategic report on pages 47 and 48, and 56 to 58. However, the
Board is committed to limiting the impact of the business on the environment where possible.

Maintaining high
standards of business
conduct

The Board is committed to achieving and maintaining high standards of business conduct,
corporate governance, integrity and business ethics.

A key to maintaining our reputation for high standards is to treat our customers, partners and
employees fairly at all times, and our approach to conducting our business is focused on this
outcome.

The Group’s Risk and Compliance function acts as the second line of defence within MAB to
provide appropriate support, oversight and challenge to the activity undertaken by MAB and
its appointed representative firms to avoid customer detriment and ensure good outcomes are
achieved. Regular reporting is reviewed by the Risk and Compliance Committee (RCC) and the
Board Group Risk Committee (GRC) to scrutinise activity and provide assurance to the Board
that the Company’s strategic and growth objectives can be met within our risk and compliance
framework.

To further enhance our risk framework our outsourced internal audit arrangements operate as our
independent assurance function within the third line of defence reporting directly into the Board
Audit Committee, and challenge the design and effectiveness of our controls. More details on risk
and our internal controls can be found on pages 65 to 73

MAB is focussed on maintaining a positive relationship with our regulator. MAB is a proactive
member of the Association of Mortgage Intermediaries (AMI) and supports the trade associations’
interactions with the government, regulators and policymakers to ensure the mortgage industry
meets the needs of our customers and appointed representative firms. We have proactively
interacted with the FCA throughout the year including providing feedback on the FCA’s papers
on the Appointed Representative Regime (PS22/11) and Consumer Duty (PS22/9) either directly
or through AMI. The Group continuously monitors upcoming changes to regulation and is well
positioned through our membership with AMI and our relationship with the regulators. More
details on the Company’s approach to Consumer Duty can be found on page 22 and on pages 72
and 73.

Since its implementation, the processes relating to the Senior Managers & Certification Regime
(“SM&CR”) are well established, and are subject to continued assessment and review in
connection with all aspects of our activities.

Section 172 factor

Approach taken

Acting fairly between
members

The Board is committed to openly engaging with our shareholders. We recognise the importance
of a continuing effective dialogue, whether with major institutional investors, private or employee
shareholders. Further details on how we engage with our shareholders can be found on pages 45
and 73.

The Board oversees an investor relations programme which involves the Directors routinely
meeting with the Company’s institutional shareholders. The programme is managed by the
Company’s brokers and the Board receives prompt feedback on the outcomes of meetings.

The Board aims to be open with shareholders and available to them, subject to compliance
with relevant securities laws. The Independent Non-Executive Chair of the Company and other
Non-Executive Directors make themselves available for meetings as appropriate and all attend
the Company’s Annual General Meeting (“AGM”).

The investor relations programme is designed to promote formal engagement with investors and
is typically conducted after each half-yearly results announcement. The Group also has open
lines of communication with existing investors, who may request meetings, and with potential
new investors on an ad hoc basis throughout the year, including where prompted by Company
announcements.

Shareholder presentations are made available on the Company’s website. The Company has a
single class of shares in issue with all members of the Company having equal rights.

Methods used by the Board
The main methods used by the Directors to perform their
duties include:

• Board meetings or strategy days to review all aspects of

the Group’s business model, performance and strategy and
assess the long-term sustainable success of the Group,
as well as its impact on key stakeholders. A number of
senior management team strategy sessions also took place
during the year;

• The Board meets regularly throughout the year as well as
on an ad hoc basis, as required by time critical business
needs, such as acquisitions or other investments. The Non-
Executive Directors regularly meet with all the members of
the senior management team;

• The Board is responsible for the Company’s ESG activities
set out in the Strategic Report on pages 49 to 59. Ben
Thompson is the Group’s designated executive with
responsibility for ESG;

• The Board carries out direct shareholder engagement via
the AGM and the Executive Directors attend shareholder
meetings on a regular and an ad hoc basis;

• External assurance is received through internal and

external audits and reports from brokers and advisers; and

• Specific training for existing Directors and induction for new
Directors as set out in the Corporate governance report.

■ Principal decisions in the year

The principal non-routine decisions taken by the Board during
the year were:

• the acquisition of 75.4% of Fluent;

• the equity fundraise for £40m to part fund the acquisition of

Fluent;

• the entering into a new facility agreement with NatWest in
respect of a new term loan for £20m and a new revolving
credit facility for £15m, to part fund the acquisition of Fluent;

• Specialist advice from external consultancy firms is sought
where appropriate, for instance with regards to ESG or
executive remuneration;

• the awarding of a pay rise and a £250 one-off cash bonus
to all eligible non-bonussed head office employees in
response to the cost-of-living crisis;

• The Board’s risk management procedures set out in

• the acquisition of a further 26% of Vita Financial Ltd

the Corporate governance report identify the potential
consequences of decisions in the short, medium and
long term so that mitigation plans can be put in place to
prevent, reduce or eliminate risks to the Company and
wider stakeholders;

• The Board sets the Company’s purpose, values and

strategy, as detailed in the Strategic Report, and the senior
management team ensures they align with its culture;

(“Vita”), the specialist protection intermediary business.
This took the Group’s overall share in Vita to a controlling
75% stake;

• the acquisition of 75% of Aux Group Ltd, a specialist
protection service provider to the directly authorised
market;

• the ratification of the Consumer Duty Implementation Plan;

• the determination of dividends. The Board recommends a
final dividend of 14.7p per share for 2022 (2021: 14.7p);

Strategic report | Stakeholders

Engaging with our stakeholders is very much a part of our ethos as it strengthens our relationships and helps us to make
better business decisions to enable us to deliver on our commitments. The Board is regularly updated on wider stakeholder
engagement feedback to stay abreast of customers, suppliers and shareholders’ insights into the issues that matter most to
them and our business. The below table outlines how we consider these stakeholders and how we engage with them:

Stakeholder

Why we engage

How we engage and outcomes

Consumers

We aim to be at the forefront of providing the
best consumer outcomes.

Appointed
Representatives

Maintaining an active dialogue and supporting
our AR partners is key to our business.

• The quality of consumer outcomes is central

to our culture, which is reflected in our
compliance strategy.

• We endeavour to provide consumers the

choice of how they want to transact, whilst
giving our ARs the tools to improve their
productivity.

• We continue to enhance our vulnerable

customer strategy to ensure that appropriate
support is provided when customers need it
most.

• Customer feedback is a core component in
our strategy to ensure consumers receive
a first-class experience. We continue to
monitor the feedback on the service our
advisers provide via the online review
company Feefo.

• We use a collaborative approach in

operational matters such as setting goals
and objectives and hold regular review
meetings with each AR firm. We also work
with specialist ARs and providers to explore
new ideas and growing markets.

• The significant support we have offered via
numerous initiatives has served to strength
our relationships. In particular, this includes:

Adapting and improving the technology-
based solutions at the core of our
business, especially in relation to
increasing lead generation for our ARs;

Continuing to address important topics at
the regular Business Owner forums, where
we review ongoing issues, upcoming
market developments;

Enhancements to our Learning &
Development offering, through the design
and implementation of specific adviser
training programmes and a streamlined
academy course to support new advisers;
and

Promoting regular ‘clinics’ for advisers at
which knowhow and supervision matters
are discussed. All of which is intended
to develop adviser skill and knowledge
levels, and ultimately improve the
proposition to their clients.

Stakeholder

Why we engage

How we engage and outcomes

Suppliers

Strong and sustainable relationships with our
suppliers and providers are fundamental to our
long-term success.

Similarly, disciplined procurement practices
encourage better relationships and greater
efficiencies.

Shareholders

As owners of the Group, we rely on our
shareholders’ support and their opinions are
important to us.

Employees

Our employees are our most valuable
asset. Their immense knowledge, skills and
experience are key to our success and are vital
to ensuring we maintain the high standards of
customer service.

• We hold regular roundtable events with
our product providers and lead partners
where topics such as business process
improvements are discussed as a group.

• We have reviewed and enhanced our

procurement policies and procedures to
better document and manage relationships
within our supply chain. In particular, we
have implemented a new software solution
that is designed to capture the key details of
any supplier and track their performance.

• We have an open dialogue with our

shareholders through one-to-one meetings,
group meetings and the AGM. Discussions
with shareholders cover a wide range of
topics including financial performance,
strategy, outlook, governance, environmental,
social and ethical practices.

• Shareholder feedback along with details

of movements in our shareholder base are
regularly reported to and discussed by the
Board and their views are considered as part
of decision-making.

• We provide detailed financial reports and

presentations on the business at the half year
and full year.

• We focus on creating a working environment in
which people thrive and where our core values
are communicated effectively and upheld. We
believe that a positively engaged workforce
is one that is more productive, happier and
fulfilled, which in turns leads to improved
performance, greater customer satisfaction and
reduced employee attrition.

• The launch of our behaviours framework

MABology has been exceptionally well received.
We continue to monitor the progress of this
initiative through our Employee Engagement
forum, and conduct regular engagement
surveys to help shape our priorities.

• We hold regular forums at which colleagues
are given the opportunity to learn about key
business updates, to review and discuss
strategic objectives, and to feedback on how
we can collectively achieve our goals. These
comprise “MABFest”, our quarterly staff update,
as well as other sessions e.g. our weekly “Friday
Joy” online updates.

• We regularly share feedback and recognition
across the business via our ‘MABplause’
channel, which all employees can access
on our intranet. We also solicit more detailed
and specific feedback, at least once every
12 months, via our engagement survey.

Strategic report | Stakeholders (continued)

Stakeholder

Why we engage

How we engage and outcomes

Communities

An important component of being a good
corporate citizen is to recognise the role we
can play in supporting the communities around
us and implementing initiatives to do so.

• We engage with the communities in which
we operate to build trust and understand
the local issues that are important to them.
Key areas of focus include:

The Government and
regulators

The evolving regulatory landscape has a
direct and material impact on the day-to-day
operation of our business.

how we can support local causes and
issues, create opportunities to recruit and
develop local people; and

partnering with local charities and
organisations at an individual office level
to raise awareness and funds.

• We are proud of the positive impact of

our charity, The Mortgage Advice Bureau
Foundation (“Foundation”). The Foundation
supports charitable projects that create
awareness amongst MAB stakeholders
of the growing needs of their local
communities.

• The impact of decisions on the environment
both locally and nationally is considered,
and comprises a notable focus as part of our
wider ESG related activity.

• We engage with the Government and
regulators through a range of industry
consultations, forums, meetings and
conferences to communicate our views to
policy makers relevant to our business.

• We have dedicated specialist Legal,

Compliance and Risk experts, (with many
decades of combined experience) who are
focussed on ensuring we meet our regulatory
obligations. Most recent examples include:

enhancing the policies and process
relating to Appointed Representative
oversight, as expected of us by the FCA;
and

instigating a comprehensive review of the
material activities of the business in the
context of embedding further policies and
processes to address the requirements of
the new Consumer Duty.

Further information on the ways in which the Board engages with stakeholders is set out in the Strategic Report on pages 41 to
43 and 49 to 59, in the Directors’ report on pages 63 and 64 and in the Corporate governance report on page 73.

Strategic report | Environmental performance and strategy

The Companies (Directors’ Report) and Limited Liability
Partnerships (Energy and Carbon Report) Regulations
2018 implement the government’s policy on Streamlined
Energy and Carbon Reporting, requiring disclosure of the
environmental performance of the Group’s assets through
calculating the Group’s greenhouse gas (“GHG”) emissions
and subsequently, setting strategies to minimise these
emissions. The following information summarises the Group’s
environmental performance over the year.

We consider this to be a good indicator of the scale of the
business and our energy intensity. To derive a meaningful
energy intensity metric for Fluent and Vita, we have factored
in their emissions data for the whole year and actual average
employee numbers during the year. The alternative approach,
to count emissions and employees only from completion
of the acquisitions would have slightly artificially depressed
emissions per employee across the Group so we chose the
more conservative approach.

■ Methodology
GHG emissions are quantified and reported according
to the Greenhouse Gas Protocol. Consumption data has
been collated and converted into CO2 equivalent. To collect
consumption data, the Group has reviewed utility invoicing
and its staff expense software to track business mileage in
employee vehicles. We have used the UK Government’s 2022
GHG Conversion Factors for Company Reporting in order
to calculate emissions from corresponding activity data,
save that this year we have reflected the actual low carbon
intensity at our head office due to our 100% renewable
supply of electricity. We have restated the prior year
accordingly, as we made the switch in 2020.

We have collected data for MAB and our subsidiaries: First
Mortgage, Fluent and Vita. Auxilium only has two employees
and is considered to have minimal impact. MAB owns 80%
of First Mortgage, 75.4% of Fluent, and 75% of Vita, but we
have factored in 100% of the Scope 1, Scope 2, and Scope 3
emissions for these subsidiaries.

Fluent and Vita became Group subsidiaries in July 2022,
and we have included their Scope 1 and Scope 2 GHG
emissions (in tCO2e) from the date of completion. We have
calculated energy intensity (in tCO2e per employee per year)
using the average number of employees during the year.

As part of the data collection, a materiality assessment
was applied to determine which indicators were relevant
to the Group. We have assessed each indicator in terms
of its impact on the Group and its perceived importance to
stakeholders.

■ Reporting boundaries and limitations
The GHG sources that constitute our operational boundary
for the reporting period are:

• Scope 1: Natural gas combustion within boilers. MAB

does not provide any company cars;

• Scope 2: Purchased electricity consumption for our own

use; and

• Scope 3: Fuel consumption from employee-owned cars for

business use.

Fuel connected with employee train and plane travel for
business use has been excluded as amounts are likely
to be immaterial and we consider it impractical to make
estimations. Water usage has also been excluded as amounts
are also likely to be immaterial. Fugitive gasses from office
air conditioning are also considered immaterial. We have
estimated Scope 3 emissions based on the split of Diesel vs.
Petrol cars in the UK.

■ Performance
The table below shows absolute performance and like-for-like performance of our Scope 1, 2 and 3 emissions for the year,
restated for 2021 as explained above:

Energy consumption and associated GHG emissions (tCO2e)
Scope 1

Fuel consumption (gas office heating) (kWh)
Associated GHG (tCO2e)
Electricity consumption (office electricity) (kWh)
Associated GHG (tCO2e)
Total Scope 1 & 2 emissions

Scope 2

Scope 3

Fuel consumption (own cars for business use) (miles)

Fuel consumption (own cars for business use) (kWh)
Associated GHG (tCO2e)
Total Scope 3 emissions

Summary

Gross Scope 1, 2 and 3 emissions

Total average employees (including First Mortgage, Fluent and Vita)
Scope 1 & 2 emissions intensity (tCO2e/employee/yr)
Scope 3 emissions intensity (tCO2e/employee/yr)

2021
Restated

2022

Change

484,361

692,986

126

322,017

742,817

139

128

255

245,841

302,359

450,662

549,699

213

445

0.31

0.17

134

389

983

0.26

0.14

43%

131%

155%

83%

82%

83%

121%

-17%

-18%

Strategic report | Environmental performance and strategy (continued)

The Group’s absolute increase in fuel consumption is due to
our acquisitions in 2012, with Fluent, Vita and Auxilium having
added over 500 employees to the Group.

We are pleased that our Scope 1 and 2 emissions intensity
per employee decreased by 17%. This is mainly as a result of
the following reasons:

ventilation system as part of the major refurbishment of our
head office in Derby with a new single high-efficiency Variable
Refrigerant Flow AC system. This will further reduce our
energy emissions from 2023 onwards. We also installed higher
efficiency LED lighting and a new suite of audio-visual display
monitors throughout the building with minimum A-rated
energy efficiency.

• Further energy efficiency actions at MAB and FMD,
• a 9% year-on-year reduction in the UK electricity

conversion factor, likely caused by an increasing proportion
of UK electricity being produced from renewable sources,
and

• an efficient use of space by our Fluent subsidiary, which

added approximately 500 employees to the Group.

Our scope 3 emissions per employee decreased by 18%
year-on-year, which is due to the relatively low mileage per
employee at Fluent compared to MAB.

Sustainability is embedded into our core values and we
have taken a number of steps to reduce our impact on the
environment. These included upgrading our heating and

Minimising our carbon footprint was a major consideration
during the design phase of the refurbishment. Our supplier
selection was deliberately weighted towards engaging
businesses local to Derby, and the re-use or recycling of our
old equipment was a key priority. We commissioned two EPC
reports, before and after, and are proud to report that our
energy performance rating has improved from 84 (D rating) to
39 (B rating). More details on our energy efficiency actions can
be found in the Environmental, Social and Governance section
of the Strategic report on pages 56 to 58.

We continue to investigate new strategies to make our
business more sustainable and through collaboration with all
our stakeholders we expect to make further positive steps in
this regard in 2023.

Strategic report | Environmental, Social and Governance

The Board recognises the need to ensure that we are a
responsible business that grows sustainably and makes a
positive contribution to all its stakeholders – our customers,
shareholders, employees, suppliers, and the local
communities in which we operate.

This year, we have included a standalone ESG section in
the Directors’ Strategic report. This reflects the excellent
progress we have made in this area building on existing
initiatives and taking steps towards the implementation of an
integrated ESG strategy linking all areas of the business. ESG
is an integral part of what we do it is embedded within our
broader Group strategy.

At MAB we firmly believe that strengthening our positive
impact on society will also help us become a better company,
with a more engaged workforce and sustainable competitive
advantage . In 2022, we accelerated our investment in
this area, continuing to build our in-house ESG team and
creating a dedicated project resource to support the roll-out
of existing and new projects . We also appointed a specialist
ESG consultancy firm in July 2022 after having run a
selection process . The first phase of their work focussed on
conducting a comprehensive review of MAB’s existing ESG
practices, followed by an in-depth screening of internally
available data and a materiality assessment .

As a result of the ESG strategy work we carried out, we
now have a roadmap under which we will make further
improvements to our strategy . ESG is a key priority for MAB
for 2023 and as such the company has made a further
resource commitment to support the ongoing development of
this area .

In this section we detail the work carried out in 2022 with a
focus on the following key pillars:

1 . Employee wellbeing, diversity, equality and inclusivity;

2 . Community engagement and charitable activities; and

3 . Minimising our impact on the environment .

The Board is committed to achieving high standards of
corporate governance, integrity and business ethics . The
Board adopted the Quoted Companies Alliance (“QCA”)
corporate governance code, which requires the Group to
apply 10 principles focused on the pursuit of medium to
long-term value for shareholders and also to publish certain
related disclosures .

As a Board we believe that good governance is crucial to
the delivery of our strategic objectives . We aim always to
remain abreast of best practice and of developments in the
regulatory framework within which we operate, and in the
way in which we seek to serve the needs of our customers .

Our compliance processes and robust controls result in
MAB being well regarded by lenders for both volume of
transactions and customer outcomes . We continue to
measure highly for customer satisfaction through the online
review platform Feefo, with a score of 4 .9 out of 5 from over
20,000 reviews . In 2022, the number of customer complaints
received was 0 .2% of written mortgage volumes (2021:
0 .1%, 2020: 0 .2%) . MAB remains below the threshold for

referred complaints to the Financial Ombudsman Service and
therefore does not appear on its public database .

More details on our Corporate Governance framework are set
on pages 65 to 73 .

Employee wellbeing, diversity, equality and inclusivity

Our employees are our most valuable asset . Their immense
knowledge, skills and experience are key to our success
in delivering our business plan and are vital to ensuring
we maintain the high standards of customer service and
satisfaction which underpin the provision of quality advice .

We focus on creating a working environment in which our
diverse team can thrive and where our core values are
communicated effectively and upheld . We believe that a
positively engaged workforce is one that is more productive,
happier and fulfilled, which in turns leads to improved
performance, greater customer satisfaction and reduced
employee attrition .

■ Employee wellbeing (Financial, Emotional and Physical)

We have continued to invest in the wellbeing of our
employees in 2022 . We ran a wellbeing calendar covering the
financial, emotional and physical aspects of wellbeing . We
offered support to our employees across a variety of topics
and hosted webinars with specialist guest speakers and yoga
and breathwork instructors . We supported different charities
such as the British Heart Foundation and Roy Castle Lung
Foundation to raise awareness of these important areas of
our physical health . We also offered training for people going
through the menopause or wanting to find out more about it
to support colleagues, friends or family members .

One of our aims for 2022 was to increase Mental Health
Awareness across MAB . We organised Mental Health First
Aid Training sessions and established a group to promote
and ensure engagement as well as to provide support to one
another . We also supported the mental health charity Mind’s
Time to Talk Day, recognising how difficult it can be to open
up about mental health .

We have expanded our benefits to include providing all head
office employees with a day off to celebrate their birthday
and the ability to buy or sell holidays up to 5 days, which has
been very well received by our colleagues .

Recognising the importance of achieving a good work/life
balance, we have continued to offer a hybrid working facility
to our employees . In 2022 we also set up a volunteering
programme with Derby City Mission and a Christmas Toy
Appeal with the Salvation Army . Through our Volunteering
Days initiative, employees are given additional time off work
in order to volunteer in their chosen charity .

Strategic report | Environmental, Social and Governance (continued)

BE
AWESOME

We take pride in who we are
and feel safe to show it.

BREAK THE
MOULD

We think
dif ferently
and shake
things up.

SHARE
THE LOVE

We look out for
one another
and unite
as a team.

SEE THINGS
THROUGH

We do what we say we will.

USE YOUR
VOICE

We talk openly
and listen,
so we’re all in
the know.

DELIVER
WOW

We use our expertise
to achieve brilliance.

■ Diversity, Equality and Inclusivity (“DE&I”)

In 2021 we launched our “MABology” DNA behaviours – the
behaviours we aim to live and breathe to enable us to achieve
our vision. This has been a real success in harnessing MAB’s
culture and enabling it to grow and develop further. All our
MABology behaviours, in particular Use Your Voice, Be
Awesome and Share the Love; have been shaped to create
a diverse and inclusive work environment, to encourage
employees to take pride in themselves, be open, and feel
safe to show it.

We continued this work in 2022 and have embedded all
of the MABology behaviours framework in our employees’
personal development plans so that diversity and inclusion
is a direct and tangible measure of success for all. We have
also overhauled our recruitment and induction processes to
ensure we are recognised as an open and inclusive employer
of choice, and this will support our long-term strategy as a
diverse and inclusive business.

The Group is committed to the principle of equal opportunity
in employment, regardless of a person’s race, creed, colour,
nationality, gender, age, marital status, sexual orientation,
religion or disability. Employment policies are fair, equitable
and consistent with the skills and abilities of the employees
and the needs of the business. All of our job advertisements
have been updated to reflect this approach to DE&I, as well
as incorporating the MABology language. We have also
improved the way we advertise our vacancies to ensure they
are broadly publicised to our employees first, and are pleased
that the proportion of internal applications and resulting
internal moves and/or promotions continues to be high, with
nearly 40% of new roles at head office having been filled
through internal moves or promotions last year .

A number of training initiatives launched over the last twelve
months saw a high representation of women participants,
and we aim to increase this further in 2023 and beyond . Our
Learn to Lead training programme, aimed at MAB’s aspiring
future managers, saw a 70% attendance by women .

We also encourage and empower women within our
Appointed Representative firms, and we are proud to work
alongside multiple female business leaders who have been
decorated with numerous industry awards over the years .

From an inclusivity perspective, we are fostering employee
connections through a range of social events such as Coffee
Roulette or other events covered in the Wellbeing section .
As MAB continues to grow, it becomes ever more important
to create an environment where employees who may not
necessarily interact are encouraged to meet and interact with
one another . This contributes to creating a great workplace,
and enhances trust, collaboration and the take-up of the
MABology values across the business . Throughout 2022 we
have continued to undertake regular employee engagement
surveys, with average participation having increased
to 76% .

Diversity, equality and inclusion was heavily incorporated
as part of the state-of-the-art refurbishment at head office
completed in 2022 . We understand that all our employees
have diverse needs in terms of their wellbeing and how they
work, which is why we have provided them with an office
environment that caters for hybrid working and delivers a
range of work settings . Options include numerous formats
of focus pods, quiet areas and collaborative spaces, with a
variety of fixed desking and agile seating available, thereby

offering our colleagues flexibility in how they work and
enabling them to thrive and perform at their very best.
The new space also promotes employee wellbeing
through an extensive use of planting, and a dedicated
wellness space is available to employees for a variety of
purposes, including prayer, nursing infants or meditation.

We are members of the Diversity and Inclusivity Finance
Forum and are an open and diverse employer. Our
approach to DE&I and culture was recognised with the
following awards in 2022:

Best Medium Organisation, . . . . . . . . . . . . . . . . . . . . . . . . . . . Winner
Business Culture Awards

Overall Winner, . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Winner
Business Culture Awards

Best Business Transformation Initiative, . . . . . . . . . . . . Winner
Business Culture Awards

Women’s Recognition Awards – . . . . . . . . . . . . . . . . . . . . . Winner
Equality Employer of the Year

Women’s Recognition Awards – . . . . . . . . . . . . . . . . . . . . . Winner
Elite Women

Our winning team at the 2022
People and Culture awards

Strategic report | Environmental, Social and Governance (continued)

■ Learning and Development

The Group is committed to developing its employees to
enhance our capacity to deliver sustainable growth and
maximise workforce engagement and employee retention.

Our Deliver Wow Academy offers a leadership programme
dedicated to both our head office managers and our AR
business leaders . In total, over 100 people undertook the
training in 2022, 42 from head office and 60 from our AR
partners . The Deliver Wow Academy contains 9 modules
including Emotional Intelligence, Effective Communication,
Succession Planning and How to be Bolder .

The feedback from the course has been great from all, with
participants using the new skills learned to interact with their
teams in different ways, and adapting their leadership style to
the various personalities they manage .

“

In 2022 we also increased the support provided to our AR
partners . We improved both our adviser induction process and
Academy programmes to ensure all advisers start their careers
off on a high with MAB, and created new content to continue
to support the provision of high-quality advice .

Our new bespoke training sessions have been tailored to our
advisers’ individual development needs, and are proving very
popular .

In 2022 we also further developed the MAB Hub platform,
set up in 2020, which provides learning and development
opportunities to more effectively support the personal growth
competence of our employees and advisers, and enhances
the governance framework for the SM&CR regime . In 2022,
approximately 80,000 hours of training were completed on the
MAB Hub platform by our employees and advisers .

Our investment in people continued throughout 2022 with the
launch of our informal Mentoring programme . There are many
benefits to mentoring and this has been well received by our
colleagues . Our mentors provide ad hoc counsel as well as
regular ongoing support to the mentees .

■ Diversity metrics

Siobhan Barrett
Regional Marketing Manager

Claire approached me for mentoring to help me identify the
best approach for my career going forward, to realign me with
my goals and hold me accountable for achieving the best
output from myself .

“The mentoring sessions definitely helped me realise my
potential, build confidence in my learning and development
as a new manager, and step outside my comfort zone in my
personal and office life, by taking on challenges which enabled
me to build character and test my resilience . My mentor
gave me the best possible advice with regards to building
my presence in the workplace, tips on how to lead a team by
identifying my own leadership style and showcasing what I
have achieved to the right people .

I have since then earned a promotion to regional
marketing manager” .

Employee diversity

Gender split of Management

Employee age

Men

Women

50%

Men

Women

58%

42%

Under 30

30-50

Over 50

“

34%

52%

14%

Community engagement and charitable activities
Corporate Social Responsibility is very important to the Group, and we strive to maximise our positive impact on the
communities in which we operate.

MAB has always contributed to charity through donations, sponsorship and supporting activities of their employees, however
the recipients of these donations tended to be large charitable organisations. In 2020, employee feedback indicated a growing
willingness to support a more diverse selection of charities whose work at the local level is invaluable, and this need for local
action was brought into even sharper focus after the covid crisis.

In December 2021, MAB applied to establish a Charity Incorporated Organisation (CIO), Mortgage Advice Bureau Foundation
(the “Foundation”). The charity was authorised by the Charity Commission in March 2022. Former MAB New Homes Director,
Andy Frankish, conceived the project from scratch and is now Mortgage Advice Bureau Foundation’s CEO. The trustees are:

Name

Mortgage Advice
Bureau Foundation role

Other role

Andy Frankish

Trustee and CEO

Lucy Tilley

Ali Crossley

Esther Dijkstra

Ben Thompson

Peter Brodnicki

Fabien Holler

■ Social Purpose

Trustee and Chair

Chief Financial Officer at Mortgage Advice Bureau

Trustee

Managing Director, Distribution at Legal and General

Managing Director, Intermediaries at Lloyds Banking Group

Deputy Chief Executive Officer at Mortgage Advice Bureau

Chief Executive Officer at Mortgage Advice Bureau

Company Secretary at Mortgage Advice Bureau

Mortgage Advice Bureau enables people to buy their own homes, re-finance and helps them fulfil their aspirations by making
key financial moments in life a simple, happy and reassuring experience . Homes make communities and the key aim of the
Foundation is to support communities at grass roots level to improve the standards of living and therefore the enjoyment in the
places where people choose to live .

The Foundation is a grant-giving charity and issues grants to other charities and Community Interest Companies (CIC) across
the UK . These charities and CICs are put forward by our employees, our customers and our business partners including
appointed representatives, lenders and protection providers . Grants are issued to part-fund project costs with well-defined
purposes that meet our assessment criteria . In 2022, grants were capped at the lower of £5,000 and 50% of the total project
costs . We aim to leverage MAB’s network, maximise stakeholder involvement and create awareness among MAB employees
and customers of the growing needs of their local communities .

Through our grant-giving policy we support charities active in the following three areas:

1) Health and wellbeing – projects to help communities address health and wellbeing issues so that everybody’s quality of life
can be improved;

2) Preventing and relieving poverty – projects to support communities through financial hardship and social exclusion; and

3) Environment and conservation – practical and educational projects to help communities make green choices and reduce
their carbon footprints .

Sustainability is a key factor for all of our projects, but the focus is far broader than just the environment, it is about ensuring a
strong, healthy and just society by promoting personal wellbeing, healthy recreation and social cohesion, pulling communities
together whilst ensuring inclusion, and creating equal opportunities for all .

We have partnered with the leading crowdfunding platform, Crowdfunder, to host our supported projects so they have the best
chance of achieving their fundraising goals, and provide compliance support those charities .

Strategic report | Environmental, Social and Governance (continued)

■ Governance
The Foundation is a registered Charitable Incorporated Organisation regulated by the Charity Commission for England and
Wales. The Foundation’s charity number is 1198352.

The trustees share responsibility for governing the charity, direct how it is managed and run, and safeguard the Foundation’s
assets.

The Foundation Committee oversees the scoring of applications received through a detailed scoring matrix to ensure selected
projects meet the Foundation’s stated purposes. Projects that exceed our threshold can be chosen by the Committee to be
referred to the Trustees for final approval .

The members of the Committee are listed below . They continue to donate their time generously and impart their experience and
thoughtful advice in driving the Foundation forward, and we thank them for their selfless contribution.

Name

Stephen Alger

Lee Cardwell

Sarah Drew

Lian Findler

Kate Fuller

Jon Lord

Mortgage Advice
Bureau Foundation role

Other positions

Committee member

Business Principal, Mortgage Advice Bureau Norfolk

Committee member

Co-founder, MAB New Homes Rotherham

Committee member

Product Manager at MAB

Committee member

Sales and Development Director at Marquis FS

Committee member

Founder, Mortgage Advice Bureau Crawley

Committee member

Founder, Metro Finance

Andrew Milnes

Committee member

Founder, Mortgage Q

Claire Taddei

Committee member

Co-Founder, Mortgage Advice Bureau, Scotland Network Partner

■ Progress
We launched our grant funding model internally to our employees and network partners in September 2022 with a fund of
£25,000 pledged by MAB.

In the period to the end of December 2022 we received 35 requests for funding from a wide variety of charities. Out of these:

• 9 full applications were considered by our Committee
• Funding was pledged to 6 projects subject only to the matched-funding element
• 5 of these projects have now been fully funded, including the matched-funding element.

As at 31 December 2022, the Foundation had pledged £16,700 of funding which has helped charitable projects raise over
£30,000 in total. Our systems and processes are well established and we are now able to process and deliver funding to
multiple applications on a weekly basis, subject to funding.

■ Other charitable activities

In addition to its commitment to the Foundation,
in 2022 MAB also:

• donated £20,000 to the British Red Cross as part of its

Ukraine Crisis Appeal;

• helped raised £3,468 for charitable donations as part of the

MAB Golf Day; and

• gave a further £11,747 through donations and sponsorships
towards various causes including the Alzheimer’s Society
Charity Ball and Prostate Cancer UK.

Overall, MAB’s charitable donations in 2022 totalled
over £55,000.

In addition, Fluent made a small donation to the Education
for the Children Foundation for every completion in 2022. As
part of this scheme, since completion of the acquisition in July
2022, Fluent donated £18,020 to Education for the Children,
in support of students at The School of Hope in Guatemala.
Fluent also became a bronze patron of two different charities,
Bolton Lads and Girls Club and Bolton Hospice. Overall, in
2022 Fluent raised approximately £60,000 for their chosen
charities.

Volunteering as part of the Salvation Army’s Christmas
Toy Appeal

MAB head office team at the MAB Golf Day

■ Case Study: Beartown Rickshaw

In November 2022 the Foundation received an application from
Beartown Rickshaw. The project was sponsored by our AR
partner at the Mortgage Advice Bureau office in Macclesfield .

Beartown is a charity that provides free rickshaw leisure rides
around Macclesfield to people who are experiencing social
isolation or limited mobility, and gives them an opportunity
to get out in the fresh air safely and securely and visit local
attractions, thereby improving mental health of as many
residents as they can .

Beartown was seeking £4,330 funding to purchase essential
equipment to maintain the rickshaw and to invest in the
promotion of the service through web and social media . It
also allowed them to provide winter equipment to enable
volunteers to service a growing demand throughout the year .
The Foundation issued them with a grant for £2,165 .

Beartown Rickshaw is a fantastic project which can be easily
replicated in all towns around the UK .

Strategic report | Environmental, Social and Governance (continued)

■ Case Study: Relate

Scope 1 & 2 emissions intensity (tCO2e/employee/yr)

In December 2022 the Foundation received an application
from the Relate charity who had started a community project in
Woking called Family Minds Enriched. Their grant application
was sponsored by our AR partner in Mortgage Advice Bureau
Crawley. Family Minds Enriched helps alleviate mental health
issues for individuals within vulnerable families where NHS
counselling is unavailable because of lengthy waiting lists.
These families are unable to pay for treatment because of low
incomes, compounded by the cost-of-living crisis which is
often a contributor to their anxiety.

Relate needed to deliver proof of concept that subsidising
counselling sessions with individuals, couples, or young
people not only improved their mental health and well-being
but also improved relationships with family and friends, and
in certain cases reduced the likelihood of (re)offending. In
demonstrating this, the charity was able to secure additional
funding lines to continue the great work.

MAB Foundation supported Relate with £2,500 of funding to
deliver their successful proof of concept.

Minimising our impact on the environment

Reducing our environmental footprint is an important priority
for MAB, despite our overall footprint being limited due to the
nature of our operations as a mortgage intermediary business.

As a company, we are not only focussed on reducing our direct
carbon emissions, but also on delivering a positive impact
on all our stakeholders and society. With the housing sector
representing circa 20% of carbon emissions in the UK, we
believe we have a bigger role to play in contributing towards
the UK’s overall Net Zero targets by 2050.

■ Reducing MAB’s carbon emissions

As set out in the Environmental Performance and Strategy
report on pages 47 and 48, our Scope 1 (gas) and Scope 2
(electricity) emissions per employee have reduced by 48%
since 2020. We took action to switch electricity suppliers to be
powered by 100% renewable electricity at our head office as
well as all the FMD offices, and energy saving light and heating
was installed .

0.45

0.40

0.35

0.30

0.25

0.20

0.15

0.10

0.05

0.38

0.31

-18%

0.26

-17%

2020

2021

2022

We expect our annual energy emissions per employee
to continue to decrease due to the major refurbishment
project we carried out at our head office building in Derby
in 2022 . Minimising our environmental impact was a central
consideration for this project, as was sourcing products from
local suppliers where practical, and repurposing furniture .
Extensive workplace analysis and culture surveys were
undertaken during this period to ensure the needs of our
employees were fully aligned with the design of both working
practices and office space . A number of specific initiatives and
product or design selections were made to support these aims:

• supplier selection was deliberately weighted towards

engaging businesses local to Derby;

• installation of a new single high-efficiency Variable Refrigerant
Flow AC system to provide a more consistent and controlled
temperature throughout the building, as well as improved
clean air ventilation and a single source of hot water via an
insulated storage tank;

• installation of new high efficiency, low energy LED lighting

operating on motion sensor activation throughout the
building . Whilst LED lighting was in use in the majority of
the interior prior to the refurbishment, it was of a lower
specification ;

• a new suite of audio-visual display monitors throughout the
building giving a consistency of equipment with minimum
A-rated energy efficiency and improving the position over the
previous mixed stock of equipment .

• an upgrade to security and the alarm system with all

entrances and exits operated by employee staff cards,
thereby improving the safety of the working environment;

• installation of secure bicycle store with card activated locking

system to encourage more people to cycle to work;

• installation of an electrical vehicle (EV) charging point with

capacity for charging 2 EVs and scope to add a further two at
a future point if required; and

• extensive use of green planting throughout all areas .

We no longer use a gas supply into our head office building
in Derby, and due to our renewable electricity supply and the
above energy efficiency gains, we expect our energy intensity
to continue to decrease in 2023 .

We commissioned two EPC reports, before and after the
refurbishment, and are pleased to report that our energy
performance rating has improved from 84 (D rating) to 39
(B rating) .

We will continue to work with specialist consultants throughout
2023 to improve further our carbon reporting framework
based on science-based targets and drive the Group’s
sustainability agenda. We will also prepare to follow the set of
recommendations published by the Task Force on Climate-
related Financial Disclosures (TCFD).

■ Green Mortgages

MAB is at the forefront of Green Mortgages. In 2022, we
launched our Green Hub for consumers and continued to
improve our MIDAS technology platform to best promote
Green Mortgages to our advisers. As a result, our ARs
submitted over £1 billion in Green Mortgages to our lending
partners, a very substantial increase versus 2021. We also
organised the first industry event exclusively focussed on
Green Mortgages .

The narrative around Green Mortgages is rightly becoming
more prominent and important, with momentum and interest
gathering from advisers, consumers and lenders . New
minimum energy efficiency standards are currently planned to
be phased in the buy-to-let market by 2025, and we expect
a similar trend to start gathering momentum for homeowners
over the next decade or so . Our intention is to become a leader
in Green Mortgages . With housing representing circa 20% of
carbon emissions in the UK, we will considerably increase our
involvement in this area, thereby directly contributing to the
UK’s overall Net Zero targets, whilst significantly helping many
thousands of customers too .

MAB already serves a great social purpose, in-so-much as
it helps customers to buy and re-finance their homes, and
protects them as well . With an increasingly environmental
focus layered onto this, MAB is becoming very central and
relevant to making a difference towards the UK Government’s
climate commitments .

The Mortgage Advice Bureau Green Hub

The first industry Green Mortgage event, organised by MAB

Strategic report | Environmental, Social and Governance (continued)

Joe Micoud
Mortgage and Protection Adviser,
MAB Scotland
(Home Loan Services Ltd)

“

What ESG means to you

■ Waste reduction

To me, ESG means doing the right thing by investing in a way
which is sustainable to all stakeholders involved, including
employees, customers, lenders, builders, and investors. This is
a massive focus when it comes to mortgages, as lenders start
to focus on incentivising the energy efficiency of the properties
they lend against . Meanwhile, for builders in the new build
sector, ESG drives them to construct energy efficient homes .

On a day-to-day basis, the main types of waste we generate
are paper and food waste, and we look to recycle as much
as possible . We continue to work with a socially responsible
specialist IT recycling company to arrange for the secure
disposal and reuse of our old IT equipment, and as part of the
head office refurbishment we carried out the following reuse or
recycle initiatives:

• during the strip-out, the “Great MAB Giveaway” initiative

saw us offer any existing office furniture and equipment to
employees in exchange for a minimum donation to the Derby
City Mission Charity . This initiative was also extended to
charities and businesses with around ten local organisations
taking office furniture and equipment for their own use;

• the existing mechanical and electrical equipment

(airconditioning units, central heating systems, pipes and
radiators, scrap metal etc) was either recycled or in some
cases re-purposed by local contractors for re-use elsewhere;
and

• all previous monitor equipment stock was purchased by
our supplier for re-purposing, re-sale, recycling or secure
disposal to WEEE standards .

The adoption of new technology and processes can be an
important waste minimisation factor, and improvements to
our MIDAS technology platform and to the structure of our
compliance function have meant ARs, advisers and their
clients are required to print fewer documents . Our focus
on reducing the level of printing undertaken by the Group
continues .

We no longer use plastic mineral water bottles or single use
plastic drinking cups .

Why green mortgages are important

Green mortgages are important as they drive the right
behaviours . They naturally focus clients’ attention towards
energy efficient homes, either from buying a new build or
making improvements to their own home to improve its energy
efficiency . This supports the overall drive to reduce emissions
and protect the planet, and in turn, benefits all those involved .
The client benefits from lower bills via cheaper running costs
(and potentially lower rates from the green mortgage deal),
while the lender benefits from increased demand because
they’ve been able to offer this deal . It also helps to improve
their profile as a socially responsibly lender, and it increases
demand for builders and other companies who provide the
resources to increase the energy efficiency of homes across
the UK . I feel that green mortgages can only be seen as a
good thing, and having conversations like this will help to raise
further awareness and drive the right behaviours .

How MAB has supported you in selling green mortgages to
your customers

MAB has provided a range of resources in the form of
webinars, literature, and practical examples, mainly via the
Green Hub . This has instilled me with confidence in terms
of my discussions with clients (especially during the initial
rollout) . I’ve always felt I have the support to have in-depth,
detailed discussions with my clients around the topic of green
mortgages, and I know where to turn if there is anything I’m
unsure of . MAB highlight specific products on the sourcing
system for green mortgages, which makes it easier to identify
and supports my discussions with my clients . Moving forward,
I feel this will be an everchanging and evolving area, and the
support that I receive will remain invaluable .

“

Modern slavery

Anti-bribery policy

MAB recognises that it has a
responsibility to take a robust
approach to the issues derived from
the Modern Slavery Act 2015 and
has implemented processes that
are aimed at ensuring that there is
no slavery or human trafficking in its
business or supply chains.

To enable us to assess whether a
particular activity is at high risk of
facilitating modern slavery or human
trafficking:

• MAB holds a Risk Register of all
operations, and regularly reviews
this in the context of supply chain
and business operations.

• There are no high-risk activities
identified in relation to modern
slavery or human trafficking.

The nature of MAB Group’s supply
chain reflects the fact that it is
primarily a recipient of services, rather
than goods and materials. Essentially,
it relies on a mix of general business
suppliers (ranging from facilities
management support to technology
solutions), as well as financial
services providers, such as mortgage
providers and insurance providers.
The relationships with many of these
key suppliers and outsourcers are
well-established, with appropriate
governance and oversight procedures
in place.

We also review our salaries on an
annual basis to ensure our employees
are not paid below the national
minimum wage. We provide a
competitive package of benefits to all
employees.

A copy of our Modern Slavery and
Human Trafficking Statement can
be found on our website at www.
mortgageadvicebureau.com/modern-
slavery-and-human-trafficking.

MAB highly values its reputation
for ethical behaviour and upholding
the utmost integrity. We have a zero
tolerance approach to bribery and
corruption and ensure that all of our
employees and suppliers are ade-
quately trained to limit our exposure to
bribery by:

• Setting out clear anti-bribery and

corruption policies;

• Providing mandatory training to all

employees;

• Encouraging our employees to be
vigilant and report any suspected
cases of bribery in accordance with
the specified procedures; and

Forward looking statements
The strategic report is prepared for
the members of MAB and should not
be relied upon by any other party for
any other purpose. Where the report
contains forward- looking statements
these are made by the Directors in good
faith based on the information available
to them at the time of their approval of
this report.

Consequently, such statements should
be treated with caution due to the
inherent uncertainties, including both
economic and business risks underlying
such forward looking statements and
information. The Group undertakes
no obligation to update these forward
looking statements.

• Escalating and investigating

On behalf of the Board

Lucy Tilley

Chief Financial Officer

27 March 2023

instances of suspected bribery
and assisting the police or other
appropriate authorities in their
investigations.

Gender pay reporting

The Equality Act 2010 (Gender Pay
Gap Information) Regulations 2017
requires all employers with 250 or
more employees in the UK to publish
details of their gender pay gap.

The aim of this legislation is to achieve
greater transparency about gender
pay difference. The analysis is based
on data as at 5 April of each year and
shows the differences in the average
pay between men and women. More
details can be found on our website at

https://www.mortgageadvicebureau.
com/gender-pay-gap.

Governance | Board of Directors

The Board comprises three Executive and five Non-Executive Directors. A short biography of each Director is set out below:

Katherine Innes Ker,
Aged 62
Non-Executive Chair

Peter Brodnicki,
Aged 60
Chief Executive Officer

Katherine has extensive executive and
non-executive director experience.
She is Senior Independent Director of
Forterra plc, Non-Executive Director
of Vistry Group plc and GRIO plc,
and Chair of toob ltd. Her experience
as a Chair includes The Television
Corporation plc, Shed Media plc,
Victoria Carpets plc and Sovereign
Housing Association, and she was
Deputy Chair of Marine Farms S.A.
Katherine has been a Non-Executive
Director of, amongst others, St
Modwen Properties plc, Taylor Wimpey
plc, Taylor Woodrow plc, Fibernet
plc, Williams Lea plc, S&U plc and
Gyrus Group plc. She is Chair of the
Remuneration Committee, Balliol
College, Oxford.

As one of the founders of MAB in
2000, Peter has more than 35 years’
experience in mortgage and financial
services. Prior to founding MAB, he
was with Legal & General for five years,
where he held the position of Head of
the Estate Agency Network, and also
latterly as Recruitment Director. Peter’s
experience prior to Legal & General
includes sales and management roles
at Albany Life, before which he was
at John Charcol. Peter has received
a number of industry awards over the
years, including Business Leader of the
Year six times, Mortgage Strategist of
the Year twice, and the Industry’s Most
Influential Person.

Ben Thompson,
Aged 53
Deputy Chief Executive
Officer

Ben has been in financial services
since 1986 and before joining MAB in
2018, he was Chief Executive Officer
of ULS Technology, the AIM-listed
provider of online B2B platforms for
the UK conveyancing and financial
intermediary markets. Prior to that, he
held senior positions at Legal & General
Group Plc, where he ran their market-
leading mortgage distribution business,
as well as the banking division.

Before Legal & General, Ben held roles
at Paymentshield, St. James’s Place,
Winterthur Life and TSB. He also has
extensive experience in both retail and
private banking, as well as in residential
property, in particular estate agency.

Lucy Tilley,
Aged 51
Chief Financial Officer

Lucy joined MAB in May 2015 as
Finance Director and became Chief
Financial Officer in July 2019. She
qualified as a Chartered Accountant in
1996 with KPMG. Prior to joining MAB,
Lucy was a director in the corporate
broking team at Canaccord Genuity
Limited, and was part of the team
that worked on MAB’s admission to
AIM in November 2014. At Canaccord
Genuity Limited, she advised numerous
quoted and unquoted companies
predominantly in the financial services
sector.

Stephen Smith,
Aged 65
Non-Executive Director

David Preece,
Aged 62
Non-Executive Director

Mike Jones,
Aged 59
Non-Executive Director

Stephen has worked in the financial
services market for over 40 years and
was responsible for Legal & General’s
award-winning Mortgage Club, estate
agency and surveying operations,
before retiring at the end of 2017. He
is a former deputy chairman of The
Association of Mortgage Intermediaries
and served on its board for 14 years.
He is a Fellow of the Chartered Institute
of Bankers and holds a number of non-
executive directorships with companies
operating in the mortgage and Fintech
markets.

David joined MAB as an Executive
Director in 2004 and retired as Chief
Operating Officer in 2019, remaining
on the Board as a Non-Executive
Director. He has more than 40 years
of experience in financial services
and is an Associate of the Chartered
Institute of Bankers. Prior to joining
MAB, David’s roles included Senior
Manager at NatWest Group Financial
Control, Head of Mortgage Operations
at NatWest and Head of Membership
Services at the Britannia Building
Society.

Mike joined Lloyd Bank plc in 1985
and retired from Lloyds Banking
Group plc (LBG) at the end of 2020.
He worked in various roles across the
group, most recently as Managing
Director, Intermediaries & Specialist
Brands since 2010. His primary role
was leading the Halifax, BM Solutions
and Scottish Widows Bank business
development teams, working with
mortgage intermediaries across the
UK. Mike chaired the LBG Housing
Forum, the LBG Intermediary Conduct
Forum and was responsible in the UK
for Birmingham Midshires, Scottish
Widows Bank and intelligent Finance.
He was also responsible for LBG's
European retail bank operating in
Germany and The Netherlands, a
role that sees him continue into 2021
as Chair of the Supervisory Board
of Lloyds Bank GmbH following his
appointment in March 2019.

Nathan Imlach,
Aged 53
Senior Independent
Non-Executive Director

Nathan is Chief Strategic Adviser to
AIM listed Mattioli Woods plc, where
his focus is on acquisitions and
contributing to its future direction. He
qualified as a Chartered Accountant
with Ernst & Young, specialising in
providing mergers and acquisitions
advice to a broad range of quoted and
unquoted clients in the UK and abroad.
He is a Fellow of the Chartered Institute
for Securities & Investment and holds
the Corporate Finance qualification
from the Institute of Chartered
Accountants in England and Wales.
Nathan is also a trustee of Leicester
Grammar School Trust.

Governance | Company information

Company:

Directors:

Mortgage Advice Bureau (Holdings) plc

Katherine Innes Ker
Peter Brodnicki
Ben Thompson
Lucy Tilley
Nathan Imlach
Stephen Smith
Mike Jones
David Preece

Non-Executive Chair
Chief Executive Officer
Deputy Chief Executive Officer
Chief Financial Officer
Senior Independent Non-Executive Director
Independent Non-Executive Director
Independent Non-Executive Director
Non-Executive Director

Company secretary:

Fabien Holler

Registered office:

Capital House
Pride Place
Pride Park
Derby
DE24 8QR

Registered number:

04131569

Nominated adviser and joint broker:

Joint broker:

Auditor:

Solicitors:

Principal bankers:

Registrars:

Numis Securities Limited
45 Gresham Street
London
England
EC2V 7BF

Peel Hunt LLP
100 Liverpool Street
London
England
EC2M 2AT

BDO LLP
55 Baker Street
London
W1U 7EU

Norton Rose Fulbright LLP
3 More London Riverside
London
SE1 2AQ

NatWest Bank plc
Cumberland Place
Nottingham
NG1 7ZS

Equiniti Limited
Aspect House
Spencer Road
Lancing
West Sussex
BN99 6DA

Governance | Directors’ report

The Directors have pleasure in presenting their report together
with the financial statements for the year ended 31 December
2022. For the purposes of this report, the expression
“Company” means Mortgage Advice Bureau (Holdings) plc
and the expression “Group” means the Company and its
subsidiaries.

■ Results and business review

The principal activity of the Group continues to be the provision
of financial services, in particular the provision of mortgage
advice and advice on protection and general insurance
products. The principal activity of the Company is that of a
non-trading holding company. The review of the business,
operations, principal risks and outlook are included in the
Strategic report on pages 4 to 59. The financial statements set
out the results of the Group on pages 90 to 152.

In 2022, the Group has continued to deliver its strategy to
achieve year-on-year growth, irrespective of prevailing market
conditions:

• Group revenue increased by 22% to £230.8m;
•

Adviser numbers grew by 20% to 2,254 at 31 December
2022; and
Our market share of new mortgage lending increased by
19% to 7.5%.

•

These metrics are subject to sensitivity analysis, which
involves flexing a number of key assumptions underlying
the projections, including the effect of geopolitical and
macroeconomic uncertainty and inflationary pressures and
their impact on the UK property and lending markets and
the Group’s business volumes and revenue mix, which the
Directors consider to be severe but plausible stress tests
on the Enlarged Group’s cash position, banking covenants
and regulatory capital adequacy. The Group’s financial
modelling shows that the Enlarged Group should continue
to be cash generative, maintain a surplus on its regulatory
capital requirements and be able to operate within its current
financing arrangements.

Based on the results of the financial modelling, the Directors
expect that the Enlarged Group will be able to continue in
operation and meet its liabilities as they fall due over this
period. Accordingly, the Directors continue to adopt the going
concern basis for the preparation of the financial statements.

■ Events after the reporting date

There were no material events after the reporting period,
which have a bearing on the understanding of the
consolidated financial statements.

■ Directors

Adjusted profit before tax increased by 13% to £27.2m.
Group profit for the year after taxation amounted to £12.8m,
down 34% on the previous year due to the exceptional costs
incurred in the Fluent acquisition. Income tax expense for the
year was £4.6m, an effective rate of 26.4% (2021: 16.9%).

A list of the current serving Directors and their biographies is
given on page 60. Stephen Smith will not stand for re-election
at the 2023 Annual General Meeting scheduled to take
place on 24 May 2023, all the other Directors will stand for
(re-)election at the 2022 Annual General Meeting.

■ Dividends

■ Directors’ indemnity

In line with the Group’s dividend policy following the First
Mortgage acquisition of paying out a minimum of 75% of its
adjusted earnings, the Board recommends a final dividend
of 14.7 pence per share, totalling £8.4m. For the year as a
whole, the total dividend of 28.1 pence per share represents
a payout of 75% of the Group’s adjusted profit after tax for
2022, minorities and adjusting for non-cash items.

This has not been included within the Group financial
statements as no obligation existed at 31 December 2022.
If approved, the final dividend will be paid on 31 May 2023
to ordinary shareholders whose names are on the register on
28 April 2023. Dividends paid during the year amounted to
£16.0m and were in respect of the final dividend for the year
ended 31 December 2021 and the interim dividend for the
year ended 31 December 2022.

■ Going concern

The Directors have assessed the Enlarged Group’s prospects
until 31 December 2024, taking into consideration the current
operating environment, including the impact of geopolitical
and macroeconomic uncertainty and inflationary pressures
on property and lending markets. The Directors’ financial
modelling considers the Enlarged Group’s profit, cash flows,
regulatory capital requirements, borrowing covenants and
other key financial metrics over the period.

All Directors and Officers of the Company have the benefit of
the indemnity provision contained in the Company’s Articles
of Association and have received a deed of indemnity from
the Company. The Group also purchased and maintained
throughout the financial year Directors’ and Officers’ liability
insurance in respect of itself and its Directors and Officers,
although no cover exists in the event Directors or Officers are
found to have acted fraudulently or dishonestly.

■ Share capital

Mortgage Advice Bureau (Holdings) plc is a public limited
company incorporated in England and Wales and its shares
are quoted on the AIM market of the London Stock Exchange
plc. The Company’s issued share capital during the year
and as at 31 December 2022 is shown in note 26. Save as
agreed at the Annual General Meeting of the shareholders,
the ordinary shares have pre-emption rights in respect of any
future issues of ordinary shares to the extent conferred by
section 561 of the Companies Act 2006.

■ Rule 9 of the City Code

Under rule 9 of the City Code, where any person acquires
an interest in shares which carry 30% or more of the voting
rights that person is normally required to make a general offer
to all remaining shareholders of the Company to acquire their
shares.

The Panel on Takeovers and Mergers (“the Panel”) considers
two of the Directors (Peter Brodnicki and David Preece) as
persons acting in concert for the purposes of the City Code.
At 31 December 2022 the Concert Party held ordinary shares,
in aggregate, representing 19.9% of the issued share capital
of the Company.

■ Substantial shareholdings

At 31 December 2022, the Company had been notified of
the following interests representing 3% or more of its issued
share capital:

Shareholder

Liontrust Investment Partners
Peter Brodnicki
abrdn plc
Kayne Anderson Rudnick
Investment Management
Octopus Investments Nominees Ltd
M&G Plc
SEB Investment Management AB
Wasatch Advisors, Inc

Holding

19.33%
18.24%
9.88%

8.87%
5.05%
4.90%
3.33%
3.10%

■ Directors’ interests

Directors’ emoluments, beneficial interests in the shares of the
Company and their options to acquire shares are disclosed
in the Directors’ Remuneration Report. During the period
covered by this report, no Director had a material interest in
a contract to which the Company or any of its subsidiaries
was a party (other than their own service contract), requiring
disclosure under the Companies Act 2006. There are
procedures in place to deal with any Directors’ conflicts of
interest arising under section 175 of the Companies Act 2006
and such procedures have operated effectively.

■ Related party transactions

Details of related party transactions are given in note 29.

■ Employee engagement

At MAB, we are committed to investing in and developing
our employees to build the expertise and capacity to deliver
sustainable growth over the long term. We maintain a culture
that is based on knowledge, professionalism and diversity,
putting customers first and adopting a team-based, collegiate
approach. Retaining the commitment, integrity, expertise and
passion of our people is vital to our success and remains a
priority of the Board.

More details on how we have engaged with employees in
2022 can be found on in the Section 172(1) statement and
the Environmental, Social and Governance sections of the
Strategic Report on pages 41 to 43 and 49 to 52.

to all employees and contributes to the pension schemes
of Directors and all employees. The Group operates an
Unapproved Incentive Plan and a Share Incentive Plan, details
of which are given in the Directors’ Remuneration Report and
the financial statements.

The Mortgage Advice Bureau (Holdings) plc Share Incentive
Plan (“the SIP”) enables eligible employees to buy shares in
the Company in a tax advantageous manner by having an
amount deducted from pre-tax salary each month. In addition,
the Company grants participating employees matching
shares. The SIP is proving ever more popular among our
employees, with MAB employee participation now standing at
48% (2021: 44%). The take up among the employees of First
Mortgage has also kept increasing year-on-year since the
acquisition on 2 July 2019. The average monthly contribution
has also increased to £111 (2021: £108).

■ Engagement with customers and suppliers

Engaging with our stakeholders is very much a part of our ethos
as it strengthens our relationships and helps us to make better
business decisions to deliver on our commitments. The Board is
regularly updated on wider stakeholder engagement feedback to
stay abreast of customers, suppliers and shareholders’ insights
into the issues that matter most to them and our business.

In particular, maintaining an active dialogue and supporting our
ARs is key to our business. We use a collaborative approach in
operational matters such as setting goals and objectives and
hold regular review meetings with each AR firm. We also work
with specialist ARs and providers to explore new ideas and
growing markets.

Several initiatives were introduced and built upon throughout
the year to maximise engagement with our ARs and advisers.
Investment were made across all of our major support functions,
including sales, recruitment, marketing, regulatory and
compliance. In 2022 we extended the scope of our customer
care team to assist ARs and advisers in maximising every
opportunity.

Regular business owner forums are used to educate our
business owners on current trends, market updates and
developments at MAB whilst fortnightly clinics are also held
at an adviser level. Such sessions are designed to increase
adviser skill and knowledge and ultimately to help support
their proposition to their clients. These events supplement our
content rich online platform, MABChat, which is used across
our network, as well as MABHub, our training and competency
online platform.

Fluent holds regular meetings with its key lead partners, ranging
from weekly to monthly depending on the partner. Fluent
produces a detailed suite a reporting KPIs for its lead partners,
with KPIs including lead volumes, sales conversions, product
choice, rate, payment, revenues, and many other customer
data points. This KPI pack can also be automated and delivered
directly into partner platforms in a timing schedule to suit them.

We continue to share the success of the Group with our
employees. MAB operates a WorkSave Pension Plan available

We aim to be at the forefront of providing good advice to
consumers, leveraging our proprietary MIDAS platform, by
offering our customers the choice of how they want to transact

Governance | Directors’ report (continued)

whilst giving our ARs the tools to improve their productivity. ARs
input regularly into the MIDAS platform for instance through the
Regular User Group that has been established. We continue
to enhance our vulnerable customer strategy to ensure that
appropriate support is provided when customers need it most.

We have further invested in our learning and development
function and improved both our adviser induction process and
Academy programmes to support our ARs with the recruitment
of advisers. We have streamlined and created new content for
our academy courses to allow advisers to be operational sooner
whilst not compromising on the quality of customer outcomes.

In 2022, we created a new leadership programme, the “Deliver
Wow Academy” and opened it to our AR business leaders.
In total, 60 managers from our AR partners undertook the
training course. The Deliver Wow Academy contains 9 modules
including Emotional Intelligence, Effective Communication,
Succession Planning and How to be Bolder. Our new bespoke
training sessions have been tailored to our advisers’ individual
development needs, and are proving very popular.

More details on our community engagement and charitable
donations can be found in the Environmental, Social and
Governance section of the Strategic Report on pages 53
to 56.

■ Political donations

The Group has made no political donations during the year
(2021: £nil).

■ Annual General Meeting

The Annual General Meeting (AGM) of the Company will
be held on 24 May 2023. The notice of meeting is included
with this document and contains further information on the
ordinary business to be proposed at the meeting.

■ Principal risks and uncertainties

The Directors’ view of the principal risks and uncertainties
facing the business is summarised in the Strategic report on
pages 29 to 40. A full review of financial risk management can
be seen on pages 140 to 143.

Each region now has a dedicated learning and development
consultant who works with our ARs and their advisers to help
create bespoke learning packages to drive the knowledge and
skill required to help our customers.

■ Corporate governance

A full review of Corporate governance appears on pages 65
to 73.

In recognition of our approach to learning and development,
MAB is proud to have achieved the City & Guilds Princess Royal
Training Award. The award is an honour for UK employers across
all industries that have created lasting impact by successfully
linking their skills development needs to business performance.

The quality of consumer outcomes is central to our culture,
which is reflected in our compliance strategy. We run regular
compliance workshops for each AR firm, and in 2022 we further
improved MAB Hub, the online platform first launched in 2020
to aid with the provision of proactive and efficient compliance
support to our ARs whilst helping their advisers with continuing
professional development.

Strong and sustainable relationships with our product providers
are also fundamental to our success. We hold regular roundtable
events with them where topics such as business process
improvements are discussed as a group. This open dialogue has
for instance contributed to the implementation by our technology
team of a more seamless mortgage submission process. We
continue to complete further direct to lender submission routes
for mortgage applications and have plans to extend these further
in 2022, with the major top 10 lenders.

■ Auditors

BDO LLP, who were appointed as auditors during 2014, have
confirmed their willingness to continue in office as auditor in
accordance with Section 489 of the Companies Act 2006.
The Group is satisfied that BDO LLP are independent and
there are adequate safeguards in place to safeguard their
objectivity. A resolution to re-appoint BDO as the Company’s
auditor will be proposed at the AGM on 24 May 2023.

■ Directors’ statement as to disclosure of information to the

auditor

All of the Directors who were members of the Board at the
time of approving the Directors’ Report have taken all the
steps they might reasonably be expected to have taken to
make themselves aware of any relevant audit information and
to establish that the auditor is aware of that information. To
the best of each Director’s knowledge and belief, there is no
relevant audit information of which the Company’s auditor is
unaware.

On behalf of the Board

Maintaining good relationships with suppliers is also important to
us. In 2022 we paid 97% of all our invoices within 30 days and
won a Fast Payer Award.

Lucy Tilley

Chief Financial Officer

■ Community engagement and charitable donations

Corporate Social Responsibility is important to the Group, and
we try to engage with the communities in which we operate in
a meaningful and impactful manner.

27 March 2023

Governance | Corporate governance

■ Introduction

The Board is committed to achieving high standards of corporate
governance, integrity and business ethics. Under the AIM
Rules the Group is required to apply a recognised corporate
governance code. The Board adopted the Quoted Companies
Alliance (“QCA”) corporate governance code, which requires the
Group to apply 10 principles focused on the pursuit of medium
to long-term value for shareholders and also to publish certain
related disclosures.

As a Board we believe that good governance is crucial to the
delivery of our strategic objectives. We aim always to remain
abreast of best practice and of developments in the regulatory
framework within which we operate, and in the way in which we
seek to serve the needs of our customers.

Further details on MAB’s corporate governance are contained in
the section entitled ‘Corporate Governance’ on MAB’s investor
website (www.mortgageadvicebureau.com/investor-relations).

■ Board composition and independence

In 2022, the Board of Directors comprised three Executive
Directors, four independent Non-Executive Directors and one
other Non-Executive Director. Their biographies on page 60
demonstrate a range of experience which is key to the success
of the Group.

The four independent Non-Executive Directors are considered
by the Board to be independent of management and free
from any relationship which might materially interfere with the
exercise of independent judgement. As such, they provide a
strong independent element to the Board. The Board does
not consider the independent Non-Executive Directors’
shareholdings to impinge on their independence. Nathan
Imlach is the Senior Independent Director.

All the Non-Executive Directors bring a mix of skills and
experience at a senior level of business operations and
strategy. Together they bring the skills and experience which
support our strategic direction and our culture.

All Directors have access to the Company Secretary, Fabien
Holler, who is responsible for ensuring that Board procedures
and applicable rules and regulations are observed. The Board
meets at least seven times each year, and additional meetings
are held as required. The Board is the principal forum for
directing the business of the Group.

■ Operation of the Board

The Board is responsible to shareholders for the proper
management of the Group, sets its long-term objectives
and commercial strategy, and approves its business plans,
operating and capital budgets, and the interim and annual
accounts.

The Board considers and approves the Group’s dividend
policy, changes in the Group’s capital and financing
structure, and significant transactions including acquisitions
and disposals. The Board is responsible for ensuring the
maintenance of a sound system of internal control and

risk management, for Board appointments and succession
planning, the approval of the Remuneration Policy and
remuneration arrangements for the Directors and other senior
managers, and for setting the terms of reference for Board
Committees. Other matters are delegated to management,
supported by policies for reporting to the Board.

The Company maintains appropriate insurance cover in
respect of legal action against the Company’s Directors, but
no cover exists in the event that a director is found to have
acted fraudulently or dishonestly.

The agenda and papers for Board meetings are distributed by
the Company Secretary on a timely basis, usually five days
before each Board meeting.

The roles of Chair and Chief Executive Officer are distinct
with clear division of responsibilities. The Chair’s role is to
ensure good corporate governance, and her responsibilities
include leading the Board, ensuring the effectiveness of the
Board in all aspects of its role, setting the Board’s agenda,
ensuring that all directors participate fully in the activities and
decision making of the Board, and ensuring communication
with shareholders. As part of the Senior Managers and
Certification Regime (SM&CR) which applies to the Company
as an FCA-regulated firm, the Chief Executive Officer, Deputy
Chief Executive Officer and Chief Financial Officer each have
a specific role clearly set out in a statement of responsibilities.
Together, they are responsible for overseeing the development
and the delivery of the strategy approved by the Board, and
the day-to-day operational and commercial management
of the Group by the senior executive team. The Board is
committed to developing the corporate governance and
management structures of the Group to ensure they continue
to meet the ongoing needs of the business.

On appointment, Board members, in particular the Chair and
the Non-Executive Directors, disclose their commitments and
agree to allocate such time as is necessary to the Company
in order to discharge their duties effectively. The Board has
considered the time commitments of each director and is
comfortable that each has sufficient available capacity to
carry out the required duties for the Company. Any conflicts of
interest are dealt with in accordance with the Board’s conflict
of interest procedures.

All Executive and Non-Executive Directors retire and put
themselves forward for re-election annually at each Annual
General Meeting. Stephen Smith will not seek re-election at
the 2023 Annual General Meeting. All the other Directors will
stand for re-election.

The Board aims to lead by example and do what is in the
best interests of the Company. We have a strong set of values
as part of our MABology behaviours framework, that we
communicate as fundamental to achieving good customer
outcomes and promoting business success, and this is core
to our culture. The board is committed to ensuring MAB has a
healthy corporate culture and conducts an annual staff survey
as part of this.

Governance | Corporate governance (continued)

■ Induction, training and performance evaluation

The effectiveness evaluation process focused on the following
areas:

All the Directors keep abreast of key issues and developments
pertaining to industry, financial, regulatory and governance
matters. The Directors regularly attend briefing seminars,
conferences and/or industry forums, read trade publications
and undertake training courses or online learning to keep
up-to-date on relevant matters. Where appropriate, the Board
receives presentations from industry and professional experts.
The Chief Executive Officer and Deputy Chief Executive
Officer are regular participants at a number of industry
specific conferences, and the Chief Financial Officer regularly
participates in seminars on accounting, other financial and
governance matters.

In addition, the Non-Executive Directors hold other
directorships and continually add to their skillset through
those connections. Regular and open communication
ensures that relevant information is disseminated effectively
to the Board as a whole. Any Director, on appointment and
throughout their service, is entitled to receive any training they
consider necessary to fulfil their responsibilities effectively.

As required by SM&CR, the non-executive Chair regularly
assesses the continuing fitness and propriety of each Board
member and their individual contributions to ensure amongst
other things that:

• their contribution is relevant and effective;
• they are committed; and
• where relevant, they have maintained their independence.

Board evaluation

In 2022 the recommendations and conclusions of the Board
evaluation that had been undertaken in 2020 were kept under
review and acted upon as necessary. A summary of the
findings of the review of the Board’s, Committee’s and Chair’s
performance and overall effectiveness is detailed below. In
the course of the year the Terms of Reference for each of the
committees of the Board were updated to reflect changes
required by developments in governance standards and
practices. A Schedule of Matters Reserved for the Board was
updated to reflect the change in size of the Group since the
IPO in 2014.

• composition, mix of skills and experience, diversity;
• procedures and operation of the Board and Committees;
• culture and tone from the top;
• stewardship and governance; and
• strategy.

The evaluation confirmed that the board understands its
strengths and weaknesses, and can respond appropriately
according to changing market and business needs. The
Board concluded that the composition of the Board and its
Committees are appropriate, procedures in place are effective,
responsibilities are divided clearly, and the Directors have the
skills and experience, independence and knowledge to allow
the Board and its Committees to effectively discharge their
duties. The Senior Independent Director conducted a separate
review with each of the Directors to assess the performance
of the Chair and compiled a detailed report on these areas,
shared with the Chair, and which concluded that the Chair
was effective, and had the requisite skills, experience and
knowledge required.

Induction programme

The Board has an induction programme so that new directors
receive a formal induction on their appointment covering the
activities of the Group, its key business, governing law and
corporate governance codes, strategy, financial and regulatory
risks, the terms of reference of the Board and its Committees,
and the latest financial information. The induction programme
includes meetings with the Executive Directors, Company
Secretary, members of the Executive board and other members
of management, meetings with external advisers including our
Nominated Adviser and auditors as appropriate, and access to
Board and Committee papers and minutes.

■ Board committees

To assist in discharging its duties, the Board has delegated
authority to four specialist committees: an Audit Committee,
a Group Risk Committee, a Remuneration Committee, and
a Nominations Committee. The terms of reference of each
committee are approved by the Board and kept under review.
The Chair of each committee provides a report of any meeting
of that committee at the following Board meeting.

■ Meetings and attendance

All directors are expected to attend all Board meetings and meetings of Committees of which they are members. In 2022, the
number of Board meetings held was higher than scheduled as the Group faced the challenges caused by the cost of living
crisis, and evaluated and executed the acquisitions of Fluent, Vita and Auxilium. Directors’ attendance at meetings during the
year was as follows:

Meetings attended
(eligible to attend)

Katherine Innes Ker
Peter Brodnicki
Ben Thompson
Lucy Tilley
Nathan Imlach
Michael Jones
Stephen Smith
David Preece

Board

17 (17)
17 (17)
15 (17)
17 (17)
15 (17)
17 (17)
17 (17)
17 (17)

Audit Remuneration

Nomination

GRC

5 (5)
–
–
–
5 (5)
5 (5)
5 (5)
–

6 (6)
–
–
–
5 (6)
6 (6)
6 (6)
–

1 (1)
1 (1)
–
–
1 (1)
0 (1)
1 (1)
–

8 (8)
8 (8)
8 (8)
8 (8)
8 (8)
8 (8)
8 (8)
8 (8)

Notes:
1.

David Preece stood down as a member of the Audit and Remuneration Committees following the Company’s 2020 AGM. He remains an observer on these
Committees.

■ Audit Committee

The Audit Committee comprises Nathan Imlach (Chair), Katherine Innes Ker, Mike Jones and Stephen Smith. Nathan Imlach
is a Chartered Accountant and the Board is satisfied that all members of the committee have recent and relevant financial
experience. We have considered the Financial Reporting Council’s guidance that the Committee should have competence
relevant to the financial services sector and have concluded that the Committee, as a whole, satisfies this requirement. The
Board believes the Committee is independent, with all members being independent Non-Executive Directors.

The responsibilities of the Audit Committee are outlined in the Committee’s Terms of Reference, with its key responsibilities
being:

• to review the reporting of financial and other information to the shareholders of the Company and to monitor the integrity of

the financial statements;

• to review the Company’s accounting procedures and provide oversight of significant judgement areas;
• to review the effectiveness of the Group’s internal financial control and risk management systems;
• to review the effectiveness of the external audit process and the independence and objectivity of the external auditor;
• to review audit fees and proposals for future years; and
• to report to the Board how it has discharged its responsibilities.

Committee meetings are normally attended by representatives of the external and internal auditors. The Chief Executive Officer,
Chief Financial Officer and Deputy Chief Executive Officer are invited to attend at the Committee’s request. The presence of
other senior executives from the Group may be requested. The Committee meets the Chief Financial Officer not less than four
times a year and with representatives of the external auditors, without management present, at least once a year.

There is a cross membership with the Group Risk Committee, to help ensure that agendas are aligned, and key information is
shared appropriately across the Board Committees.

Activities during the year

The Audit Committee met five times during the year, where it considered the significant financial and audit issues, the
judgements made in connection with the financial statements and reviewed the narrative within the Annual Report and the
Interim Report.

During the year the Audit Committee continued to monitor the internal audit function, which has been outsourced to RSM Risk
Assurance Services LLP since March 2021. In light of an ever-changing regulatory environment, the committee resolved that
outsourcing gives the Company access to greater skills externally, while having the ability to expand or reduce our internal audit
activities to meet the ongoing demands of the business.

Governance | Corporate governance (continued)

The Audit Committee also considered the appointment of, and fees payable to, the external auditor and discussed with them
the scope of the interim review and annual audit.

Specific audit issues the committee discussed included:

• Assessment of whether each entity and the group as a whole are going concerns, including whether forecast performance

would result in an adequate level of headroom over the group’s available cash facilities;

• The correct recognition of revenues under IFRS 15;
• Review of the whether any impairment needed to be recognised in respect of the intangible assets of the group, including the

assumptions underlying the calculation of the value in use of the cash generating units tested for impairment;

• Review of whether any impairment needed to be recognised in respect of the carrying value of trade and other receivables;
• Review of provisions recognised in respect of commission on life policies that may be clawed back if the policy lapses within
four years of being taken out and management’s key assumptions and estimates applied in reaching these recognition and
measurement decisions;

• Review of whether any impairment needed to be recognised in respect of the carrying value of investments in and loans to

associates, or investments in non-listed equity shares;
• Review and approval of the internal audit plan for the year;
• Development of an audit and assurance policy;
• The design and implementation of enhanced information technology general controls around logical access management and
change management for the Company’s key financial systems through segregation of duties, adherence to formal change
processes and formal user access reviews; and

• A review of the Committee’s performance.

Significant judgements and estimates

Significant critical accounting judgements and key estimates in connection with the group’s financial statements for the year
ended 31 December 2022 and other matters considered by the committee included:

Goodwill and intangible assets

As set out in Note 14 to the Group financial statements,
at 31 December 2022, the Group had goodwill of £54.4m
(2021: £15.2m). Under IAS 36, these balances are assessed
annually for impairment. Impairment testing requires the
application of judgement, largely around the assumptions
that are built into the calculation of the value in use of the
cash generating unit being tested for impairment.

The committee considered the impairment reviews
carried out by management. These reviews focused on
the assumptions underlying the calculation of the value
in use of the cash generating units tested for impairment.
The underlying cash flow assumptions were challenged
by management and the committee, having regard
to historical performance. This was supported by the
challenge to the Group’s budgets earlier in the year.

The main assumptions reviewed by the committee
were the achievability of long-term business plans and
the discount rate used as outlined in Note 14. These
assumptions were subject to sensitivity analysis by
management which was also reviewed by the committee.

The committee concluded that the carrying values
of goodwill and intangibles included in the financial
statements are appropriate.

Acquisition accounting

Business combinations are accounted for using the
purchase accounting method. This involves assessing the
fair value of the assets acquired and whether any assets
acquired meet the criteria for recognition as separately
identifiable intangible assets. Intangible assets are
measured on initial recognition at their fair value at the date
of acquisition.

The committee reviewed the purchase price allocations
prepared by management, supported by appointed
third-party experts, on the purchase of Fluent, Vita and
Auxilium during the year. These reviews focused on the
underlying future cash flow assumptions and the discount
rate used to determine the present value of the cash flows
attributable to the subject intangible assets.

Contingent consideration payable on acquisitions

The Group has entered into certain acquisition agreements
that provide for a contingent consideration to be paid.
A financial instrument is recognised for all amounts
management anticipates will be paid under the relevant
acquisition agreement. This requires management
to consider whether contingent payments should be
accounted for as consideration or remuneration, make
an estimate of the expected future cash flows from the
acquired business and determine a suitable discount rate
for the calculation of the present value of any contingent
consideration payments. As set out in note 15, the carrying
amount of contingent consideration provided for at
31 December 2022 was £nil (2021: £2.2m).

Clawback provision

As detailed in Note 24, the Group recognises a provision
for the estimated cost of repaying commission income
received upfront on protection policies that may lapse in
the four years following issue. This provision is an estimate
and the actual amount and timing of future cash flows are
dependent on future events.

Management reviews this provision at each reporting date
to ensure it is measured at the current best estimate of the
expenditure required to refund the liabilities. Any difference
between the amounts previously recognised and the current
estimate is recognised immediately in the statement of
comprehensive income.

The committee concluded that the fair values of the
identifiable assets and liabilities of these acquired
businesses as at their respective dates of acquisition
included in the financial statements are appropriate.

The committee considered management’s assessment of
the amounts that will be paid under the relevant acquisition
agreements. These reviews focused on the assumptions
underlying the cash flows covering the contingent
consideration period.

Following this review, the committee was satisfied that
the judgements exercised were appropriate and that the
contingent consideration payable on acquisitions was fairly
stated in the financial statements.

The committee considered and challenged the nature of
the provision, the potential outcomes and the prior history
of cancellations in order to assess whether the provision
recorded is prudent and appropriate.

The committee discussed with management the key
elements of judgement to assure themselves as to the
adequacy and appropriateness of the provision. Following
this discussion, the committee was satisfied that the
judgements exercised were appropriate and that the
provision was fairly stated in the financial statements.

Governance | Corporate governance (continued)

Use of alternative performance measures

The Group has identified certain measures that it believes
will assist in the understanding of the performance of the
business. These measures are not defined under IFRS
but can be used, subject to appropriate disclosure in the
Annual Report and Accounts. These alternative performance
measures are net revenue, administrative expenses ratio,
adjusted operating profit, adjusted profit before tax, adjusted
EBITDA, adjusted profit after tax, adjusted earnings per
share, headline cash conversion, adjusted cash conversion,
and net debt, as set out on pages 160 to 162.

Other matters

In addition to the above matters, the committee assessed
whether each entity and the Group as a whole are going
concerns.

The committee also reconsidered a number of other
judgements made by management including IFRS 2
‘Share-based payment’, IFRS 9 ‘Financial instruments’ and
IFRS 16 ‘Leases’.

The committee considered the measures and felt that
these alternative performance measures are those
considered by management to be important comparables
and key measures used within the business for assessing
performance. They are not substitute for, or superior to,
any IFRS measures. The committee was also satisfied that
the disclosure of the alternative performance measures
was appropriate.

The committee considered whether the forecast
financial performance would result in an adequate level
of headroom over the Group’s available cash facilities.
The committee also discussed the key assumptions
underpinning the Group’s forecast financial performance
with management regularly during the year and considered
a range of sensitivities to those forecasts, together with
the feasibility and effectiveness of mitigating factors. The
committee concluded there are no material uncertainties
that cast doubt about the Group’s ability to continue as a
going concern and that the adoption of the going concern
basis is appropriate.

The committee considered management’s approach,
proposed disclosures, assessment of impact on the
financials and the judgements made in relation to
impairment allowances and the factors considered around
expected credit losses on financial instruments.

Internal audit

The internal audit function is responsible for providing assurance over the design and operational effectiveness of the internal
controls related to the Group’s key activities. Our internal audit activity is based around a strategic, risk-based approach to
cyclical internal audit with consideration of the Group’s key strategic priorities and risks. This approach is designed to provide
assurance over key areas including; governance, risk management and control. During the year the internal audit function
engaged in a number of activities, including:

• Developing our internal audit plan based on an analysis of the Group’s corporate objectives, risk profile and assurance

framework, as well as other factors such as emerging issues in our sector;

• Delivering audits providing assurance over the Group’s procurement arrangements, oversight of Appointed Representatives,
employee wellbeing and hybrid working arrangements, operational resilience and commission payments and reconciliation;
and

• The internal audit function has developed a forward-looking plan to provide the Group with assurance over key areas of

regulatory focus in 2023, including the new Consumer Duty and conduct risk management. The plan is supplemented by
additional reviews on core business areas including information technology general controls as well as work due under a
cyclical approach.

As the third line of defence, the internal audit function (together with the external auditors in connection with their audit of
the financial statements) builds risk awareness within the organisation by challenging the first and second lines of defence to
continue improving the internal control framework.

External auditor

The Committee is responsible for:

An analysis of fees payable to the external audit firm in
respect of audit and non-audit services during the year is
set out in note 6 to the financial statements. The Company
is satisfied the external auditor remains independent in the
discharge of their audit responsibilities.

The Committee also reviews the external auditor’s
management letter and detailed presentations are made to the
Committee by the Company’s auditor at least once a year.

■ Remuneration Committee

As at 31 December 2022, the Remuneration Committee
comprised Katherine Innes Ker (Chair), Nathan Imlach,
Stephen Smith, and Mike Jones.

The Committee meets not less than twice a year, and more
frequently as required. It is responsible for determining and
reviewing the Group’s policy on executive remuneration and
other benefits, ensuring that this is aligned to the delivery of
the Group’s strategic objectives and terms of employment,
including performance-related bonuses and share options.
The Committee administers the operation of the share option
and share incentive schemes established by the Company.

The members of the Remuneration Committee have no
personal interest in the outcome of their decisions and
seek to serve the interests of shareholders to ensure the
continuing success of the Company. All members of the
Remuneration Committee are independent Non-Executive
Directors. The remuneration of the Non-Executive Directors
is determined by the Executive Directors of the Board. No
Director is permitted to participate in decisions concerning
their own remuneration.

The Committee met six times during the year, with key items
considered including:

• The Group’s remuneration policy and its operation;
• Annual review of the Executive Directors’ and other Senior

Managers’ base salaries and bonus arrangements;
• The impact of the cost of living crisis and support for

employees, with a focus on the lower paid;

• Awards to be granted under the share option and share

incentives schemes operated by the Company; and

• Vesting of executive share options.

The Committee continues to review the Group’s long-term
incentive plans to ensure it can continue to attract, retain and
incentivise appropriately qualified staff to achieve its goals.

Further information about the Committee and the Group’s
remuneration policy is as set out on pages 74 to 79 in the
Directors’ Remuneration Report.

■ Nominations Committee

The Nominations Committee comprises Katherine Innes Ker
(Chair), Nathan Imlach, David Preece, Stephen Smith, Mike
Jones and Peter Brodnicki.

• reviewing the size, structure and composition (including the
skills, knowledge, experience and diversity) of the Board
and to make recommendations to the Board with regard to
any changes;

• succession planning for both Executive Directors and

Non-Executive Board roles, and other Senior Executives in
the Group; and

• identifying and recommending to the Board for approval

candidates to fill Board and senior management vacancies
where required.

The Committee works in close consultation with the Executive
Directors, with its main priorities being Board structure,
ensuring that we have the right skills and experience to fulfil
our responsibilities, and management development and
succession.

The Nominations Committee met once during the year, to
consider succession planning for the Executive Directors,
to note appointments to and succession planning for
the executive team, and to consider the development of
succession planning for the Non-Executive Directors. Mike
Jones replaced Stephen Smith as Chair of the Group Risk
Committee on 1 November 2022.

■ Group Risk Committee, and Risk and Compliance

Committee

The Group Risk Committee (GRC) comprises Stephen Smith
(Chair until 31/10/22), Mike Jones (Chair from 1 November
2022), Katherine Innes Ker, Nathan Imlach, David Preece,
Peter Brodnicki, Ben Thompson and Lucy Tilley. In 2022
the Group created a new role and appointed Paul Gill as
Chief Risk Officer (CRO). Committee meetings are normally
attended by Paul Gill.

The GRC met eight times in 2022 (five in 2021) to review and
consider the following:

• All major Group-related existing and potential risks,
including a review of the Group Risk Register, Risk
Appetite and Management Framework, and any Risk and
Compliance Committee escalations;

• The Consumer Duty regulations;
• Regulatory consultation papers and impending legislation

changes;

• Senior Managers and Certification Regime (SM&CR);
• General Data Protection Regulation (GDPR);
• Cyber Security;
• Operational Resilience;
• M&A activity
• Environmental, Social and Governance (ESG), vulnerable

clients, diversity, and any other relevant regulatory themes;

• The effectiveness of the Group’s procedures on

whistleblowing, anti-bribery and corruption, and anti
money-laundering; and

• Other major risk considerations and relevant upcoming

legislation.

Governance | Corporate governance (continued)

The increased number of GRC meetings in 2022
predominantly reflected the work involved in planning for
implementation of the Customer Duty regulations and the
integration of Fluent.

The Risk and Compliance Committee (RCC) is chaired by
the Chief Risk Officer. The RCC meets monthly and reports
into the GRC. The remit of the RCC include reviewing the
adequacy and effectiveness of the Company’s internal
controls, compliance and risk management systems (including
conduct risk), ensuring that the Company is fulfilling its
regulatory responsibilities. As and when required, the RCC
escalates major risk events to the GRC.

Statement of Risk Appetite (SORA)

The Statement of Risk Appetite outlines the amount and
type of risk that the Group is prepared to accept in pursuit
of its strategic objectives. Factors such as market, people,
technology, regulation and policies help shape the Group’s
risk appetite. At least annually the Statement of Risk Appetite
is formally reviewed and approved by the Risk & Compliance
Committee, Group Risk Committee and the Board.

The Group retains a balanced overall appetite for risk,
ensuring that its internal controls support business growth
expectations and mitigate risk to appropriate levels.

Risk Management Framework

Risk assessment

The Group’s risk framework is designed to ensure that
risks are identified, managed and reported effectively. The
appointment of a new Chief Risk Officer (CRO) in 2022 has
been key to further enhancing the Group’s risk management
framework, and this appointment has been supplemented by
the adoption of the TriLine Governance, Risk and Compliance
solution, which offers an effective portal for the tracking
of risk-related activity, and the appointment of a Risk Data
Analyst.

As part of the ongoing enhancements of the risk management
framework the Group also re-designed its risk taxonomy
to enable more cohesive and transparent risk insight and
reporting. The risk taxonomy was reviewed and approved
by GRC in September 2022 and has subsequently been
embedded into the TriLine system.

MAB operate a “three lines of defence” model to support our
risk management framework summarised as follows:

• First line: senior management and risk owners accountable
for identifying, managing, assessing and treating risks sits
within first line. These responsibilities include implementing
and operating systems and controls to manage risk,
identifying and reporting risks, reducing risk and
implementing revisions where risks exceed risk appetite;
and regularly assessing of risks within their remit.
• Second line: the second line consists of the following

teams: Operational Risk, Compliance Policy & Governance,
Quality & Risk Assurance, Supervision and Data
Protection & Information Security who all provide a level
of independence from the first line. They are responsible
for providing oversight and challenge of the first line’s
day-to-day management, monitoring and reporting of risks
to both senior management and in RCC.

• Third line: our external and internal audit partners are

responsible for providing independent assurance to both
senior management and the Audit Committee as to the
effectiveness of the Group’s governance, risk management
and internal controls.

Output from the three lines of defence model is reported into
the Risk & Compliance Committee on a monthly basis.

All risk owners within MAB are required to identify and assess
their departmental risks on a quarterly basis. TriLine has been
configured to align with MAB’s risk taxonomy and supports
risk owners with the following:

• Risk identification
• Assessment of risks and the potential consequences
• Management of significant risks
• Reporting and monitoring of risks
• Ownership of the risk management framework

The Group’s risk assessment process includes the
assessment of the inherent and residual likelihood and impact
of a risk materialising. Reporting is presented to the Risk
and Compliance Committee following quarterly reviews with
relevant information being presented to GRC and the Board.

Consumer Duty

The Financial Conduct Authority published its final rules
on the Consumer Duty in July 2022, with rules coming
into effect on 31 July 2023. The MAB Board approved the
Group’s Consumer Duty Implementation Plan which sets
out the intended plan and approach to enable MAB to meet
the requirements of the duty by the deadline as established
by the FCA. The plan has identified appropriate project and
governance arrangements through which progress against the
plan will be tracked by the Board.

The enhanced customer outcomes focus principally
encompasses the following:

• products and services;
• price and value;
• customer understanding; and
• customer support.

Under the new rules, MAB is required to ensure that
customers receive products that provide “fair value” and to
challenge product providers where required.

Good customer outcomes have always been central to
MAB’s strategy. The MAB team have made good progress
against the planned activities, which includes reviewing our

the nature of the Group’s operations. There are two Board
committees that review various risks: the Audit Committee
and the Group Risk Committee. Further details of these
committees are described on pages 67 to 73.

The Group maintains appropriate insurance cover and reviews
the adequacy of the cover regularly, in conjunction with the
Group’s insurance brokers.

On behalf of the Board

Lucy Tilley

Chief Financial Officer

27 March 2023

processes, policies, communications, and customer journey,
to ensure we achieve good customer outcomes through our
interactions and engagement with customers and that where
changes are required, these are implemented across the
business ahead of the 31 July 2023 implementation date.

To drive these changes, we have also appointed an Executive
Champion for Consumer Duty, who is the ultimate sponsor,
promoter, and supporter of the new regulation. Significant
time, focus and resource has enabled us to make good
progress towards meeting the 31 July 2023 deadline. This is
a large body of new work for MAB, but one we believe will
further strengthen the Group and the important role it plays in
the housing and mortgage markets.

MAB is also actively engaged in the work of Association of
Mortgage Intermediaries (AMI) trade body on Consumer Duty
and its requirements.

■ Communications with shareholders

The Board is committed to maintaining communication
with the Company’s shareholders. The principal methods
of communication with private investors remain the Annual
Report and financial statements, the Interim Report, the AGM
and the Group’s website (www.mortgageadvicebureau.com/
investor-relations).

All Directors will normally attend each AGM and shareholders
are given the opportunity to ask questions. In addition, the
Chief Executive Officer, Deputy Chief Executive Officer and
Chief Financial Officer welcome dialogue with individual
institutional shareholders to understand their views and
feed these back to the Board. General presentations are
also given to analysts and investors covering the annual and
interim results, and prompt feedback is received by the Board
through the Company’s corporate brokers.

The Board aims to be open with shareholders and available to
them, subject to compliance with relevant securities laws. The
Chair and other Non-Executive Directors make themselves
available for meetings as appropriate.

■ Internal control and risk management

The Board is ultimately responsible for the Group’s system
of internal control and for reviewing its effectiveness. Such
systems are designed to manage rather than eliminate risks
and can only provide reasonable not absolute assurance
against material misstatement or loss.

The Directors believe that the Group has internal control
procedures in place appropriate to the size and nature of the
business. In accordance with the guidance of the Turnbull
Committee on internal control, an ongoing process is in
operation for the identification, evaluation and management
of significant risks faced by the Group. The Board routinely
reviews the effectiveness of the system of internal control
and risk management to ensure controls react to changes in

Governance | Directors’ remuneration report

■ Remuneration committee

■ Remuneration activity in response to the cost-of-living crisis

The committee is responsible for the Group’s policy on
executive remuneration, including performance related annual
bonus and share option awards, other benefits, and terms of
employment. The Committee also administers the operation
of the share option schemes and share incentive schemes
established by the company, including the Long Term
Incentive Plan (LTIP) and Appointed Representative option
scheme. The Committee operates under terms of reference
approved by the Board.

The members of the Committee as at 31 December 2022 were
Katherine Innes Ker (Chair), Nathan Imlach, Stephen Smith,
and Mike Jones.

■ Remuneration policy

The Group’s remuneration policy sets basic salaries at a level
which is competitive with comparable AIM-listed businesses,
with a substantial proportion of the overall package of
compensation linked to performance through participation
in short and long term incentive schemes. Executive
Directors receive other customary benefits such as pension
contributions, death in service insurance, sick pay, and private
medical insurance. The objective is to attract, retain and
appropriately incentivise high performing executives capable
of achieving the Group’s objectives and thereby enhance
shareholder value.

During the year, the Committee reviewed the operation of
the remuneration policy, assessing the appropriateness and
effectiveness of the performance measures and the balance
between the use of short and long term performance measures,
being the annual bonus and the LTIP.

The Committee agreed to rebalance the Executive Directors’
remuneration structure in favour of longer term objectives
from 2023 onwards. The maximum potential payout under the
annual bonus is reduced from 200% to 150% of base salary
and the annual award under the LTIP increased from 100% to
150% of base salary. This better aligns the remuneration with
best practice and with shareholder interests.

In addition, the annual bonus performance targets for 2023
include ESG performance measures. From being based 100%
on adjusted PBT, in 2023 the performance targets will become
based 90% on adjusted PBT and 10% on ESG measures
related to achieving good customer outcomes. These measures
are selected by the GRC and derived from KPIs monitored and
reported on to track the quality of advice, and recommended
to the Remuneration Committee for inclusion in the 2023
annual bonus. These new performance targets reflect the
importance to the Group of a robust governance framework
putting the customer first and the work that has been carried
out towards the implementation of the new Consumer Duty.
The Remuneration Committee will consider including further
meaningful ESG-related metrics in the LTIP performance criteria
from 2024 onwards.

In 2022 the average pay rise awarded to employees across
the Group was 4.5%. In response to the cost of living crisis
that was precipitated in early 2022 by the war in Ukraine, the
Board awarded in June 2022 an additional £1,000 pay rise
to all eligible non-bonussed head office employees, aimed at
benefiting the lowest paid employees. None of the Executive
Directors, senior management, or other employees with
a significant element of bonus received the pay increase.
The Executive Directors reduced their allocations in the 2022
LTIP awards from 1.75x to 1.0x base salary to part fund the
additional cost of the salary increases.

In addition, a £250 cash bonus was awarded to all
non-bonussed head office employees in December 2022.
None of the Executive Directors, senior executives or
employees with a significant element of bonus received the
cash bonus.

■ Salaries and fees

Salaries for Executive Directors are reviewed annually, taking
into account increases in base pay for employees and
external benchmark data, and the effective date for changes
in Directors’ remuneration is 1 January. After remaining
unchanged throughout 2021, reflecting the impact of the
continuing pandemic and the uncertain economic outlook,
the Executive Directors’ salaries were increased by 4.5% from
1 January 2022, in line with the average across the Group.

Fees for the Non-Executive Directors are determined by
the Executive Directors, having regard to the fees paid to
Non-Executive Directors in other AIM-listed companies of
a similar size and complexity, the time commitment and
the responsibilities of the role. Non-Executive Directors do
not receive bonuses and do not participate in the share
incentive schemes. No options are held by the Independent
Non-Executive Directors. No Director is permitted to
participate in decisions about his or her own remuneration.

For 2022, Non-Executive Directors were paid an annual base
fee of £38,400. In addition, a fee of is paid to the Chairs
of the Audit, Group Risk and Remuneration Committees,
and to the Senior Independent Director. Set at £3,600 and
£2,100 per annum respectively, these were benchmarked
against other AIM-listed companies and in part reflect
increasing responsibilities including under the Senior
Managers and Certification Regime.

Effective 1 January 2023, the base salaries of Peter Brodnicki
and Ben Thompson were raised by 10%, and Lucy Tilley’s
base salary was raised by 12%. These increases reflect the
near doubling in size of the Group following the acquisition of
Fluent, Vita and Auxilium, and the increase in the scale and
scope of the Executive Directors’ responsibilities.

Annual base fees for the Non-Executive Directors were
increased from 1 January 2023 to £40,000 and the fee
for chairing a Committee of the Board was increased to
£9,000 pa. These better align the NED fees with other
AIM listed businesses of a similar scale and reflect the
increased responsibility that results from the FCA’s enhanced
supervisory regime, and in particular the introduction in 2023
of the new Consumer Duty.

■ Annual bonus

In 2022, the annual bonus scheme was based on the actual
increase in adjusted Profit Before Tax achieved for the year
compared to the highest previous adjusted Profit before
Tax, a “high watermark scheme”, before the impact of the
acquisitions made in year. The maximum award under the
scheme was 200% of basic salary for any individual Executive
Director.

The growth in profit in 2022 was measured over the adjusted
profit before tax for the year ended 31 December 2021, as the
previous high watermark profit of £23.2m. This resulted in a
bonus pool distributed between the Executive directors, and
details are given on page 76.

A transaction bonus was awarded to the Executive Directors
and to key executives on the successful completion and
integration of the acquisition of Fluent, and details are given
on page 76. As stated on page 74, from 2023 onwards, the
annual award under the annual bonus scheme will be capped
at 150% of base salary, and performance targets will no
longer be solely based on adjusted PBT.

■ Long Term Incentive Plan

The Group has adopted the Mortgage Advice Bureau
Executive Share Option plan as the Long Term Incentive
Plan (LTIP) to incentivise certain of its senior employees and
directors.

On 6 June 2022, 154,850 options over ordinary shares
of 0.1 pence each in the company were granted to the
Executive Directors and senior executives of MAB under
the Mortgage Advice Bureau Executive Share Option Plan.
The exercise of the options is subject to the achievement of
performance conditions based on total shareholder return
(TSR) and earnings per share (EPS) criteria. Subject to the
achievement of the performance conditions, these options will
vest on 6 April 2025. The exercise price for these options is
0.1 pence, being the nominal cost of ordinary shares.

The 2019 LTIP award vested in July 2022. Half of the award
was subject to an EPS performance condition measured
over three financial years and the other half subject to a
TSR performance condition measured over three years from
grant. 100% of the TSR performance condition was achieved,
and just over 80% of the EPS performance condition was
achieved. As a result, just over 90% of the total award vested.

■ Service contracts

It is the Group’s policy for all Executive Directors to have
contracts of employment that contain a termination notice
period not exceeding twelve months. The appointment
of the Chief Executive Officer, Peter Brodnicki, continues
until terminated by either party giving not less than twelve
months’ notice to the other party. The appointments of the
Deputy Chief Executive Officer, Ben Thompson, and of the
Chief Financial Officer, Lucy Tilley, continue until terminated
by either party giving not less than six months’ notice to the
other party.

The Non-Executive Directors do not have service contracts.
A Letter of Appointment provides for an initial period of
36 months and continues until terminated by either party by
giving three months’ prior written notice at any time after the
initial 36-month period. All Directors are subject to annual
re-election at the Annual General Meeting.

■ Employee incentivisation and reward

MAB is committed to the provision of an inclusive working
environment and ensuring the fair reward of all employees,
regardless of seniority across the business. In addition to the
Executive Directors and senior management, the Committee
considers wider workforce remuneration and reward.

■ Share Incentive Plan

The Mortgage Advice Bureau (Holdings) plc Share Incentive
Plan (SIP) enables employees to buy shares in the Company
at an effective discount to the London Stock Exchange
price by having an amount deducted from pre-tax salary
each month. In addition, the Company grants participating
employees matching shares.

The Share Incentive Plan is proving ever more popular
among our employees, with MAB employee participation
now standing at 48% (2021: 44%). The take up among
the employees of First Mortgage has also kept increasing
year-on-year since the acquisition on 2 July 2019.
The average monthly contribution has also increased to
£111 (2021: £108).

Governance | Directors’ remuneration report (continued)

■ Single total figure of remuneration for each director

The Directors’ remuneration payable in respect of the year ended 31 December 2022 was as follows:

Basic salary and fees

Annual
bonus1

Pension
contributions

Benefits2

Long-term
incentive plan3

Total

2022
£000s

2021
£000s

2022
£000s

2021
£000s

2022
£000s

2021
£000s

2022
£000s

2021
£000s

2022
£000s

2021
£000s

2022
£000s

2021
£000s

410
276
268

954

89
44
42
68
42

286

1,239

390
258
250

898

85
42
40
93
33

293

282
282
242

806

440
440
342

1,223

–
–
–
–
–

–

–
–
–
–
–

–

1,192

806

1,223

–
2
–

–
–
–
–
–

–

–
5
4

–
–
–
–
–

–

2
2
–

–
–
–
–
–

–

2
1
–

–
–
–
–
–

–

298
298
232

827

–
–
–
–
–

–

127
357
127

611

–
–
–
38
–

993
859
741

2,593

89
44
42
68
42

286

959
1,062
723

2,744

85
42
40
131
33

332

827

649

2,878

3,075

Executives
Peter Brodnicki
Ben Thompson
Lucy Tilley

Sub-Total

Non-Executives
Katherine Innes Ker
Nathan Imlach
Stephen Smith
David Preece4
Mike Jones

Sub-Total

Total

For 2022, bonuses include a £100k transaction bonus paid to each Executive Director relating to the Fluent acquisition.
The benefit package of each Executive Director includes the provision of life assurance and the option of private medical assurance under a Group scheme.

Notes:
1.
2.
3. TotaI market price of shares under option vesting during the year at their vesting date, less any option exercise price payable.
4.

For 2022, basic salary and fees figure included Non-Executive Director fees of £38,400 (2021: £36,500) and an additionaI consultancy fee of £30,000 (2021:
£56,600).

■ Directors’ interests in shares

As at 31 December 2022, the interest of the Directors in the Ordinary shares of the Company were:

Director

Peter Brodnicki
David Preece
Ben Thompson
Nathan Imlach
Lucy Tilley
Katherine Innes Ker
Mike Jones
Stephen Smith

Ordinary shares of 0.1p

10,401,336
924,800
83,915
26,057
21,131
16,304
3,000
–

18.24
1.62
0.15
0.05
0.04
0.03
0.01
–

Note:
Directors’ shareholdings include any shareholdings of trusts or family members deemed to be connected persons.

■ Interest in options

The Group operates the Mortgage Advice Bureau Executive Option Plan by which certain of the Executive Directors and other
Senior Executives are able to subscribe for ordinary shares in the Company. All options were measured at fair value at the date
of grant. The interests of the Directors during 2022 were as follows:

Director
Peter Brodnicki (1)
(2)
(3)
(4)
(5)

Ben Thompson (1)
(2)
(3)
(4)

Lucy Tilley

(1)
(2)
(3)
(4)
(5)

Date
granted
Jun-22
Apr-21
Jul-20
Jul-19
Apr-18

Jun-22
Apr-21
Jul-20
Jul-19

Jun-22
Apr-21
Jul-20
Jul-19
Apr-18

Exercise
price
£
0.001
0.001
0.001
0.001
0.001

0.001
0.001
0.001
0.001

0.001
0.001
0.001
0.001
0.001

At 1 Jan
2022
No.
–
19,766
37,108
37,396
9,957

104,227

–
19,766
37,108
37,396

94,270

–
17,570
28,862
29,085
9,957

85,474

Granted
during
the year
No.
36,262
–
–
–
–

Forfeited/
Exercised Not vested
during
the year
No.
–
–
–
3,679
–

during
the year
No.
–
–
–
–
–

24,097
–
–
–

23,231
–
–
–
–

–
–
–
–

–
–
–
–
–

–
–
–
3,679

–
–
–
2,862
–

At 31 Dec
2022
No.
36,262
19,766
37,108
33,717
9,957

136,810

24,097
19,766
37,108
33,717

114,688

23,231
17,570
28,862
26,223
9,957

105,843

Notes:
(1) Unapproved Option scheme - first date exercisable is 6 April 2025, last date exercisable is 6 April 2030.
(2) Unapproved Option scheme - first date exercisable is 1 April 2024, last date exercisable is 1 April 2029.
(3) Unapproved Option scheme - first date exercisable is 22 April 2023, last date exercisable is 22 July 2028.
(4) Unapproved Option scheme - first date exercisable is 1 July 2022, last date exercisable is 1 July 2027.
(5) Unapproved Option scheme - first date exercisable is 11 April 2021, last date exercisable is 9 April 2026.

■ LTIP awards

All the LTIP awards are subject to a three-year service period from the date of grant. Half of the award is subject to a condition
relating to the Company’s growth in adjusted EPS over three financial years (the EPS Performance Condition), and the other half
is subject to a condition relating to the Company’s growth in TSR over three years from grant (the TSR Performance Condition).
Vested and unvested LTIP awards are subject to a formal malus and clawback mechanism.

The following performance conditions apply to the outstanding LTIP awards. Vesting is on a straight-line basis between
threshold and maximum.

Governance | Directors’ remuneration report (continued)

2020 award:

Metric

Vesting (% of maximum)

Weighting
(% of award) condition

Performance

Adjusted EPS

50%

Absolute growth in adjusted earnings

per share over the three-year

performance period

Total shareholder return (TSR)

50%

Average absolute annual growth in TSR

over the three years from grant

Threshold

Maximum

40%

100%

12.5%

7.5%

25%

15%

The 2020 award reflected the adverse impact of the Coronavirus pandemic on the Group’s adjusted EPS in 2020.

2021 award:

Metric

Vesting (% of maximum)

Weighting
(% of award) condition

Performance

Adjusted EPS

50%

Absolute growth in adjusted earnings

per share over the three-year

performance period

Total shareholder return (TSR)

50%

Average absolute annual growth in TSR

over the three years from grant

2022 award:

Metric

Vesting (% of maximum)

Weighting
(% of award) condition

Performance

Adjusted EPS

50%

Compound annual growth rate in EPS

Total shareholder return (TSR)

50%

Compound annual growth rate in

Threshold

Maximum

25%

100%

40%

70%

15%

Threshold

Maximum

25%

15%

100%

26%

shareholder value

10%

20%

Note 31 to the financial statements contains details of all options granted to directors and employees as at 31 December 2022.
All of the share options were granted for nil consideration.

■ Total shareholder return performance graph

The graph below illustrates the total shareholder return (TSR) for the eight years ended 31 December 2022 in terms of the
change in value of an initial investment of £100 against the corresponding TSR in hypothetical holdings of shares in the FTSE
AIM All Share Index.

The Company is a member of the FTSE AIM All Share Index and considers this to be the most appropriate broad equity
market index for the purpose of measuring the Company’s relative performance.

The mid-market closing price of the Company’s ordinary shares at 31 December 2022 was 530 pence and the range
during the financial year was 482 pence to 1,470 pence.

None of the Directors had an interest in any contract of significance in relation to the business of the Company or its
subsidiaries at any time during the financial year.

■ Shareholder engagement

We take a keen interest in our shareholders’ views on executive remuneration and welcome any feedback on the Directors’
Remuneration Report. At the 2022 AGM, 99.99% of the votes cast were in favour of accepting the Remuneration Report.

This Remuneration Report will be subject to an advisory vote at the 2023 AGM. Our goal is to be clear and transparent in the
presentation of this report and I look forward to shareholders’ support on this resolution.

On behalf of the Board

Katherine Innes Ker
Chair of the Remuneration Committee

27 March 2023

Governance | Directors’ responsibilities for the financial statements

The Directors are responsible for keeping adequate
accounting records that are sufficient to show and explain the
Group’s and the Company’s transactions and disclose with
reasonable accuracy at any time the financial position of the
Group and Company and enable them to ensure the financial
statements comply with the Companies Act 2006. They are
also responsible for safeguarding the assets of the Group
and Company and hence for taking reasonable steps for the
prevention and detection of fraud and other irregularities.

The Directors are responsible for ensuring the annual
report and the financial statements are made available on a
website. The maintenance and integrity of the corporate and
financial information included on the Group’s website is the
responsibility of the Directors. Legislation in the UK governing
the preparation and dissemination of financial statements may
differ from legislation in other jurisdictions.

The Directors are responsible for preparing the Directors’
report, strategic report and the financial statements in
accordance with applicable law and regulations.

UK company law requires the Directors to prepare Group
and Company financial statements for each financial year.
The Directors are required by the AIM Rules of the London
Stock Exchange to prepare Group financial statements in
accordance with International Accounting Standards in
conformity with the requirements of the Companies Act
2006 that are applicable to companies that prepare financial
statements in accordance with IFRSs.

Under company law the Directors must not approve the
financial statements unless they are satisfied that they give
a true and fair view of the state of affairs of the Group and
the Company and of the profit or loss of the Group for that
period. In preparing each of the Group and Company financial
statements, the Directors are required to:

• select suitable accounting policies and then apply them

consistently;

• make judgements and estimates that are reasonable and

prudent;

• state whether they have been prepared in accordance with

IFRSs adopted by the EU; and

• prepare the financial statements on the going concern basis
unless it is inappropriate to presume that the Group and the
Company will continue in business.

Governance | Independent auditor’s report to the members of

Mortgage Advice Bureau (Holdings) plc

Opinion on the financial statements

Conclusions relating to going concern

In auditing the financial statements, we have concluded that
the Directors’ use of the going concern basis of accounting
in the preparation of the financial statements is appropriate.
Our evaluation of the Directors’ assessment of the Group and
the Parent Company’s ability to continue to adopt the going
concern basis of accounting included:

• We have assessed the reasonableness of the assumptions

within the Directors’ forecast for liquidity and profitability for
a period of 12 months from the signing of these accounts
corroborating the inputs to supporting documentary
evidence. This involved considering the base and stress
scenarios testing undertaken by the Directors to support the
Going concern assessment which included assumptions
about the potential impact this could have on revenue
(mainly from purchase mortgages) and possible cost saving
measures. We assessed whether the capital and cash
positions are adequate and whether the Group complies
with its covenant requirements in both the base and stress
scenarios.

• We have reviewed publicly available information on the

house market and house price index to assess any impact
on going concern.

• We assessed how the directors have factored in ongoing
economic pressures such as high inflation, cost of living
crisis and increasing interest rates on the business,
checking these had been appropriately considered as part
of the Directors’ going concern assessment.

Based on the work we have performed, we have not identified
any material uncertainties relating to events or conditions
that, individually or collectively, may cast significant doubt on
the Group’s and the Parent Company’s ability to continue as
a going concern for a period of at least twelve months from
when the financial statements are authorised for issue.

Our responsibilities and the responsibilities of the Directors
with respect to going concern are described in the relevant
sections of this report.

In our opinion:

• the financial statements give a true and fair view of the state
of the Group’s and of the Parent Company’s affairs as at
31 December 2022 and of the Group’s profit for the year
then ended;

• the Group financial statements have been properly prepared
in accordance with UK adopted international accounting
standards;

• the Parent Company financial statements have been

properly prepared in accordance with United Kingdom
Generally Accepted Accounting Practice; and

• the financial statements have been prepared in accordance

with the requirements of the Companies Act 2006.

We have audited the financial statements of Mortgage
Advice Bureau (Holdings) PLC (the ‘Parent Company’) and
its subsidiaries (the ‘Group’) for the year ended 31 December
2022 which comprise the consolidated statement of
comprehensive income, consolidated and company statement
of financial position, consolidated and company statement
of changes in equity, consolidated statement of cash flows,
and notes to the financial statements, including a summary of
significant accounting policies.

The financial reporting framework that has been applied in the
preparation of the Group financial statements is applicable
law and UK adopted international accounting standards. The
financial reporting framework that has been applied in the
preparation of the Parent Company financial statements is
applicable law and United Kingdom Accounting Standards,
including Financial Reporting Standard 102 The Financial
Reporting Standard in the United Kingdom and Republic of
Ireland (United Kingdom Generally Accepted Accounting
Practice).

Basis for opinion

We conducted our audit in accordance with International
Standards on Auditing (UK) (ISAs (UK)) and applicable
law. Our responsibilities under those standards are further
described in the Auditor’s responsibilities for the audit of the
financial statements section of our report. We believe that the
audit evidence we have obtained is sufficient and appropriate
to provide a basis for our opinion.

Independence

We remain independent of the Group and the Parent
Company in accordance with the ethical requirements that
are relevant to our audit of the financial statements in the
UK, including the FRC’s Ethical Standard as applied to listed
entities, and we have fulfilled our other ethical responsibilities
in accordance with these requirements.

Governance | Independent auditor’s report to the members of

Mortgage Advice Bureau (Holdings) plc (continued)

Overview

Coverage

Key audit matters

99.1% (2021: 100%) of Group proﬁt before tax
99.9% (2021: 100%) of Group revenue
99.4% (2021: 100%) of Group total assets

Revenue Recognition
Clawback Provision
Valuation of deferred consideration and put/call options
Acquisition of subsidiaries

2022

2021

✔
✔
✔
✔

✔
✔
✔
✘

Materiality

Group financial statements as a whole

£1,006,000 (2021: £918,000) based on 5% (2021: 5%) of adjusted Profit before tax (2021: 3 year
average Profit before tax).

An overview of the scope of our audit

Our Group audit was scoped by obtaining an understanding of the Group and its environment, including the Group’s system
of internal control, and assessing the risks of material misstatement in the financial statements. We also addressed the risk of
management override of internal controls, including assessing whether there was evidence of bias by the Directors that may
have represented a risk of material misstatement.

The Group is made up of the Parent Company and its wholly owned subsidiaries. The significant components were determined
to be MAB Limited, MAB Derby Limited and Project Finland Topco Limited and its subsidiaries. These three components were
subject to full scope audits performed by the Group audit team. In respect of the non-significant components the Group audit
team carried out specific procedures on balances that were identified as material to the Group.

Key audit matters

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial
statements of the current period and include the most significant assessed risks of material misstatement (whether or not
due to fraud) that we identified, including those which had the greatest effect on: the overall audit strategy, the allocation of
resources in the audit, and directing the efforts of the engagement team. These matters were addressed in the context of our
audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on
these matters.

Key audit matter

How the scope of our audit addressed the key
audit matter

Revenue Recognition

We performed the following procedures:

Management’s associated accounting policies are outlined
in note 1 and with the detailed disclosure in note 3 to the
financial statements.

The Group’s revenue comprises of commissions (including
procuration fees), client fees and other income.

Revenue recognition is considered to be a significant audit
risk as it is a key driver of the return to investors and there
is a risk that there could be manipulation or omission of
amounts recorded in the system.

For these reasons we considered this to be a key audit
matter.

• We assessed whether the Group approved policies are in
accordance with the applicable accounting standards.

• We tested the operating effectiveness of the

reconciliation controls in place between revenue and
cash banked and agreed revenue per the reconciliation
to third party reports.

• For commission income we obtained the third party

reports supporting the transactions selected for testing
and traced a sample back to cash receipts.

• Using third party reports, we recalculated the procuration
fees to be recognised independently and agreed to cash
received.

• For client fees we agreed a sample to providers’

statements and cash receipts.

• We vouched a sample of other income to third party

reports and cash to check that they have been
accounted for in the correct period.

Key observations:

Based on these procedures we consider revenue to have
been recognised appropriately in line with accounting
standards.

Governance | Independent auditor’s report to the members of

Mortgage Advice Bureau (Holdings) plc (continued)

Key audit matters (continued)

Key audit matter

Clawback provision
Management’s associated accounting policies with detail
about judgements in applying accounting policies and
critical accounting estimates are outlined in note 2 with the
detailed disclosure in note 24 to the financial statements.

The clawback provision is an estimate of the commission
received up front that is repayable on life assurance policies
that may lapse in a period of up to four years following
inception of the policies. The significant estimates and
judgements made in determining the provision are set out in
note 2e to the financial statements.

The clawback provision is considered a significant audit risk
due to the management judgement and estimation applied
in calculating the repayment commission and we therefore
considered this to be a key audit matter.

How the scope of our audit addressed the key
audit matter

Our procedures included the following:

• We compared the relevant assumptions e.g. unearned
commission, likely future lapse rates and lapse rate
history used in the model with third party reports.

• For other assumptions e.g. age profile of the commission
received, the Group’s share of any clawback, and the
success of the Appointed Representatives in preventing
lapses and/or generating new income at the point of a
lapse, we validated these to management’s supporting
analysis of the Group’s actual experience based on data
gathered from third party providers’ statements.

• We tested the arithmetical accuracy of the spreadsheet

model.

• We agreed inputs into the model for a selected sample

back to third party supporting documentation.

• We reviewed the historic payback patterns and
performed testing on the historical accuracy of
management’s provisions by comparing clawbacks
during the current financial year to the prior year
provision raised.

Key observations:

Based on the procedures undertaken we consider the
judgments and estimates made by management in
calculating the clawback provision to be reasonable.

Key audit matter

How the scope of our audit addressed the key
audit matter

Valuation of deferred consideration and put/call options

Our procedures included the following:

Management’s associated accounting policies with the
detail about judgements in applying accounting policies
and critical accounting estimates are outlined in the notes
2 and with the detailed disclosure in note 15 to the financial
statements.

The Group has a number of investment in associates and
subsidiaries which either have a deferred consideration
element or put/call options assigned to them or both.

The valuation of these balances comprises of key inherent
risks for the Group with respect to management judgements
and estimates and we therefore considered this to be a key
audit matter.

Deferred Consideration

• We reviewed all share purchase agreements and traced

all payments to bank statements.

• We reviewed management’s deferred consideration

calculation and agreed the inputs back to supporting
documentation.

• We evaluated whether management’s deferred

consideration calculation was performed in accordance
with the applicable accounting standards.

Put/Call Options

• We reviewed all valuation reports prepared by

management’s expert and all options agreements and
agreed inputs back to supporting documentation. We
assessed whether the valuation was appropriate and in
accordance with applicable accounting standards.

• We assessed the reasonableness of the valuation

methodology used by management with the assistance
of our internal valuation experts.

Key observations:

Based on the procedures undertaken we consider the
judgments and estimates made by management on the
valuation of deferred consideration and put/call options to
be reasonable.

Acquisition of subsidiaries

The accounting policies and critical judgements and
estimates applied are disclosed within the Group’s
accounting policies in note 2 to the financial statements with
the detailed disclosure in note 18 to the financial statement.

We reviewed the Sale and Purchase Agreements to
understand the structure of the Transactions and to
confirm the consideration paid. We also assessed whether
the Group exercised control on those subsidiaries upon
completion of the Transactions in accordance with IFRS 10
and checked the effective dates of the Transactions.

During 2022, the Group completed the acquisitions of
subsidiaries (“the Transactions”) as set out in Note 18.

Our detailed procedures included the following:

The accounting for the acquisition balance sheet and the
subsequent Purchase Price Allocation (“PPA”) assessment,
involved the alignment of material accounting policies,
determination of the fair value of consideration, identification
and valuation of intangible assets at acquisition date
and the subsequent goodwill as well as put/call options.
Management engaged an external expert to undertake
the PPA assessment and assist with the assessment of
corporation tax and deferred tax balances associated with
the transaction.

These acquisitions are material, non-routine transactions
for the Group and the accounting considerations
and disclosures are complex and include significant
management estimates and judgements. We have therefore
determined this to be a key audit matter.

• We reviewed the reports prepared by management’s

experts and documentation from management on the
accounting treatment of the Transactions and held
various discussions with management to assess and
check whether the accounting treatment of the business
combination, put/call option and related accounting
matters were in line with the applicable accounting
standards.

• With the assistance of our internal valuation experts we
reviewed and assessed the valuation methodology and
significant assumptions, including the identification of
amounts related to customer relationships, and other
intangibles, included in the PPA.

• We evaluated the capabilities, competence, objectivity
and independence of the valuation experts engaged by
management for the PPA assessment.

Governance | Independent auditor’s report to the members of

Mortgage Advice Bureau (Holdings) plc (continued)

How the scope of our audit addressed the key
audit matter

• We have checked the completeness and reasonability

of intangible assets identified and capitalised by
management by understanding the business through
discussions with management, reviewing prior years
accounts and obtaining an understanding of material
business cycles.

• We reviewed the cashflow forecasts prepared by

management including inputs and assumptions used
to assess the fair value of intangible assets acquired
by comparing to actual and historical results and
industry data and the reasonableness of the underlying
information used.

• For the remaining balances, we performed audit

procedures and obtained supporting documentation, on
a sample basis, to confirm the completeness, accuracy
and carrying value of the amounts included on the
acquisition balance sheet.

• We checked the alignment of the subsidiaries’

accounting policies to group accounting policies and
tested management’s assessment and adjustments
as a result of the first time adoption of IFRS on those
acquired subsidiaries against the requirements of the
applicable accounting standards.

• We confirmed the acquisition accounting entries in

the group statements and the calculation of goodwill
against requirements of the applicable financial reporting
standard.

• With the assistance of our internal tax specialists,

we reviewed the corporation and deferred tax entries
associated with the Transactions and the recoverability
of the deferred tax asset recognised.

• We reviewed the adequacy of the disclosure notes in
the financial statements in relation to the Transactions
to assess compliance with the requirements of the
applicable accounting standards.

Key observations:

Based on the procedures performed, we considered the
methodology and assumptions used in the accounting for
the Transactions to be appropriate.

Key audit matter

Our application of materiality

We apply the concept of materiality both in planning
and performing our audit, and in evaluating the effect of
misstatements. We consider materiality to be the magnitude
by which misstatements, including omissions, could influence
the economic decisions of reasonable users that are taken on
the basis of the financial statements.

In order to reduce to an appropriately low level the probability
that any misstatements exceed materiality, we use a lower
materiality level, performance materiality, to determine

the extent of testing needed. Importantly, misstatements
below these levels will not necessarily be evaluated as
immaterial as we also take account of the nature of identified
misstatements, and the particular circumstances of their
occurrence, when evaluating their effect on the financial
statements as a whole.

Based on our professional judgement, we determined
materiality for the financial statements as a whole and
performance materiality as follows:

Group
financial statements

Parent Company
financial statements

2022

2021

2022

2021

Materiality

£1,006,000

£918,000

£268,000

£214,000

Basis for determining materiality

Rationale for the benchmark applied

5% of profit before tax,
excluding write off of
investment in non-listed
equity shares

5% of 3 year average
profit before tax

5% of Total investments

Profit before tax was
determined to be the most
appropriate benchmark
as the Group is listed with
profitability seen as the
main interest of investors.

As the Parent Company
is a holding company,
it was considered
appropriate to determine
materiality based on
Total investments.

The write off of investment
in non-listed equity shares
has been excluded as this
is a non-routine event.

Performance materiality

£754,000

£688,000

£201,000

£160,000

Basis for determining performance
materiality

75% of materiality based on our risk assessment and our assessment of expected
total value of known and likely misstatements.

Component materiality

Reporting threshold

We set materiality for each significant component of the
Group, including the parent company, based on a percentage
of between 43% and 79% (2021: 78% and 99%) of Group
materiality dependent on the size and our assessment of the
risk of material misstatement of that component. Component
materiality ranged from £436,515 to £792,000 (2021: £712,000
to £905,000). In the audit of each significant component, we
further applied performance materiality levels ranging from
65% to 75% (2021: 75%) of the component materiality to our
testing to ensure that the risk of errors exceeding component
materiality was appropriately mitigated.

We agreed with the Audit Committee that we would report
to them all individual audit differences in excess of £20,000
(2021: £18,000). We also agreed to report differences below this
threshold that, in our view, warranted reporting on qualitative
grounds.

Governance | Independent auditor’s report to the members of

Mortgage Advice Bureau (Holdings) plc (continued)

Other information

The directors are responsible for the other information. The
other information comprises the information included in the
Report and Financial Statements other than the financial
statements and our auditor’s report thereon. Our opinion on
the financial statements does not cover the other information
and, except to the extent otherwise explicitly stated in our
report, we do not express any form of assurance conclusion
thereon. Our responsibility is to read the other information
and, in doing so, consider whether the other information is
materially inconsistent with the financial statements or our
knowledge obtained in the course of the audit, or otherwise
appears to be materially misstated. If we identify such material

inconsistencies or apparent material misstatements, we are
required to determine whether this gives rise to a material
misstatement in the financial statements themselves. If, based
on the work we have performed, we conclude that there is a
material misstatement of this other information, we are required
to report that fact.

We have nothing to report in this regard.

Other Companies Act 2006 reporting

Based on the responsibilities described below and our work
performed during the course of the audit, we are required by
the Companies Act 2006 and ISAs (UK) to report on certain
opinions and matters as described below.

Strategic report and
Directors’ report

In our opinion, based on the work undertaken in the course of the audit:

Matters on which
we are required to
report by exception

• the information given in the Strategic report and the Directors’ report for the financial year for
which the financial statements are prepared is consistent with the financial statements; and

• the Strategic report and the Directors’ report have been prepared in accordance with applicable

legal requirements.

In the light of the knowledge and understanding of the Group and Parent Company and its environment
obtained in the course of the audit, we have not identified material misstatements in the strategic report
or the Directors’ report.

We have nothing to report in respect of the following matters in relation to which the Companies
Act 2006 requires us to report to you if, in our opinion:

• adequate accounting records have not been kept by the Parent Company, or returns adequate for

our audit have not been received from branches not visited by us; or

• the Parent Company financial statements are not in agreement with the accounting records and

returns; or

• certain disclosures of Directors’ remuneration specified by law are not made; or
• we have not received all the information and explanations we require for our audit.

Responsibilities of Directors

As explained more fully in the Directors’ responsibilities
statement, the Directors are responsible for the preparation
of the financial statements and for being satisfied that they
give a true and fair view, and for such internal control as the
Directors determine is necessary to enable the preparation of
financial statements that are free from material misstatement,
whether due to fraud or error.

In preparing the financial statements, the Directors are
responsible for assessing the Group’s and the Parent
Company’s ability to continue as a going concern, disclosing,
as applicable, matters related to going concern and using the
going concern basis of accounting unless the Directors either
intend to liquidate the Group or the Parent Company or to
cease operations, or have no realistic alternative but to do so.

Auditor’s responsibilities for the audit of the
financial statements

Our objectives are to obtain reasonable assurance about
whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error, and
to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance, but is
not a guarantee that an audit conducted in accordance with
ISAs (UK) will always detect a material misstatement when it
exists. Misstatements can arise from fraud or error and are
considered material if, individually or in the aggregate, they
could reasonably be expected to influence the economic
decisions of users taken on the basis of these financial
statements.

Extent to which the audit was capable of detecting
irregularities, including fraud

Irregularities, including fraud, are instances of non-compliance
with laws and regulations. We design procedures in line
with our responsibilities, outlined above, to detect material
misstatements in respect of irregularities, including fraud.
The extent to which our procedures are capable of detecting
irregularities, including fraud is detailed below:

We gained an understanding of the legal and regulatory
framework applicable to the Group and Parent Company
and the industry in which it operates and considered the
risk of acts by the Group and Parent Company which would
be contrary to applicable laws and regulations, including
fraud. These included but were not limited to compliance
with the Financial Conduct Authority (“FCA”) regulations,
FCA Mortgage Advice and Selling Standards, the applicable
accounting standards and tax legislation.

We assessed the susceptibility of the financial statements
to material misstatement, including fraud and considered
the fraud risk areas to be management override of controls,
the risk of fraud in revenue recognition and in relation to
accounting estimates such as the clawback provision and
intangible assets recognition and measurement.

Our procedures in response to the above included:

• reviewing the financial statement disclosures and testing
to supporting documentation to assess compliance with
relevant laws and regulations discussed above;

• enquiring of management and the audit committee for any
instances of non-compliance with laws and regulation and
any known or suspected instances of fraud;

• performing analytical procedures to identify any unusual or
unexpected relationships that may indicate risks of material
misstatement due to fraud;

• reading minutes of meetings of those charged with
governance and correspondence with the Financial
Conduct Authority to check for any instances of
non-compliance with applicable laws and regulations;

• in addressing the risk of fraud through management

override of controls, testing the appropriateness of journal
entries and other adjustments on a sample basis to
supporting documentation;

• in respect of the risk of fraud in relation to revenue

recognitions and in accounting estimates such as the
clawback provision and intangible assets recognition and
measurement, performing the procedures as set out in the
Key Audit Matters section of our report; and

• evaluating the business rationale of any significant

transactions that are unusual or outside the normal course
of business.

We also communicated relevant identified laws and
regulations and potential fraud risks to all engagement team
members and remained alert to any indications of fraud or
non-compliance with laws and regulations throughout the
audit.

Our audit procedures were designed to respond to risks of
material misstatement in the financial statements, recognising
that the risk of not detecting a material misstatement due
to fraud is higher than the risk of not detecting one resulting
from error, as fraud may involve deliberate concealment by,
for example, forgery, misrepresentations or through collusion.
There are inherent limitations in the audit procedures
performed and the further removed non-compliance with laws
and regulations is from the events and transactions reflected
in the financial statements, the less likely we are to become
aware of it.

A further description of our responsibilities is available
on the Financial Reporting Council’s website at:
www.frc.org.uk/auditorsresponsibilities. This description forms
part of our auditor’s report.

Use of our report

This report is made solely to the Parent Company’s members,
as a body, in accordance with Chapter 3 of Part 16 of the
Companies Act 2006. Our audit work has been undertaken so
that we might state to the Parent Company’s members those
matters we are required to state to them in an auditor’s report
and for no other purpose. To the fullest extent permitted by law,
we do not accept or assume responsibility to anyone other than
the Parent Company and the Parent Company’s members as a
body, for our audit work, for this report, or for the opinions we
have formed.

Ariel Grosberg
(Senior Statutory Auditor)

For and on behalf of BDO LLP, Statutory Auditor

London, UK

27 March 2023

BDO LLP is a limited liability partnership registered in England
and Wales (with registered number OC305127).

Financial statements | Consolidated statement of comprehensive income

for the year ended 31 December 2022

Revenue

Cost of sales

Gross profit

Administrative expenses

Impairment of loans to related parties

Share of profit of associates

Costs relating to First Mortgage, Fluent and Auxilium options

Amortisation of acquired intangibles

Acquisition costs

Impairment of associate

Non-listed equity investment written off

Profit on disposal of associate

Profit on sale of non-listed equity investment

Gain on fair value measurement of deferred consideration

Gain on fair value measurement of non-listed equity investment

(Loss)/gain on fair value measurement of derivative financial instruments

Operating profit

Finance income

Finance expense

Profit before tax

Tax expense

Profit for the year

Total comprehensive income

Profit is attributable to:

Equity owners of Parent Company

Non-controlling interests

Earnings per share attributable to the owners of the Parent Company

Basic

Diluted

All amounts shown relate to continuing activities.

The notes on pages 94 to 152 form part of these financial statements.

Note

2022
£’000

230,820

(167,873)

62,947

(36,000)

–

712

(1,999)

(2,582)

(2,755)

–

(2,783)

884

–

(18)

18,483

108

(1,238)

17,353

(4,574)

12,779

12,237

542

12,779

21.8p

21.6p

2021
£’000

188,663

(137,697)

50,966

(27,844)

(16)

1,011

(967)

(367)

–

(408)

–

311

–

283

328

23,297

(160)

23,182

(3,910)

19,272

18,722

550

19,272

35.2p

35.0p

Financial statements | Consolidated statement of financial position

as at 31 December 2022

Assets
Non-current assets
Property, plant and equipment
Right of use assets
Goodwill
Other intangible assets
Investments in associates and joint venture
Investments in non-listed equity shares
Derivative financial instruments
Other receivables
Deferred tax asset

Total non-current assets

Current assets
Trade and other receivables
Derivative financial instruments
Cash and cash equivalents

Total current assets

Total assets

Equity and liabilities
Share capital
Share premium
Capital redemption reserve
Share option reserve
Retained earnings

Equity attributable to owners of the Parent Company
Non-controlling interests

Total equity

Liabilities
Non-current liabilities
Trade and other payables
Provisions
Lease liabilities
Derivative financial instruments
Loans and other borrowings
Deferred tax liability

Total non-current liabilities

Current liabilities
Trade and other payables
Lease liabilities
Loans and other borrowings
Corporation tax liability

Total current liabilities

Total liabilities

Total equity and liabilities

Note

12
13
14
14
15
16
15
19
25

19
15
20

26
26
27
27
27

21
24
13
15
22
25

21
13
22

2022
£’000

6,128
3,872
53,885
55,823
11,387
–
320
831
1,797

134,043

10,288
–
25,462

35,750

169,793

57
48,155
20
4,511
15,154

67,897
7,548

75,445

9,438
8,038
3,014
10
16,598
14,659

51,757

34,397
933
6,809
452

42,591

94,348

169,793

The notes on pages 94 to 152 form part of these financial statements.

The financial statements were approved by the Board of Directors on 27 March 2023.

P Brodnicki
Director

L Tilley
Director

2021
£’000

2,667
2,457
15,155
2,704
12,433
2,783
220
1,098
1,871

41,388

6,341
142
34,411

40,894

82,282

53
9,778
20
3,523
25,408

38,782
2,205

40,987

2,583
5,716
2,202
34
–
757

11,292

29,342
394
–
267

30,003

41,295

82,282

Financial statements | Consolidated statement of changes in equity

for the year ended 31 December 2022

Attributable to the holders of the Parent Company

Share
capital premium
£’000

Capital
Share redemption
reserve
£’000

£’000

Share
option Retained
reserve earnings
£’000

£’000

Non–
controlling
interests
£’000

Total
£’000

Total
Equity
£’000

Balance as at 1 January 2021

9,778

1,807

23,882

35,540

1,908

37,448

–

1,210

649

–

Profit for the year

Total comprehensive income

Transactions with owners

Issue of shares

Share-based payment transactions

Deferred tax asset recognised in equity

Reserve transfer

Dividends paid

Transactions with owners

Balance as at 31 December 2021 and
1 January 2022

Profit for the year

Total comprehensive income

Transactions with owners

–

Issue of shares

38,377

Non-controlling interests on
acquisition of subsidiaries

Acquisition of subsidiaries

Share-based payment transactions

Deferred tax asset recognised in equity

Reserve transfer

Dividends paid

–

Transactions with owners

38,377

18,722

550

19,272

18,722

550

19,272

–

1,210

649

–

1,210

649

–

(143)

143

–

(17,339)

(253)

(17,592)

1,716

(17,196)

(15,480)

(253)

(15,733)

–

12,237

542

12,779

12,237

542

12,779

–

38,381

–

38,381

–

5,216

(6,540)

1,827

(767)

–

1,827

(767)

(72)

–

(6,540)

1,827

(767)

–

(16,023)

(415)

(16,438)

988

(22,491)

16,878

4,801

21,679

9,778

3,523

25,408

38,782

2,205

40,987

Balance as at 31 December 2022

48,155

4,511

15,154

67,897

7,548

75,445

Financial statements | Consolidated statement of cash flows
for the year ended 31 December 2022

Cash flows from operating activities
Profit for the year before tax
Adjustments for:
Depreciation of property, plant and equipment
Depreciation of right of use assets
Amortisation of intangibles
Profit from sale of non-listed equity investment
Profit from disposal of associate
Loss from disposal of fixed assets
Share-based payments
Share of profit from associates
Impairment and amount written off of associates
Amount written off of non-listed equity investment
Gains on fair value movements taken to profit and loss
Dividends received from associates
Finance income
Finance expense

Changes in working capital
Increase in trade and other receivables
Increase in trade and other payables
Increase in provisions

Cash generated from operating activities

Income taxes paid

Net cash generated from operating activities

Cash flows from investing activities
Purchase of property, plant and equipment
Purchase of intangibles
Proceeds from sale of non-listed equity investment
Net cashflow on acquisition of subsidiaries
Acquisition of associates and deferred consideration for associates
Acquisition of non-listed equity shares

Net cash used in investing activities

Cash flows from financing activities
Proceeds from borrowings
Settlement of loan notes and accrued interest on acquisition
Repayment of borrowings
Interest received
Interest paid
Principal element of lease payments
Issue of shares
Costs relating to issue of shares
Dividends paid
Dividends paid to minority interest

Net cash used in financing activities

Net (decrease)/increase in cash and cash equivalents
Cash and cash equivalents at the beginning of year

Cash and cash equivalents at the end of the year

The notes on pages 94 to 152 form part of these financial statements.

Notes

2022
£’000

2021
£’000

17,353

23,182

12
13
14
16
15
12
31
15
15
16

15
8
8

19
21
24

12
14
16
18
15
16

22, 35
18, 35
22, 35
8

13
26
26
11

591
563
2,866
(58)
(19)
38
2,983
(712)
–
2,783
(866)
910
(108)
1,238

27,562

(1,317)
833
1,387

28,465

(4,124)

24,341

(3,229)
(615)
115
(49,157)
(1,327)
–

(54,213)

22,918
(21,891)
(1,500)
102
(102)
(547)
40,000
(1,619)
(16,023)
(415)

20,923

(8,949)
34,411

25,462

385
383
558
(311)
–
–
1,210
(1,011)
408
–
(611)
275
(45)
160

24,583

(1,475)
6,053
1,140

30,301

(3,433)

26,868

(205)
–
331
–
(5,010)
(2,500)

(7,384)

–
–
–
47
(160)
(349)
–
–
(17,339)
(253)

(18,054)

1,430
32,981

34,411

Financial statements | Notes to the consolidated financial statements

for the year ended 31 December 2022

1 Accounting policies

■ Basis of preparation

The principal accounting policies adopted in the preparation
of the consolidated financial statements are set out below.
The policies have been consistently applied to all the years
presented.

The consolidated financial statements are presented in Great
British Pounds and all amounts are rounded to the relevant
thousands, unless otherwise stated.

These financial statements have been prepared in
accordance with UK-adopted International Accounting
Standards in conformity with the requirements of the
Companies Act 2006 that are applicable to companies that
prepare financial statements in accordance with IFRSs.

The preparation of financial statements in compliance with
adopted IFRS requires the use of certain critical accounting
estimates. It also requires Group management to exercise
judgement in applying the Group’s accounting policies. The
areas where significant judgements and estimates have been
made in preparing the financial statements and their effect
are disclosed in note 2.

The financial statements have been prepared on a historical
cost basis, except for investments in non-listed equities and
derivative financial instruments relating to investments in
associates that have been measured at fair value.

The Group’s business activities, together with the factors
likely to affect its future development, performance and
position are set out in the Strategic Report as set out earlier
in these financial statements. The financial position of the
Group, its cash flows and liquidity position are described in
these financial statements.

The Group made an operating profit of £18.5m during 2022
(2021: £23.3m) and had net current liabilities of £6.8m as
at 31 December 2022 (31 December 2021: £11.0m assets)
and equity attributable to owners of the Group of £67.9m
(31 December 2021: £38.8m).

■ Going concern

The Directors have assessed the Group’s prospects until
31 December 2024, taking into consideration the current
operating environment, including the impact of geopolitical
and macroeconomic uncertainty and inflationary pressures
on property and lending markets. The Directors’ financial
modelling considers the Group’s profit, cash flows, regulatory
capital requirements, borrowing covenants and other key
financial metrics over the period.

Directors consider to be severe but plausible stress tests on
the Group’s cash position, banking covenants and regulatory
capital adequacy. The Group’s financial modelling shows that
the Group should continue to be cash generative, maintain a
surplus on its regulatory capital requirements and be able to
operate within its current financing arrangements.

Based on the results of the financial modelling, the Directors
expect that the Group will be able to continue in operation
and meet its liabilities as they fall due over this period.
Accordingly, the Directors continue to adopt the going
concern basis for the preparation of the financial statements.

■ Changes in accounting policies

New standards, interpretations, and amendments effective
for the year ended 31 December 2022

New standards, interpretations and amendments applied for
the first time

The Group applied a number of standards and interpretations
for the first time in 2022 but these did not have an impact
on the consolidated financial statements of the Group. The
Group has not early adopted any standards, interpretations or
amendments that have been issued but are not yet effective.

■ New standards with no impact on the Group

• Annual improvements to IFRS standards 2018 – 2020
(Effective 1 January 2022) The improvements impact
IFRS 1, IFRS 9, IFRS 16 and IAS 41. The Group is not
a first-time adopter of IFRS standards (IFRS 1) and
does not engage in agricultural activities (IAS 41) so the
improvements to those standards do not impact the
Group. The improvement to IFRS 16 removed illustrations
of accounting for lease incentives which are not relevant
to the Group’s leasing activities. Amendments to IFRS 9
clarified the 10% test for derecognition of financial liabilities
when considering payment of net fees. The Group has not
identified any material impact of the amendment on the
derecognition of its financial liabilities.

• Amendments to IAS 37 Onerous contracts – Cost

of fulfilling a contract (Effective 1 January 2022) The
amendments further clarify the costs of fulfilling a contract
that are to be assessed in relation to the requirements of
contracts being classified as onerous. The Group has not
identified any material provisions required for onerous
contracts after considering the clarified cost assessments.

• Amendments to IAS 16 Property, plant and equipment –

Proceeds before intended use (Effective 1 January
2022) Under the amendments, proceeds from selling items
before the related item of PP&E is available for use should
be recognised in profit or loss, together with the costs of
producing those items. IAS 2 Inventories should be applied
in identifying and measuring these production costs. The
Group has not sold any items of PP&E before they became
available for use and so this amendment has no impact on
the Group’s financial statements.

1 Accounting policies (continued)

■ Current versus non-current classification

■ New standards with no impact on the Group (continued)

• Amendments to IFRS 3 – Reference to the conceptual
framework (Effective 1 January 2022) The amendments
change references from the 1989 framework to the 2018
conceptual framework. In addition to this, the amendment
added clarified that IAS 37 provisions or IFRIC 21 are
applicable for identify liabilities assumed in business
combinations. The amendments also added disclosure
requirements for not recognising contingent assets
acquired on business combinations. The Group has
updated its disclosure in respect of business combinations
and there has not been any further impact on the Group’s
financial statements from these amendments.

New standards, interpretations and amendments not yet
effective

Future new standards and interpretations

A number of new standards and amendments to
standards and interpretations will be effective for future
years and, therefore, have not been applied in preparing
these consolidated Financial Statements. At the date of
authorisation of these Financial Statements, the following
standards and interpretations were in issue but have not been
applied in these Financial Statements as they were not yet
effective:

Standard or Interpretation

Periods commencing
on or after

IFRS 17 – Insurance contracts

1 January 2023

Amendments to IAS 1 and IFRS
Practice Statement 2 – Disclosure
of accounting policies

Amendments to IAS 8 – Definition
of accounting estimates

Amendments to IAS 12 – Deferred
tax related to assets and liabilities
arising from a single transaction

Amendments to IAS 1 Presentation
of financial statements – On
classification of liabilities

1 January 2023

IFRS 17 does not apply to the Group and therefore has no
impact on the Financial Statements of the Group in future
periods. Other than to expand certain disclosures within
the Financial Statements, the Directors do not expect the
adoption of the amendments to these other standards listed
above to have a material impact on the Financial Statements
of the Group in future periods.

The Group presents assets and liabilities in the consolidated
statement of financial position based on current/non-current
classification. An asset is current when it is:

• Expected to be realised or intended to be sold or

consumed in the normal operating cycle.

• Held primarily for the purpose of trading.

• Expected to be realised within twelve months after the

reporting date.

All other assets are classified as non-current.

Assets included in current assets are expected to be realised
within twelve months after the reporting date. Due to their
short-term nature, the carrying value of cash and cash
equivalents, trade and other receivables approximates their
fair value.

■ Basis of consolidation

Where the company has control over an investee, it is
classified as a subsidiary. The company controls an investee
if all three of the following elements are present: power over
the investee, exposure to variable returns from the investee,
and the ability of the investor to use its power to affect those
variable returns. Control is reassessed whenever facts and
circumstances indicate that there may be a change in any of
these elements of control.

The consolidated financial statements present the results
of the company and its subsidiaries (“the Group”) as if
they formed a single entity. Intercompany transactions and
balances between group companies are therefore eliminated
in full.

The consolidated financial statements incorporate the results
of business combinations using the acquisition method. In
the consolidate statement of financial position, the acquiree’s
identifiable assets, liabilities and contingent liabilities are
initially recognised at their fair values at the acquisition
date. The results of acquired operations are included in the
consolidated statement of comprehensive income from the
date on which control is obtained. They are deconsolidated
from the date on which control ceases.

Financial statements | Notes to the consolidated financial statements (continued)

for the year ended 31 December 2022

Gains and losses on disposal are determined by comparing
the proceeds with the carrying amount and are recognised
in the income statement. The Directors reassess the useful
economic life of the assets annually.

■ Goodwill

Goodwill represents the excess of a cost of a business
combination over the Group’s interest in the fair value of
identifiable assets under IFRS 3 Business Combinations.

Goodwill is capitalised as an intangible asset with
any impairment in carrying value being charged to the
consolidated statement of comprehensive income. Where
the fair value of identifiable assets, liabilities and contingent
liabilities exceed the fair value of consideration paid, the
excess is credited in full to the consolidated statement of
comprehensive income on the acquisition date.

■ Other intangible assets

Intangible assets other than goodwill acquired by the
Group comprise licences, the website software, acquired
technology, customer and member relationships, lender and
introducer relationships, and trademarks and brands and are
stated at cost less accumulated amortisation and impairment
losses. Amortisation is charged to the consolidated statement
of comprehensive income within administrative expenses on
a straight-line basis over the period of the licence agreements
or expected useful life of the asset and is charged once the
asset is in use.

Amortisation, which is reviewed annually, is provided on
intangible assets to write off the cost of each asset on a
straight-line basis over its expected useful life as follows:

Licences
Website
Software development
Acquired technology
Customer relationships
Trademarks and brands
Lender and introducer relationships
Member relationships

6 years
3 years
3 years
10 years
5 to 9 years
3, 10 and 11 years
14 years
3 years

1 Accounting policies (continued)

■ Associates

Where the Group has the power to participate in, but not
control the financial and operating policy decisions of another
entity, it is classified as an associate. Associates are initially
recognised in the consolidated statement of financial position
at cost. Subsequently, associates are accounted for using the
equity method, where the Group’s share of post-acquisition
profits and losses and other comprehensive income is
recognised in the consolidated statement of comprehensive
income (except for losses in excess of the Group’s
investment in the associate unless there is an obligation to
make good those losses).

Profits and losses arising on transactions between the
Group and its associates are recognised only to the extent of
unrelated investors’ interests in the associate. The investor’s
share in the associate’s profits and losses resulting from
these transactions is eliminated against the carrying value of
the associate.

Any premium paid for an associate above the fair value of
the Group’s share of the identifiable assets, liabilities and
contingent liabilities acquired is capitalised and included
in the carrying amount of the associate. Where there is
objective evidence that the investment in an associate has
been impaired the carrying amount of the investment is
tested for impairment. More information on the impairment of
associates is included in note 2.

■ Joint ventures

The Group accounts for its interests in joint ventures in the
same manner as investments in associates (i.e. using the
equity method).

Any premium paid for an investment in a joint venture above
the fair value of the Group’s share of the identifiable assets,
liabilities and contingent liabilities acquired is capitalised
and included in the carrying amount of the investment in
the joint venture. Where there is objective evidence that the
investment in a joint venture has been impaired the carrying
amount of the investment is tested for impairment in the
same way as other non-financial assets.

■ Property, plant and equipment

Items of property, plant and equipment are initially recognised
at cost. As well as the purchase price, cost includes directly
attributable costs.

Depreciation is provided on all items of property, plant and
equipment at rates calculated to write off the cost of each
asset on a straight-line basis over their expected useful lives,
as follows:

Freehold land
Freehold buildings
Fixtures and fittings
Computer equipment

not depreciated
36 years
5 years
3 years

receivable will not be collectable, the gross carrying value of
the asset is written off against the associated provision.

Impairment provisions for loans to associates and other
parties are recognised based on a forward-looking expected
credit loss model. The methodology used to determine the
amount of the provision is based on whether there has been
a significant increase in credit risk since initial recognition of
the financial asset. For those where the credit risk has not
increased significantly since initial recognition of the financial
asset, twelve month expected credit losses along with gross
interest income are recognised. For those for which credit
risk has increased significantly, lifetime expected credit
losses along with the gross interest income are recognised.
For those that are determined to be credit impaired, lifetime
expected credit losses along with interest income on a net
basis are recognised.

■ Cash and cash equivalents

Cash and cash equivalents include cash in hand and
deposits held at call with banks with an original maturity of
three months or less.

■ Investments in non-listed equity shares

Investments in non-listed shares are non-derivative financial
assets, and are carried at fair value, with gains and losses
arising from changes in fair value taken directly to the
consolidated statement of comprehensive income.

■ Derivative financial instruments

Derivative financial instruments comprise option contracts
to acquire additional ordinary share capital of associates
of the Group. Derivative financial assets are carried at fair
value, with gains and losses arising from changes in fair value
taken directly to the statement of comprehensive income.
Fair values of derivatives are determined using valuation
techniques, including option pricing models.

■ Financial liabilities

Trade and other payables are recognised initially at fair value
and subsequently carried at amortised cost.

■ Loans and other borrowings

Loans and other borrowings comprise the Group’s bank loans
including any bank overdrafts. Loans and other borrowings
are recognised initially at fair value net of any directly
attributable transaction costs. After initial recognition, Loans
and other borrowings are subsequently carried at amortised
cost using the effective interest calculation method.

1 Accounting policies (continued)

■ Impairment of non-financial assets

Impairment tests on goodwill and other intangible assets
with indefinite useful economic lives are undertaken annually
at the financial year end or whenever events or changes in
circumstances indicate that their carrying amount may not be
recoverable. Other intangible assets are tested for impairment
whenever events or changes in circumstances indicate that the
carrying amount may not be recoverable. Where the carrying
value of the asset exceeds its recoverable amount (i.e. the
higher of value in use and fair value less costs to sell), the
asset is written down accordingly.

Where it is not possible to estimate the recoverable amount of
an individual asset, the impairment test is carried out on the
smallest group of assets to which it belongs for which there
are separately identifiable cash flows, its cash generating units
(‘CGUs’). Goodwill is allocated on initial recognition to each
of the Group’s CGUs that are expected to benefit from the
synergies of the combination giving rise to the goodwill.

Impairment charges are included in profit or loss except to
the extent that they reverse gains previously recognised
in other comprehensive income. An impairment loss for
goodwill is not reversed.

■ Financial assets

In the consolidated statement of financial position, the
Group classifies its financial assets into one of the following
categories dependent on the purpose for which the financial
asset was acquired.

• Fair value through profit or loss

• Amortised cost

■ Loans and trade receivables

Loans and trade receivables are non-derivative financial
assets with fixed or determinable payments which arise
principally through the Group’s trading activities, and these
assets arise principally to collect contractual cash flows
and the contractual cash flows are solely payments of
principal and interest. They are initially recognised at fair
value plus transaction costs that are directly attributable to
their acquisition or issue, and are subsequently carried at
amortised cost using the effective interest rate method, less
provision for impairment.

Financial statements | Notes to the consolidated financial statements (continued)

for the year ended 31 December 2022

• where it does not have recent third-party financing, the

Group uses a build-up approach that starts with a risk-free
interest rate adjusted for credit risk for leases held by the
Group; and

• makes adjustments specific to the lease, e.g. term, country

and security.

Lease payments are allocated between principal and finance
cost. The finance cost is charged to profit or loss over the
lease period so as to produce a constant periodic rate of
interest on the remaining balance of the liability for each
period.

Right of use assets are measured at cost comprising the
following:

• the amount of the initial measurement of lease liability,

• any lease payments made at or before the commencement

date less any lease incentives received, and

• any initial direct costs.

Right of use assets are depreciated over the shorter of the
asset’s useful life and the lease term on a straight-line basis.
The Group does not revalue its land and buildings that are
presented within property, plant and equipment, and has
chosen not to do so for the right of use buildings held by the
Group.

Variable lease payments

The Group is exposed to potential future increases in variable
lease payments based on an index or rate, which are not
included in the lease liability until they take effect. When
adjustments to lease payments based on an index or rate
take effect, the lease liability is reassessed and adjusted
against the right of use asset.

Extension and termination options

Termination options are included in a number of the leases
across the Group. These are used to maximise operational
flexibility in terms of managing the assets used in the Group’s
operations. The majority of termination options held are
exercisable only by the Group and not by the respective
lessor.

In determining the lease term, management considers all
facts and circumstances that create an economic incentive
to exercise an extension option, or not exercise a termination
option. Extension options (or periods after termination
options) are only included in the lease term if the lease is
reasonably certain to be extended (or not terminated).

1 Accounting policies (continued)

■ Leases

The Group’s leasing activities and how they are accounted for

The Group leases a number of properties from which it
operates and office equipment. Rental contracts are typically
made for fixed periods of five to ten years, with break clauses
negotiated for some of the properties.

Contracts may contain both lease and non-lease
components. The Group allocates the consideration in the
contract to the lease and non-lease components based on
their relative stand-alone prices.

The Group adopted the modified transition approach
and from 1 January 2019, all leases are accounted for by
recognising a right of use asset and a corresponding liability
at the date at which the leased asset is available for use by
the Group, except for:

• leases of low value assets; and

• leases with a duration of 12 months or less

Payments associated with short-term leases and leases of
low value assets will continue to be recognised on a straight-
line basis as an expense in the statement of comprehensive
income. Low value assets within the Group comprise of IT
equipment.

Assets and liabilities arising from a lease are initially
measured on a present value basis. Lease liabilities include
the net present value of the following lease payments:

• fixed payments (including in-substance fixed payments),

less any lease incentives receivable;

• variable lease payments that are based on an index or a
rate, initially measured using the index or rate as at the
commencement date; and

• payments of penalties for terminating the lease, if the lease

term reflects the Group exercising that option.

Lease payments to be made under reasonably certain
extension options are also included in the measurement
of the liability. The lease payments are discounted using
the interest rate implicit in the lease. If that rate cannot be
readily determined, which is generally the case for leases in
the Group, the Group’s incremental borrowing rate is used,
being the rate that the Group would have to pay to borrow
the funds necessary to obtain an asset of similar value to
the right of use asset in a similar economic environment with
similar terms, security and conditions.

To determine the incremental borrowing rate, the Group:

• where possible, uses recent third-party financing received
by the individual lessee as a starting point, adjusted to
reflect changes in financing conditions since third party
financing was received;

1 Accounting policies (continued)

■ Leases (continued)

For leases of property, the following factors are normally the
most relevant:

• If there are significant penalties to terminate, the Group is

typically reasonably certain not to terminate.

• If any leasehold improvements are expected to have
a significant remaining value, the Group is typically
reasonably certain to not terminate.

• Otherwise, the Group considers other factors including
historical lease durations and the costs and business
disruption required to replace the leased asset. Most
extension options in offices have not been included in the
lease liability, because the Group could replace the assets
without significant cost or business disruption.

■ Business combinations and goodwill

Business combinations are accounted for using the
acquisition method. The cost of an acquisition is measured
as the aggregate of the consideration transferred, which
is measured at acquisition date fair value, and the amount
of any non-controlling interests in the acquiree. For each
business combination, the Group elects whether to measure
the non-controlling interests in the acquiree at fair value or
at the proportionate share of the acquiree’s identifiable net
assets. Acquisition-related costs are expensed as incurred
and included in administrative expenses.

When the Group acquires a business, it assesses the financial
assets and liabilities assumed for appropriate classification
and designation in accordance with the contractual terms,
economic circumstances and pertinent conditions as at the
acquisition date. This includes the separation of embedded
derivatives in host contracts by the acquiree.

Any contingent consideration to be transferred by the
acquirer will be recognised at fair value at the acquisition
date. Contingent consideration classified as equity is not
remeasured and its subsequent settlement is accounted
for within equity. Contingent consideration classified as a
liability that is a financial instrument and within the scope
of IFRS 9 Financial Instruments, is measured at fair value
with the changes in fair value recognised in the statement
of profit or loss in accordance with IFRS 9. Other contingent
consideration that is not within the scope of IFRS 9 is
measured at fair value at each reporting date with changes in
fair value recognised in profit or loss.

Goodwill is initially measured at cost (being the excess of the
aggregate of the consideration transferred and the amount
recognised for non-controlling interests and any previous
interest held over the net identifiable assets acquired and
liabilities assumed). If the fair value of the net assets acquired
is in excess of the aggregate consideration transferred, the
Group re-assesses whether it has correctly identified all of
the assets acquired and all of the liabilities assumed and
reviews the procedures used to measure the amounts to be
recognised at the acquisition date. If the reassessment still
results in an excess of the fair value of net assets acquired
over the aggregate consideration transferred, then the gain is
recognised in profit or loss.

After initial recognition, goodwill is measured at cost less
any accumulated impairment losses. For the purpose of
assessing impairment, assets are grouped at the lowest
levels for which there are separately identifiable cash inflows
which are largely independent of the cash inflows from other
assets or groups of assets (cash-generating units).

Where goodwill has been allocated to the Group’s
cash-generating units (CGUs) and part of the operation
within the unit is disposed of, the goodwill associated with
the disposed operation is included in the carrying amount of
the operation when determining the gain or loss on disposal.
Goodwill disposed in these circumstances is measured
based on the relative values of the disposed operation and
the portion of the cash generating unit retained.

If the business combination is achieved in stages, the
acquisition date carrying value of the acquirer’s previously
held equity interest in the acquiree is remeasured to fair
value at the subsequent acquisition date. Any gains or losses
arising from such remeasurement are recognised in profit or
loss.

Where a business combination is for less than the entire
issued share capital of the acquiree and there is an option for
the acquirer to purchase the remainder of the issued share
capital of the business and/or for the vendor to sell the rest of
the entire issued share capital of the business to the acquirer,
then the acquirer will assess whether a non-controlling
interest exists and also whether the instrument(s) fall
within the scope of IFRS 9 Financial Instruments and is/
are measured at fair value with the changes in fair value
recognised in the statement of profit or loss in accordance
with IFRS 9.

Options that are not within the scope of IFRS 9 and are
linked to service will be accounted for under IAS 19
Employee Benefits and/or IFRS 2 Share-based Payments as
appropriate.

IFRS 3 prohibits the recognition of contingent assets
acquired in a business combination. No contingent assets
are recognised by the Group in business combinations even
if it is virtually certain that they will become unconditional or
non-contingent.

Financial statements | Notes to the consolidated financial statements (continued)

for the year ended 31 December 2022

Other income is credited to the statement of comprehensive
income when received or guaranteed to be received.

■ Finance income

Finance income comprises interest receivable on cash at
bank and interest recognised on loans to associates and other
Appointed Representative firms. Interest income is recognised
in the statement of comprehensive income as it accrues.

■ Foreign exchange

Transactions entered into by Group entities in a currency
other than the currency of the primary economic environment
in which they operate (their “functional currency”) are
recorded at the rates ruling when the transactions occur.
Foreign currency monetary assets and liabilities are translated
at the rates ruling at the reporting date. Exchange differences
arising on the retranslation of unsettled monetary assets and
liabilities are recognised immediately in profit or loss.

Non-monetary items that are measured in terms of historical
cost in a foreign currency are translated using the exchange
rates at the dates of the initial transactions. Non-monetary
items measured at fair value in a foreign currency are
translated using the exchange rates at the date when the fair
value is determined. The gain or loss arising on translation of
non-monetary items measured at fair value is treated in line
with the recognition of the gain or loss on the change in fair
value of the item (i.e. translation differences on items whose
fair value gain or loss is recognised in OCI or profit or loss are
also recognised in OCI or profit or loss, respectively).

■ Taxation

Income tax comprises current and deferred tax. Income tax
is recognised in profit or loss other than if it relates to items
recognised in other comprehensive income in which case it is
recognised in other comprehensive income.

Current tax is the expected tax payable on the taxable income
for the year using tax rates enacted or substantively enacted
by the statement of financial position date and any adjustment
to tax payable in respect of previous years.

Deferred tax is provided using the liability method on
temporary differences between the tax bases of assets and
liabilities and their carrying amounts for financial reporting
purposes at the reporting date.

1 Accounting policies (continued)

■ Retirement benefits: Defined contribution schemes

Contributions to defined contribution pension schemes are
charged to the consolidated statement of comprehensive
income in the year to which they relate.

■ Provisions

A provision is recognised in the statement of financial
position when the Group has a present legal or constructive
obligation as a result of a past event, and it is probable that
an outflow of economic benefits will be required to settle the
obligation (see note 2c).

■ Share capital

Financial instruments issued by the Group are treated as
equity only to the extent that they do not meet the definition
of a financial liability. The Company’s ordinary shares are
classified as equity instruments. Incremental costs directly
attributable to the issue of new shares are shown in share
premium as a deduction from the proceeds.

■ Revenue

The Group recognises revenue from the following main sources:

• Mortgage procuration fees paid to the Group by lenders

either via the L&G Mortgage Club or directly

• Insurance commissions from advised sales of protection

and general insurance policies

• Client fees paid by the underlying customer for the
provision of advice on mortgages, other loans and
protection

• Other Income comprising income from services provided

to directly authorised entities, fees in relation to Later
Life lending and Wealth and ancillary services such as
conveyancing and surveying

Mortgage procuration fees, insurance commissions and client
fees are included at the gross amounts receivable by the
Group in respect of all services provided. The Group operates
a revenue share model with its trading partners and therefore
commissions are paid in line with the Group revenue
recognition policy and are included in cost of sales.

Mortgage procuration fees, insurance commissions and
client fees earned are accounted for when received or
guaranteed to be received, as until received it is not possible
to be certain that the transaction will be completed. When
mortgage procuration fees, insurance commissions and
client fees are received this confirms that the performance
obligation has been satisfied. In the case of life insurance
commissions there is a possibility for a four-year period after
the inception of the policy that part of the commission earned
may have to be repaid if the policy is cancelled during this
period. A clawback provision is made for the expected level
of commissions repayable. More information on the clawback
provision is included in note 2.

100

1 Accounting policies (continued)

■ Sales taxes

■ Taxation (continued)

Deferred tax assets and liabilities are recognised for all
taxable temporary differences, except for when:

Where sales tax is incurred on expenses and assets,
expenses and assets are recognised net of the amount of
sales tax, except:

• The difference arises from the initial recognition of goodwill
or an asset or liability in a transaction that is not a business
combination and, at the time of the transaction, affects
neither the accounting profit nor taxable profit or loss.

• In respect of deductible temporary differences associated
with investments in subsidiaries, associates and interests
in joint arrangements, deferred tax assets are recognised
only to the extent that it is probable that the temporary
differences will reverse in the foreseeable future and
taxable profit will be available against which the temporary
differences can be utilised.

The carrying amount of deferred tax assets is reviewed at
each reporting date and reduced to the extent that it is no
longer probable that enough taxable profit will be available
to allow all or part of the deferred tax asset to be utilised.
Unrecognised deferred tax assets are re-assessed at each
reporting date and are recognised to the extent that it has
become probable that future taxable profits will allow the
deferred tax asset to be recovered.

Deferred tax assets and liabilities are measured at the tax
rates that are expected to apply in the year when the asset is
realised or the liability is settled, based on tax rates (and tax
laws) that have been enacted or substantively enacted at the
reporting date.

Deferred tax relating to items recognised outside profit or loss
is recognised outside profit or loss. Deferred tax items are
recognised in correlation to the underlying transaction either
in OCI or directly in equity.

Tax benefits acquired as part of a business combination, but
not satisfying the criteria for separate recognition at that date,
are recognised subsequently if new information about facts
and circumstances change. The adjustment is either treated
as a reduction in goodwill (as long as it does not exceed
goodwill) if it was incurred during the measurement period or
recognised in profit or loss.

Deferred tax assets and liabilities are offset when the Group
has a legally enforceable right to offset current tax assets and
liabilities and the deferred tax assets and liabilities relate to
taxes levied by the same tax authority on either:

• the same taxable group company or;

• different company entities which intend either to settle

current tax assets and liabilities on a net basis, or to realise
the assets and settle the liabilities simultaneously, in each
future period in which significant amounts of deferred
tax assets and liabilities are expected to be settled or
recovered.

• When the sales tax incurred on a purchase of assets or

services is not recoverable from the taxation authority, in
which case, the sales tax is recognised as part of the cost
of acquisition of the asset or as part of the expense item,
as applicable.

• When receivables and payables are stated with the amount

of sales tax included.

The net amount of sales tax recoverable from, or payable to,
the taxation authority is included as part of receivables or
payables in the statement of financial position.

■ Segment reporting

An operating segment is a distinguishable segment of an
entity that engages in business activities from which it may
earn revenues and incur expenses and whose operating
results are reviewed regularly by the entity’s chief operating
decision maker (CODM). The Board reviews the Group’s
operations and financial position as a whole and therefore
considers that it has only one operating segment, being the
provision of financial services operating solely within the UK.
The information presented to the CODM directly reflects that
presented in the financial statements and they review the
performance of the Group by reference to the results of the
operating segment against budget.

Operating profit is the profit measure, as disclosed on the
face of the consolidated statement of comprehensive income
that is reviewed by the CODM.

■ Dividends

Dividends are recognised when they become legally payable.
In the case of interim dividends to equity shareholders, this
is when they are paid. In the case of final dividends, this is
when they are approved by the shareholders.

■ Share-based payments

Where equity-settled share options are awarded to
employees, the fair value of the options at the date of grant
is charged to the statement of comprehensive income over
the vesting period. Non-market vesting conditions are taken
into account by adjusting the number of equity instruments
expected to vest at each reporting date so that, ultimately,
the cumulative amount recognised over the vesting period
is based on the number of options that eventually vest.
Non-vesting conditions and market vesting conditions are
factored into the fair value of the options granted. As long as
all other vesting conditions are satisfied, a charge is made
irrespective of whether the market vesting conditions are
satisfied. The cumulative expense is not adjusted for failure
to achieve a market vesting condition or where a non-vesting
condition is not satisfied.

101

Financial statements | Notes to the consolidated financial statements (continued)

for the year ended 31 December 2022

1 Accounting policies (continued)

■ Share-based payments (continued)

Where the terms and conditions of options are modified
before they vest, the increase in the fair value of the options,
measured immediately before and after the modification, is
also charged to the statement of comprehensive income over
the remaining vesting period.

Where options are granted to persons other than employees,
the statement of comprehensive income is charged with
the fair value of the options at the date of the grant over the
vesting period.

2 Critical accounting estimates and judgements

The Group makes certain estimates and assumptions
regarding the future. Estimates and judgements are
continually evaluated based on historical experience and
other factors, including expectations of future events that
are believed to be reasonable under the circumstances. In
the future, actual experience may differ from these estimates
and assumptions. The Directors consider that the estimates
and judgements that have the most significant effect on the
carrying amounts of assets and liabilities within the financial
statements are set out below.

(a) Acquisitions and business combinations

When an acquisition arises, the Group is required under
UK-adopted International Accounting Standards to calculate
the Purchase Price Allocation (“PPA”). The PPA requires
companies to report the fair value of assets and liabilities
acquired and it establishes useful lives for identified assets.
The identification and the valuation of the assets and
liabilities acquired involves estimation and judgement when
determining whether the recognition criteria are met.

Subjectivity is also involved in the PPA with the estimation of the
future value of relationships, technology, brand and goodwill.
The fair value of separately identifiable intangible assets
acquired during the year was £55.4m (2021: £nil), with the key
assumptions used to calculate these fair values being those
around the estimated useful lives of the acquired introducer
relationships and technology, the estimated future cash flows
expected to arise from these relationships and technology and
the appropriate discount rate to be used to discount these cash
flows to their present value. Residual goodwill totalling £38.7m
(2021: £nil) has been accounted for during the year.

(b)

Fair value of put and call options in connection with
acquisitions

When the Group makes an acquisition of less than 100% of
the entire issued share capital of an entity, in certain cases it
has entered into a put and call option agreement to acquire
the remaining share capital of that entity after a certain
amount of time. The fair value of the put and call option
will need to be determined in accounting for the instrument
which involves certain estimates regarding the future financial
performance of the entity, including EBITDA or profit before
tax, as well as the use of an appropriate discount rate.

102

(c)

Impairment of intangible assets

For the purposes of impairment testing, acquired
relationships, technology, brands and goodwill are allocated
to the group of cash-generating units (“CGUs”) that are
expected to benefit from the business combination.

Value in use calculations are utilised to calculate recoverable
amounts of a CGU. Value in use is calculated as the net
present value of the projected pre-tax cash flows of the
CGU in which the relationships, technology and brand is
contained. The net present value of cash flows is calculated
by applying a pre-tax discount rate that reflects current
market assessments of the time value of money and the risks
specific to that asset.

The key assumptions used in respect of value in use
calculations are those regarding growth rates and anticipated
changes to revenues and expenses during the period covered
by the calculations. Changes to revenue and expenses
are based upon management’s expectation and actual
outcomes may vary. Forecast cash flows are derived from the
Group’s forecast model, extrapolated for future years, and
assume a terminal growth rate of 5.0% (2021: 5.0%), which
management considers reasonable given the Group’s historic
growth rates and its market share growth model.

The Group is required to test, on an annual basis, whether
goodwill has suffered any impairment. The recoverable
amount is determined based on value in use calculations.
The use of this method requires the estimation of future cash
flows and the choice of a discount rate in order to calculate
the present value of the cash flows. Actual outcomes may
vary. More information including carrying values is included in
note 14.

(d)

Impairment of trade and other receivables

Judgement is required when determining if there is any
impairment to the trade and other receivable balances, and
the Group uses the simplified approach for trade receivables
within IFRS 9 using the lifetime expected credit losses.
During this process judgements about the probability of the
non-payment of the trade receivables are made.

In considering impairment provisions for loans to associates
the forward-looking expected credit loss model is used. In
determining the lifetime expected credit losses for loans to
associates, the Group has had to consider different scenarios
for repayments of these loans and have also estimated
percentage probabilities assigned to each scenario for each
associate where applicable. More information is included in
note 19.

2 Critical accounting estimates and judgements
(continued)

(e) Clawback provision

The provision relates to the estimated value of repaying
commission received up front on protection policies that
may lapse in a period of up to four years following inception.
The provision is calculated using a model that has been
developed over several years. The model uses a number of
factors including the total unearned commission at the point
of calculation, the age profile of the commission received, the
Group’s proportion of any clawback, estimates of future lapse
rates, and the success of the Appointed Representatives in
preventing lapses and/or generating new income at the point
of a lapse.

The key uncertainties in the calculation are driven by lapse
rates and recovery rates. A 0.5% change (absolute) in lapse
rates causes a £0.4m change in the provision. A 2% change
(absolute) in the recoveries rate causes a £0.2m change in
the provision. More information is included in note 24.

(f)

Investments in associates

The Group is required to consider whether any investments in
associates have suffered any impairment.

The Group uses two methods to test for impairment,

• Net Present Value of the next 5 year’s projected free cash

flow and terminal value.

• Valuation of business on a multiple basis.

The use of both methods requires the estimation of future
cash flows, future profit before tax and choice of discount
rate. Actual outcomes may vary. Where the carrying amount
in the consolidated statement of financial position is in
excess of the estimated value, the Group will make an
impairment charge against the investment value and charge
this amount to the consolidated statement of comprehensive
income under impairment and amount written off associates.

The Group continues to make investments in associates, with
elements of deferred consideration in some cases, as well
as enter into commitments or option agreements to increase
its stake or fully acquire certain associates. In accounting for
these, the Group has had to make certain estimates on the
amounts of deferred consideration likely to be payable and
also the future performance and value of these businesses in
determining the fair value of the options.

(g)

Share options, employer’s National Insurance
Contributions and Deferred Tax

Under the Group’s equity-settled share-based remuneration
schemes (see note 31), estimates are made in assessing
the fair value of options granted. The fair value is spread
over the vesting period in accordance with IFRS 2. The
Group engages an external expert in assessing fair value,
both Black-Scholes and Stochastic models are used, and
estimates are made as to the Group’s expected dividend
yield and the expected volatility of the Group’s share price.

In addition, the Group estimates the employer’s National
Insurance Contributions that will fall due on exercise of
options and provides for this over the vesting period. In
doing so, estimates as to the share price at vesting and the
proportion of options from each grant that will vest are made
with reference to the Group’s prospects.

Deferred tax assets include temporary timing differences
related to the issue and exercise of share options.
Recognition of the deferred tax assets assigns an estimate
of the proportion of options likely to vest and an estimate of
share price at vesting. The carrying amount of deferred tax
assets relating to share options as at 31 December 2022 was
£1.0m (2021: £1.8m).

103

Financial statements | Notes to the consolidated financial statements (continued)

for the year ended 31 December 2022

3 Revenue

The Group operates in one segment being that of the provision of financial services in the UK. Revenue is derived as follows:

2022
£’000

106,615

82,095

36,257

5,853

2021
£’000

85,108

75,280

23,230

5,045

230,820

188,663

2022
£’000

142,769

8,000

102

601

16,401

167,873

2022
£’000

14,001

1,530

570

300

2021
£’000

129,639

–

(5)

–

8,063

137,697

2021
£’000

6,642

752

437

232

16,401

8,063

Mortgage procuration fees

Protection and general insurance commission

Client fees

Other income

4 Cost of sales

Costs of sales are as follows:

Commissions paid

Fluent affinity partner payments

Impairment of trade receivables

Other cost of sales

Wages and salary costs

Gross wages

Employers’ national insurance

Defined contribution pension costs

Other direct costs

104

Vita Financial Limited

On 12 July 2022 Mortgage Advice Bureau (Holdings) plc
increased its stake in Vita Financial Limited (“Vita”) from 49%
to 75% of the entire issued share capital.

Costs relating to the amortisation of acquired intangibles
amounted to £32,700 in the year ended 31 December 2022.
In addition to this, the Group incurred £14,400 of costs in
the year ended 31 December 2022 which related to the
acquisition of Vita Financial Limited.

Aux Group Limited

On 3 November 2022 Mortgage Advice Bureau (Holdings) plc
acquired 75% of the entire issued share capital of Aux Group
Limited (“Auxilium”).

Costs relating to the amortisation of acquired intangibles
amounted to £54,846 in the year ended 31 December 2022.
In addition to this, the Group incurred £130,063 of costs
in the year ended 31 December 2022 which related to the
acquisition of Aux Group Limited.

There is a put and call option over the remaining 25% of the
issued share capital of Auxilium has been accounted for under
IAS 32 and IFRS 2 Share-based Payments, as respectively a
proportion is treated as consideration under IAS 32, with the
balance treated as remuneration under IFRS- 2 because the
amount payable on exercise of the option consists of a non-
contingent element, and an element that is contingent upon
continued employment of the option holder within the Group.
In accordance with IFRS 2, a further £7,497 has been included
in the consolidated statement of comprehensive income (see
note 31).

5 Acquisition costs

First Mortgage Direct

On 2 July 2019 Mortgage Advice Bureau (Holdings) plc
acquired 80% of the entire issued share capital of First
Mortgage Direct Limited (“First Mortgage”).

Costs relating to the amortisation of acquired intangibles
amounted to £367,000 (2021: £367,000) in the year ended
31 December 2022. The option (comprising the put and the
call option) over the remaining 20% of the issued share capital
of First Mortgage has been accounted for under IAS 19
Employee Benefits and IFRS 2 Share-based Payments due to
its link to the service of First Mortgage’s Managing Director. In
accordance with IAS 19, £435,871 (2021: £424,606) has been
included within the consolidated statement of comprehensive
income within costs relating to Acquisition Options and,
in accordance with IFRS 2, a further £409,452 (2021:
£542,844) has been included in the consolidated statement
of comprehensive income within costs relating to Acquisition
Options (see note 31).

Project Finland Topco

On 28 March 2022 Mortgage Advice Bureau (Holdings) plc
acquired 75.4% of the entire issued share capital of Project
Finland Topco Limited which indirectly owns 100% of the
Fluent Money Group Limited (“Fluent”).

Costs relating to the amortisation of acquired intangibles
amounted to £2,127,643 in the year ended 31 December
2022. In addition to this, the Group incurred £2,610,156 of
costs in the year ended 31 December 2022 which related to
the acquisition of Project Finland Topco Limited.

There is a put and call option over the remaining 24.6%
of the issued share capital of Fluent has been accounted
for under IAS 32 and IFRS 2 Share-based Payments, as
respectively a proportion is treated as consideration under
IAS 32, with the balance treated as remuneration under
IFRS 2, because the amount payable on exercise of the
option consists of a non-contingent element, and an element
that is contingent upon continued employment of the option
holders within the Group. In accordance with IFRS 2, a further
£798,413 has been included in the consolidated statement of
comprehensive income (see note 31). The put and call option
over certain growth shares that have been issued to Fluent’s
wider management team has been accounted for under
IFRS 2 Share-based Payments as exercise is solely contingent
upon continued employment. In accordance with IFRS 2,
a further £347,903 has been included in the consolidated
statement of comprehensive income (see note 31).

105

Financial statements | Notes to the consolidated financial statements (continued)

for the year ended 31 December 2022

6 Operating profit

Operating profit is stated after the following items:

Depreciation of property, plant and equipment

Depreciation of right of use assets

Amortisation of acquired intangibles

Amortisation of other intangibles

Costs related to Acquisition Options

Costs related to acquisitions

Impairment and amounts written off non-listed equity investments

Impairment of loans to related parties

Gain on fair value measurement of deferred consideration

Gain on fair value measurement of non-listed equity investments

Loss/(gain) on fair value measurement of derivative financial instruments

Note

2022
£’000

591

563

2,582

284

1,999

2,755

2,783

–

(884)

–

Profits from associates are disclosed as part of the operating profit as this is the operational nature of the Group.

Auditor remuneration:

Fees payable to the Group’s auditor for the audit of the Group’s financial statements.

Fees payable to the Group’s auditor and its associates for other services:

Audit of the accounts of subsidiaries

Audit-related assurance services

2022
£’000

312

288

2021
£’000

385

383

367

191

967

–

(283)

(328)

2021
£’000

172

106

7 Staff costs

Staff costs, including executive and non-executive Directors’ remuneration, are as follows:

Wages and salaries

Share-based payments (see note 31)

Social security costs

Defined contribution pension costs

Other employee benefits

Staff costs are included in the consolidated statement of comprehensive income as follows:

Cost of sales (see note 4)

Administrative expenses

The average number of people employed by the Group during the year was:

Executive Directors

Advisers

Compliance

Sales and marketing

Operations

Total

2022
£’000

32,204

2,983

3,608

1,373

730

2021
£’000

20,564

1,932

2,242

1,454

542

40,898

26,734

2022
£’000

16,401

24,497

40,898

2021
£’000

8,063

18,671

26,734

2022
Number

2021
Number

216

106

367

790

103

171

445

107

Financial statements | Notes to the consolidated financial statements (continued)

for the year ended 31 December 2022

7 Staff costs (continued)

Key management compensation

Key management are those persons having authority and responsibility for planning, directing and controlling the activities of the
Group, which are the Directors of Mortgage Advice Bureau (Holdings) plc.

Wages and salaries

Share-based payments

Social security costs

Defined contribution pension costs

Other employment benefits

2022
£’000

2,047

441

280

2021
£’000

2,424

428

373

2,774

3,241

During the year retirement benefits were accruing to 2 Directors (2021: 2) in respect of defined contribution pension schemes.

The total amount payable to the highest paid Director in respect of emoluments was £858,176 (2021: £830,796). The value of the Group’s
contributions paid to a defined contribution pension scheme in respect of the highest paid Director amounted to £nil (2021: £nil).

8 Finance income and expense

Finance income

Interest income

Interest income accrued on loans to associates

Finance expense

Interest expense

Interest expense on lease liabilities

Unwinding of redemption liability

2022
£’000

102

108

2022
£’000

515

646

1,238

2021
£’000

102

–

160

During the year, interest accrued in previous years of £nil was paid (2021: £23,602).

The interest expense during the year mainly relates to a new term loan and revolving credit facility entered into during the year
(see note 22).

108

9 Income tax

Current tax expense

UK corporation tax charge on profit for the year

Total current tax

Deferred tax expense

Origination and reversal of timing differences

Temporary difference on share-based payments

Effect of changes in tax rates

Total deferred tax (see note 25)

Total tax expense

2022
£’000

4,184

291

128

(29)

390

2021
£’000

4,196

(33)

(342)

(286)

4,574

3,910

The reasons for the difference between the actual charge for the year and the standard rate of corporation tax in the United
Kingdom of 19% (2021: 19%) applied to profit for the year is as follows:

Profit for the year before tax

Expected tax charge based on corporation tax rate

Expenses not deductible for tax purposes amortisation and impairment

Research & Development

Tax on share options exercised

Other share option differences

Adjustment to deferred tax charge due to change in tax rate

Other differences

Fair value loss/(gain) on derivative financial instruments

Fair value gain on deferred consideration

Profits from associates

Amounts written off investments

Fixed asset differences

Short term timing differences at different tax rates

Chargeable gains

Utilisation of brought forward tax losses

Total tax expense

2022
£’000

17,353

3,297

618

(139)

(27)

652

(5)

(70)

(168)

(135)

529

(54)

(4)

–

4,574

2021
£’000

23,182

4,405

160

(439)

(119)

–

(62)

–

(192)

(9)

–

(1)

3,910

For the year ended 31 December 2022 the deferred tax credit relating to unexercised share options recognised in equity was
£783,556 (2021: £558,869 - charge). A charge of £16,568 (2021: £89,639) was recognised in deferred tax in equity as a result of
remeasurements arising from changes to UK corporation tax rates.

109

Financial statements | Notes to the consolidated financial statements (continued)

for the year ended 31 December 2022

10 Earnings per share

Basic earnings per share are calculated by dividing net profit for the year attributable to ordinary equity holders of the Company
by the weighted average number of ordinary shares outstanding during the year.

Basic earnings per share

Profit for the year attributable to the owners of the parent

Weighted average number of shares in issue

Basic earnings per share (in pence per share)

2022
£’000

12,237

2021
£’000

18,722

56,081,853

53,184,872

21.8p

35.2p

For diluted earnings per share, the weighted average number of ordinary shares in existence is adjusted to include potential
ordinary shares arising from share options.

Diluted earnings per share

Profit for the year attributable to the owners of the parent

Weighted average number of shares in issue

Diluted earnings per share (in pence per share)

The share data used in the basic and diluted earnings per share computations are as follows:

Weighted average number of ordinary shares

Issued ordinary shares at start of year

Effect of shares issued during year

Basic weighted average number of shares

Potential ordinary shares arising from options

Diluted weighted average number of shares

2022
£’000

12,237

2021
£’000

18,722

56,528,515

53,552,928

21.6p

35.0p

2022

2021

53,204,620

53,153,187

2,877,233

31,685

56,081,853

53,184,872

446,662

368,056

56,528,515

53,552,928

110

10 Earnings per share (continued)

The reconciliation between the basic and adjusted figures is as follows:

2022
£’000

2021
£’000

2022
Basic
earnings
per share
(pence)

2021
Basic
earnings
per share
(pence)

2022
Diluted
earnings
per share
(pence)

2021
Diluted
earnings
per share
(pence)

Profit for the year

12,237

18,722

21.8

35.2

21.6

35.0

Adjustments:

Amortisation of acquired
intangibles

Costs relating to the
First Mortgage, Fluent and
Auxilium options

2,582

367

1,715

967

Costs relating to Fluent and
Auxilium acquisitions

2,755

Gain on deferred consideration

(891)

–

(328)

(Gain)/loss on derivative
financial instruments

Amount written off non-listed
equity investment

Impairment of loans to
related parties

2,783

–

Unwinding of redemption liability

646

Profit on sale of assets

Tax effect of adjustments

(19)

(609)

–

(3)

Adjusted earnings

21,217

19,741

4.6

3.1

4.9

(1.6)

–

5.0

–

1.1

–

(1.1)

37.8

0.7

1.8

–

4.6

3.0

4.9

(1.6)

0.7

1.8

–

(0.6)

–

(0.6)

–

37.1

4.9

–

1.1

–

(1.1)

37.4

–

36.9

The Group uses adjusted results as key performance indicators, as the Directors believe that these provide a more consistent
measure of operating performance. Adjusted profit is therefore stated before one-off acquisition costs, ongoing non-cash items
relating to the acquisitions of First Mortgage, Fluent and Auxilium, fair value gains on financial instruments relating to options to
increase shareholding in Associate businesses and impairment of loans to related parties, net of tax.

111

Financial statements | Notes to the consolidated financial statements (continued)

for the year ended 31 December 2022

11 Dividends

Dividends paid and declared on ordinary shares during the year:

Final dividend for 2021: 14.7p per share (2020: 19.2p)

Interim dividend for 2022: 13.4p per share (2021: 13.4p)

Equity dividends on ordinary shares:

Proposed for approval by shareholders at the AGM:

Final dividend for 2022: 14.7p per share (2021: 14.7p)

2022
£’000

8,381

7,642

16,023

8,384

2021
£’000

10,210

7,129

17,339

7,821

The record date for the final dividend is 28 April 2023 and the payment date is 31 May 2023. The ex-dividend date will be
27 April 2023. The Company statement of changes in equity shows that the Company had positive reserves as at 31 December
2022 of £2,470,000. There are sufficient distributable reserves in subsidiary companies to pass up to Mortgage Advice Bureau
(Holdings) plc in order to pay the proposed final dividend. The proposed final dividend for 2022 has not been provided for in
these financial statements, as it has not yet been approved for payment by shareholders.

The final dividends paid and declared can differ from the proposed total dividends for approval due to (1) additional shares
issued after the publication of these accounts but before the record date and (2) the number of unallocated shares within the
Group’s Share Incentive Plan that do not receive a dividend.

112

12 Property, plant and equipment

Cost

As at 1 January 2022

Additions

Acquisition of subsidiaries

Disposals

Freehold
land and
building
£’000

2,536

–

As at 31 December 2022

2,536

Depreciation

As at 1 January 2022

Charge for the year

Eliminated on disposal

As at 31 December 2022

Net Book Value

349

–

407

Fixtures &
fittings
£’000

Computer
equipment
£’000

1,050

2,903

348

(620)

3,681

823

164

(583)

404

1,417

326

513

(741)

1,515

1,164

369

(740)

793

Total
£’000

5,003

3,229

861

(1,361)

7,732

2,336

591

(1,323)

1,604

As at 31 December 2022

2,129

3,277

722

6,128

Freehold
land and
building
£’000

Fixtures &
fittings
£’000

Computer
equipment
£’000

Cost

As at 1 January 2021

Additions

As at 31 December 2021

Depreciation

As at 1 January 2021

Charge for the year

As at 31 December 2021

Net Book Value

2,536

–

2,536

292

349

As at 31 December 2021

2,187

Office refurbishment

1,015

1,050

672

151

823

227

Total
£’000

4,798

205

5,003

1,951

385

2,336

1,247

170

1,417

987

177

1,164

253

2,667

During the year, the Group undertook a refurbishment project of its head office premises located in Derby costing £2.8m, which
is included within Fixtures and fittings. As a result of this project, the Group disposed of assets with an original cost of £1.4m
and a net book value of £0.04m for nil consideration.

113

Financial statements | Notes to the consolidated financial statements (continued)

for the year ended 31 December 2022

13 Right of use assets

Leases

This note provides information for leases where the Group is a lessee.

The consolidated statement of financial position shows the following amounts on leases:

Land and
Buildings
£’000

2,457

950

919

(546)

(33)

3,747

Land and
Buildings
£’000

2,596

919

874

(604)

(37)

3,822

Office
equipment
£’000

–

142

(17)

–

125

Office
equipment
£’000

–

142

(20)

–

125

Land and
Buildings
£’000

Office
equipment
£’000

2,590

250

(383)

2,457

–

Total
£’000

2,457

950

1,061

(563)

(33)

3,872

Total
£’000

2,596

919

1,016

(624)

(37)

3,947

Total
£’000

2,590

250

(383)

2,457

Right of use assets

As at 1 January 2022

Additions

Acquisition of subsidiary

Depreciation

Disposals

As at 31 December 2022

Lease liabilities

As at 1 January 2022

Additions

Acquisition of subsidiary

Interest expense

Lease payments

Disposals

As at 31 December 2022

Right of use assets

As at 1 January 2021

Additions

Depreciation

As at 31 December 2021

114

13 Right of use assets (continued)

Lease liabilities

As at 1 January 2021

Additions

Interest expense

Lease payments

As at 31 December 2021

The present value of the lease liabilities is as follows:

31 December 2022

Lease payments (undiscounted)

Finance charges

Net present values

31 December 2021

Lease payments (undiscounted)

Finance charges

Net present values

Leases

Land and
Buildings
£’000

Office
equipment
£’000

2,695

250

(407)

2,596

Within 1
year

1,048

(115)

933

Within 1
year

449

(55)

394

1-2
years

994

(83)

911

1-2
years

454

(46)

408

2-5
years

1,857

(94)

1,763

2-5
years

1,228

(83)

1,145

–

After 5
years

345

(5)

340

After 5
years

665

(16)

649

The consolidated statement of comprehensive income shows the following amounts relating to leases:

Depreciation charge of right of use assets

Interest expense

Short term lease expense

Low value lease expense

2022
£’000

563

Total
£’000

2,695

250

(407)

2,596

Total

4,244

(297)

3,947

Total

2,796

(200)

2,596

2021
£’000

383

The total cash flow for leases during the period was £665,543 (£2021: £409,275)

Variable lease payments

One property lease contains variable lease payments linked to current market rental from January 2023, August 2023 and
December 2024. A 1% fluctuation in market rent would impact total annual lease payments by approximately £16,000.

Extension and termination options

As at 31 December 2022, the carrying amounts of lease liabilities are not reduced by the amount of payments that would be avoided
from exercising a break clause because it was considered reasonably certain that the Group would not exercise its right to break the
lease. Total lease payments of £1.0m are potentially avoidable were the Group to exercise break clauses at the earliest opportunity.

115

Financial statements | Notes to the consolidated financial statements (continued)

for the year ended 31 December 2022

14 Intangible assets

Goodwill and identified intangible assets arising on acquisitions are allocated to the cash-generating unit of that acquisition. The
Board considers that the Group has only one operating segment and now has five cash-generating units (CGUs). The goodwill
relates to the following acquisitions:

• Talk Limited in 2012, and in particular its main operating subsidiary Mortgage Talk Limited (“Mortgage Talk”)
• First Mortgage Direct Limited (“First Mortgage”) in 2019
• Project Finland Topco Limited (“Fluent”) in 2022
• Vita Financial Limited (“Vita”) in 2022
• Auxilium Partnership Limited (Auxilium”) in 2022

Goodwill

Cost

As at 1 January

Acquisition of subsidiaries

As at 31 December

Accumulated impairment

As at 1 January and 31 December

Net book value

As at 31 December

2022
£’000

15,308

38,730

54,038

2021
£’000

15,308

–

15,308

(153)

53,885

15,155

Where the goodwill allocated to the CGU is significant in comparison with the entity’s total carrying amount of goodwill this is set
out below:

Goodwill

Cost

Mortgage
Talk
£’000

First
Mortgage
£’000

Fluent
£’000

Other1
£’000

As at 1 January 2022

4,267

11,041

Acquisition of subsidiary2

–

At 31 December 2022

4,267

11,041

–

36,974

–

1,757

Accumulated impairment

Total
£’000

15,308

38,730

54,038

As at 1 January and 31 December 2022

153

–

153

Net book value

At 31 December 2022

4,114

11,041

36,974

1,757

53,885

1 ‘Other’ comprises Vita and Auxilium.
2 Further details can be found in the business combinations note 18.

The goodwill is deemed to have an indefinite useful life. Under IAS 36, “Impairment of assets”, the Group is required to review
and test its goodwill for impairment annually or in the event of a significant change in circumstances. The impairment reviews
conducted at the end of 2022 concluded that there had been no impairment of goodwill.

116

14 Intangible assets (continued)

The key assumptions set out below and used in respect of value in use calculations are those regarding growth rates and
anticipated changes to revenues and costs during the period covered by the calculations, based upon management’s
expectations, with the discount rates reflecting current market assessments of the time value of money and the risks specific to
these assets, based on the Group’s WACC. Revenue growth is based on past performance and management’s expectation of
growth rates in the markets in which it operates, and forecast costs are based on management’s expectations of changes to the
current structure of each CGU. The terminal value growth rate of 5% reflects the Group’s market share growth model.

Goodwill arose on the acquisition of Mortgage Talk Limited and has since been allocated to the CGU of the Group as it existed
prior to the impact of the subsequent four acquisitions listed above. Impairment testing for this CGU is carried out by determining
recoverable amount on the basis of value in use, which is then compared to the carrying value of the assets of the CGU including
goodwill. The value in use that has been determined exceeds the £4.1m (2021: £4.1m) carrying value of goodwill for this CGU and
therefore no impairment of goodwill is required. Management has estimated future cash flows over a five-year period and applied
a discount rate of 11.3% (2021: 11.2%) and then applied a terminal value calculation, which assumes a growth rate of 5% (2021:
5%) in future cashflows, in order to estimate the present value of those cash flows in determining the value in use. Management
believes that any reasonably possible changes to any of the key assumptions applied in determining the value in use would not
cause the carrying amount of goodwill to exceed the present value of the estimated future cashflows.

Goodwill arose on the acquisition of First Mortgage and has since been allocated to this CGU of the Group. Impairment testing
for this CGU is carried out by determining recoverable amount on the basis of value in use, which is then compared to the
carrying value of the assets of the CGU including goodwill. The value in use that has been determined exceeds the £11.0m (2021:
£11.0m) carrying value of goodwill for this CGU and therefore no impairment of goodwill is required. Management has estimated
future cash flows over a five-year period and applied a discount rate of 20.7% (2021: 20.7%) and then applied a terminal value
calculation, which assumes a growth rate of 5% (2021: 5%) in future cashflows, in order to estimate the present value of those
cash flows in determining the value in use. Management believes that any reasonably possible changes to any of the key
assumptions applied in determining the value in use would not cause the carrying amount of goodwill to exceed the present value
of the estimated future cashflows.

Goodwill arose on the acquisition of Fluent and has since been allocated to this CGU of the Group. Impairment testing for this
CGU is carried out by determining recoverable amount on the basis of value in use, which is then compared to the carrying value
of the assets of the CGU including goodwill. The value in use that has been determined exceeds the £37.0m carrying value of
goodwill for this CGU and therefore no impairment of goodwill is required. Management has estimated future cash flows over a
six-year period and applied a discount rate of 22.4% and then applied a terminal value calculation, which assumes a growth rate
of 5% in future cashflows, in order to estimate the present value of those cash flows in determining the value in use. Management
believes that any reasonably possible changes to any of the key assumptions applied in determining the value in use would not
cause the carrying amount of goodwill to exceed the present value of the estimated future cashflows.

The sensitivity of the value in use for all acquisitions to changes in the key assumptions are as follows:

Assumption

Discount rate

Years 1-5 cash flows

Long-term growth rate

Base
assumption

Change in
assumption

Various

5.0%

+1.0%

-5.0%

-2.0%

Increase/
(decrease)
in value
in use,
£m

(28.0)

(30.7)

(36.1)

117

Financial statements | Notes to the consolidated financial statements (continued)

for the year ended 31 December 2022

14 Intangible assets (continued)

Other intangible assets

Licences
£’000

Cost

Website
£’000

Technology Customer Trademarks
and brands
£’000

/Software
£’000

contracts
£’000

As at 1 January 2022

108

Additions

Acquisition of subsidiaries

Disposals

–

140

–

571

534

16,824

–

357

–

1,980

1,470

Other
relationships
£’000

Total
£’000

–

4,269

615

–

3,619

34,568

55,368

–

As at 31 December 2022

108

223

17,929

2,337

5,089

34,568

60,254

Accumulated Amortisation

As at 1 January 2022

108

140

399

Charge for the year

Disposals

–

1,053

–

As at 31 December 2022

108

140

1,452

550

247

–

797

368

312

–

680

–

1,565

1,254

2,866

–

1,254

4,431

Net book value

As at 31 December 2022

–

16,477

1,540

4,409

33,314

55,823

Other intangible assets

Licences
£’000

Technology
/software
£’000

Website
£’000

Customer
contracts
£’000

Trademarks
and brands
£’000

Other
relationships
£’000

Cost

As at 1 January 2021

Additions

As at 31 December 2021

Accumulated Amortisation

As at 1 January 2021

Charge for the year

As at 31 December 2021

Net book value

108

–

108

–

108

140

–

140

–

140

571

1,980

1,470

–

571

1,980

1,470

208

191

399

330

220

550

221

147

368

–

Total
£’000

4,269

–

4,269

1,007

558

1,565

As at 31 December 2021

–

172

1,430

1,102

–

2,704

Technology/software includes software development and acquired technology assets. Other relationships include lender and
introducer relationships and member relationships assets.

118

15 Investments in associates and joint venture

The Group holds investments in associates and a joint venture, all of which are accounted for under the equity method, as follows:

Company name

CO2 Commercial Limited

Sort Group Limited

Buildstore Limited

Clear Mortgage Solutions Limited

Registered
office

Profile House, Stores Road,
Derby DE21 4BD

Percentage
of ordinary
shares held

Description

Property surveyors

Burdsall House, London Road,
Derby DE24 8UX

43.25

Conveyancing
services

NSB & RC Lydiard Fields,
Great Western Way, Swindon SN5 8UB

114 Centrum House, Dundas Street,
Edinburgh EH3 5DQ

Provision of

financial services

Provision of

financial services

MAB Broker Services PTY Limited

Level 7, 68 Alfred Street,
Milsons Point, NSW 2061

48.05

Provision of

financial services

Eagle and Lion Limited(1)

22 West Mall, Clifton, Bristol, BS8 4BQ

The Mortgage Broker Group Limited

Meridian Holdings Group Limited

Evolve FS Ltd

Heron Financial Limited

M & R FM Ltd(2)

The Granary, Crowhill Farm,
Ravensden Road, MK44 2QS

68 Pullman Road, Wigston,
Leicester, LE18 2DB

Unit 26-28 Brightwell Barns,
Waldringfield Road, Brightwell,
Ipswich, Suffolk, IP10 0BJ

Moor Park Golf Club, Moor Park,
Rickmansworth, Hertfordshire,
England, WD3 1QN

14 Kensington Terrace,
Gateshead, NE11 9SL

Provision of

financial services

Provision of

financial services

Provision of

financial services

Provision of
financial services

Insurance agent
and broker

Provision of
financial services

The reporting date for the Group’s associates, as listed in the table above, other than Clear Mortgage Solutions Limited, is
31 December and their country of incorporation is England and Wales. The reporting date for Clear Mortgage Solutions Limited is
30 December and its country of incorporation is England and Wales. The reporting date for the Group’s joint venture, MAB Broker
Services PTY Limited, is 30 June and its country of incorporation is Australia.

(1)

On 2 September 2021, Eagle and Lion Limited passed a special resolution to enter into voluntary liquidation. On 6 January 2023, Eagle and Lion Limited was
dissolved.

(2) 25% of the ordinary share capital of M & R FM Ltd is held by First Mortgage Direct Ltd.

119

Financial statements | Notes to the consolidated financial statements (continued)

for the year ended 31 December 2022

15 Investments in associates and joint venture (continued)

The investment in associates and the joint venture at the reporting date is as follows:

As at 1 January

Additions

Disposals

Credit/(charge) to the statement of comprehensive income:

Share of profit

Impairment and amount written off

Dividends received

As at 31 December

2022
£’000

12,433

–

(848)

712

–

712

(910)

11,387

2021
£’000

4,883

7,222

–

1,011

(408)

603

(275)

12,433

The Group is entitled to the results of its Associates in equal proportion to its equity stakes.

The carrying value of the Group’s joint venture, MAB Broker Services PTY Limited, as at 31 December 2022 is £nil (2021: £nil). In
the year ended 30 June 2022, MAB Broker Services PTY Limited reported a loss of AUD0.38m (2021: loss of AUD0.01m).

There were no additions during the year. 2021 additions included £5.0m of initial cash consideration and £2.2m of estimated
deferred consideration.

Acquisitions and disposals

2022
On 14 April 2022, Mortgage Advice Bureau Limited paid a further £277,600 in deferred consideration in respect of its acquisition
of a 49% stake in Heron Financial Limited in November 2021. A further estimated deferred consideration of £0.2m is payable
following finalisation of Heron’s audit for the year ending 31 December 2022.

On 27 April 2022, Mortgage Advice Bureau Limited paid a further £179,252 in deferred consideration in respect of its acquisition of
a further 29% interest in Vita Financial Limited in May 2021. No further deferred consideration is estimated to be payable following
finalisation of Vita’s audit for the year ending 31 December 2022.

On 21 July 2022, Mortgage Advice Bureau Limited paid a further £625,567 in deferred consideration in respect of its acquisition of
a 49% stake in Evolve FS Limited in July 2021.

On 12 July 2022, Mortgage Advice Bureau Limited acquired a further 26% of Vita Financial Limited having previously held 49%
of the share capital of Vita Financial Limited. As a result, the Group now exercises control over Vita Financial Limited and so the
investment is considered a subsidiary of the Group. The carrying value of the 49% holding in Vita Financial Limited was £848,022.
The fair value of the previously held equity interest was established to be £867,500, therefore a gain of £19,478 is recognised in
the consolidated statement of comprehensive income as this previously held interest is treated as though it has been disposed of.

On 15 July 2022, First Mortgage Direct Limited, an 80% owned subsidiary of the Group, paid a further £244,858 in deferred
consideration in respect of its acquisition of a 25% stake in M & R FM Limited in January 2021.

On 19 October 2022, Mortgage Advice Bureau Limited disposed of its 49% stake in Lifetime FS Limited for nil consideration.

120

15 Investments in associates and joint venture (continued)

Acquisitions and disposals (continued)

2021
On 12 January 2021, First Mortgage Direct Limited, an 80% owned subsidiary of the Group, acquired a 25% stake in M & R FM
Ltd, for an initial cash consideration of £663,400. Deferred consideration was payable following finalisation of M & R FM Ltd’s audit
for the year ended 31 December 2021 and this was estimated to be £0.2m at 31 December 2021.

On 13 January 2021, Mortgage Advice Bureau Limited ceased to have an investment in Freedom 365 Mortgage Solutions Limited,
having entered into a deed of termination.

Mortgage Advice Bureau Limited acquired a further 29% interest in Vita Financial Limited (“Vita”) on 28 May 2021 at an initial
cash consideration of £159,081. Deferred consideration was payable following the finalisation of Vita’s audits for the year
ended 31 December 2021 and 31 December 2022 respectively and this was estimated to be £0.2m and £0.2m respectively at
31 December 2021.

On 16 July 2021, as part of a shareholding restructure in Sort Group Limited, in which Sort Group Limited increased its stake
in Sort Limited to 100% (previously 75.68%), the Group disposed of its 10.52% shareholding in Sort Limited for £nil cash
consideration. The Mortgage Advice Bureau Limited now holds 43.25% of Sort Group Limited which is equal to the previous
effective interest prior to the shareholding restructure held through separate investments in Sort Group Limited, Sort Limited
and Sort Technology Limited. With no change in effective interest, the carrying value of the investment in Sort Limited has been
transferred to Sort Group Ltd.

Mortgage Advice Bureau Limited acquired a 49% stake in Evolve FS Ltd (“Evolve”) plus an option over a further 31% of the
ordinary share capital of Evolve on 20 July 2021 at an initial cash consideration of £2,316,290. Deferred consideration was payable
following finalisation of Evolve’s audit for the year ended 31 December 2021 and this was estimated to be £0.7m at 31 December
2021.

Mortgage Advice Bureau Limited acquired a 49% stake in Heron Financial Limited (“Heron”) plus an option over the remaining
ordinary share capital of Heron on 30 November 2021 at an initial cash consideration of £1,600,000. Deferred consideration
was payable following finalisation of Heron’s audit for the year ended 31 December 2021 and 31 December 2022 and this was
estimated to be £0.4m and £0.5m respectively at 31 December 2021.

On 30 September 2021, Mortgage Advice Bureau Limited paid a further £271,183 in deferred consideration in respect of its
acquisition of a further 24% interest in Clear Mortgage Solutions Limited in December 2020.

In accordance with IAS 28 the Group impaired further the value of the investment in The Mortgage Broker Group Limited by
£400,000 (2020: £472,850) due to its performance. The investment in The Mortgage Broker Group Limited is classified as Level 3
for the purposes of disclosure in the fair value hierarchy. The recoverable amount of the asset is its fair value less costs of disposal
and the market approach has been determined as the most appropriate method of estimating the fair value of this investment.

121

Financial statements | Notes to the consolidated financial statements (continued)

for the year ended 31 December 2022

15 Investments in associates and joint venture (continued)

Summarised financial information for associates

The tables below provide summarised financial information for those associates and joint ventures that are material to the Group.
The information disclosed reflects the amounts presented in the unaudited financial statements or management accounts of the
relevant associates and joint ventures and not the Group’s share of those amounts:

2022

Evolve FS
Ltd
£’000

Heron
Financial
Ltd
£’000

Meridian
Holdings
Group
ltd
£’000

1,927

1,700

166

(868)

(740)

Sort
Group
Limited
£’000

592

2,003

605

(1,134)

(93)

6,873

12,042

(78)

183

409

266

(150)

(161)

2,576

275

209

2,536

1,541

102

–

(44)

–

2,638

1,497

976

820

1,628

438

(130)

1,936

Pinnacle
Surveyors
(England
& Wales)
Limited
£’000

316

708

(569)

(49)

5,838

424

345

464

165

(348)*

281

Non-current assets

Cash balances

Current assets (excluding cash balances)

Current liabilities

Non-current liabilities and provisions

Revenue

Profit/(loss) before taxation

Total comprehensive income (PAT)

Carrying value of investments

As at 1 January 2022

Profit attributable to Group

Dividends received

As at 31 December 2022

502

356

(493)

(7)

4,792

(26)

3,143

(16)

(245)

2,882

122

Heron
Financial
Ltd
£’000

Meridian
Holdings
Group ltd
£’000

15 Investments in associates and joint venture (continued)

Summarised financial information for associates (continued)

2021

Non-current assets

Cash balances

Current assets (excluding cash balances)

Current liabilities

Non-current liabilities and provisions

Revenue

Profit before taxation

Total comprehensive income (PAT)

Carrying value of investments

As at 1 January 2021

Acquisition

Profit attributable to Group

Dividends received

Evolve
FS Ltd
£’000

1,433

206

(747)

–

259

351

122

(115)

(268)

5,395

2,822

857

691

–

2,992

151

–

602

505

–

2,536

–

Sort
Group
Limited
£’000

350

1,598

749

(1,129)

(236)

10,487

772

591

1,948

1,648

1,179

(1,496)

(878)

7,957

535

433

1,363

1,282

–

178

–

346

–

Pinnacle
Surveyors
(England
& Wales)
Limited
£’000

602

1,332

(751)

(300)

5,723

850

695

348

–

341

(225)*

464

As at 31 December 2021

3,143

2,536

1,541

1,628

These dividends are received from CO2 Commercial Limited, the parent undertaking of Pinnacle Surveyors (England & Wales) Limited. All other information
disclosed above relates to Pinnacle Surveyors (England & Wales) Limited.

123

Financial statements | Notes to the consolidated financial statements (continued)

for the year ended 31 December 2022

15 Investments in associates and joint venture (continued)

Individually immaterial associates and joint ventures

In addition to the interests in associates disclosed above, the group also has interests in a number of individually immaterial
associates and a joint venture that are accounted for using the equity method. The aggregate of the summarised financial
information for these associates is shown below, along with the summarised financial information for the joint venture. The
information disclosed reflects the amounts presented in the unaudited financial statements or management accounts of the
relevant associates and the joint venture and not the Group’s share of those amounts:

Non-current assets

Cash balances

Current assets (excluding cash balances)

Current liabilities

Non-current liabilities and provisions

Revenue

Profit/(loss) before taxation

Total comprehensive income (PAT)

Profit attributable to Group

Dividends received

2022
Associates
£’000

2021
Associates
£’000

2022
Joint Venture
£’000

2021
Joint Venture
£’000

413

3,287

1,561

(2,155)

(1,366)

439

2,832

1,718

(1,489)

(1,131)

14,470

15,147

424

146

188

711

513

(5)

1,167

(74)

(109)

486

(267)

(213)

–

384

1,018

(178)

(98)

478

(541)

–

All associates and joint venture prepare their financial statements in accordance with FRS 102 other than MAB Broker Services
PTY Limited who prepare their financial statements in accordance with the Australian Accounting Standards. There would be no
material difference to the profit attributable to the Group if the accounts of any of the associates were prepared in accordance with
IFRS.

Unrecognised losses

The Group has discontinued recognising its share of losses from its joint venture as these exceed the carrying amount of the
investment. The Group had unrecognised losses in the year of £75,948 (2021: £nil) and cumulative unrecognised losses of
£801,644 (2021: 725,696).

Derivative financial instruments

The fair value of the call option at 31 December 2022 for Evolve is £255,994 (2021: £124,055). The fair value of the call option and
put option at 31 December 2022 for Heron is £64,114 (2021: £95,455) and £10,280 (2021: £34,235) respectively.

The put and call option in respect of Meridian was not exercised during the year, consequently it has no value at 31 December
2022.

The fair values of the option contracts have been calculated using an option valuation model. The key assumptions used to value
the options in the model are the value of shares in the associate, the anticipated growth of the business, the option exercise price,
the expected life of the option, the expected share price volatility of similar businesses, forecast dividends and the risk-free interest
rate. The gains and losses relating to the derivative financial instruments is included within ‘operating profit’. These financial
instruments are categorised as Level 3 within the fair value hierarchy.

124

15 Investments in associates and joint venture (continued)

Deferred Consideration

The fair value of deferred consideration at 31 December 2022 was £nil (2021: £2.2m). During the year, £1.3m of deferred
consideration was paid (2021: £0.3m) and a gain of £0.9m (2021: £nil), resulting from the actual deferred consideration paid being
lower than the original amounts estimated, has been recognised in the consolidated statement of comprehensive income.

16 Investments in non-listed equity shares

As at 1 January

Additions

Revaluation

Write-off of investment

Disposals

As at 31 December

2022
£’000

2,783

–

(2,783)

–

2021
£’000

2,500

283

–

(75)

2,783

The investment at the start of the year represented a shareholding of 2.92% in PD Innovations Limited, trading as Boomin, at a
value of £2,783,000. This investment is classified as Level 3 for the purpose of disclosure in the fair value hierarchy, with any fair
value movements taken to the consolidated statement of comprehensive income. Boomin was put into liquidation in October
2022, having not been able to secure new investors in the challenging economic climate, which leads to a £2.8m non-cash write-
off of the investment. The Group originally paid cash consideration of £2.5m on 9 April 2021 for a 3.17% stake in PD Innovations
Limited.

On 23rd April 2021, the investment in Yourkeys Technology Ltd was sold for initial consideration of £329,000 with estimated
deferred consideration of £57,000. This resulted in a gain recognised in the consolidated statement of comprehensive income of
311,000.

During the year, deferred consideration of £115,000 was received relating to the sale of Yourkeys Technology Limited. This was
£58,000 higher than estimated, resulting in a gain recognised in the consolidated statement of comprehensive income.

125

Financial statements | Notes to the consolidated financial statements (continued)

for the year ended 31 December 2022

17 Subsidiaries

The subsidiaries of Mortgage Advice Bureau (Holdings) plc at the reporting date have been included in the consolidated financial
statements. The trading subsidiaries are as follows:

Company name

Country of
Incorporation

Mortgage Advice Bureau Limited

England and Wales

Mortgage Advice Bureau (Derby) Limited

England and Wales

Capital Protect Limited

England and Wales

Mortgage Talk Limited

MABWM Limited

First Mortgage Direct Limited

First Mortgage Limited

Property Law Centre Limited

Talk Limited

Mortgage Advice Bureau Australia
(Holdings) PTY Limited

England and Wales

Scotland

England and Wales

Australia

Percentage
of ordinary
shares held
(effective
holding)

100

Nature of business

Provision of financial services

Intermediate holding company

Mortgage Advice Bureau PTY Limited

Australia

100

Holding of intellectual property

Vita Financial Limited

BPR Protect Limited

AUX Group Limited

England and Wales

Auxilium Partnership Limited

England and Wales

Provision of financial services

Project Finland Topco Limited

England and Wales

75.4

Intermediate holding company

Project Finland Bidco Limited

England and Wales

75.4

Intermediate holding company

The Fluent Money Group Limited

England and Wales

75.4

Intermediate holding company

Fluent Mortgages Holdings Limited

England and Wales

75.4

Intermediate holding company

Fluent Mortgages Limited

England and Wales

Fluent Mortgages Horwich Limited

England and Wales

Fluent Lifetime Limited

England and Wales

Fluent Money Limited

Fluent Loans Limited

England and Wales

Fluent Bridging Limited

England and Wales

75.4

Provision of financial services

126

17 Subsidiaries (continued)

Mortgage Advice Bureau (Holdings) plc also holds a number of dormant subsidiaries which at the reporting date have been
included in the consolidated financial statements. The dormant subsidiaries are as follows:

Company name

Country of
Incorporation

Percentage
of ordinary
shares held

Mortgage Advice Bureau (UK) Limited

England and Wales

Mortgage Advice Bureau (Bristol) Limited

England and Wales

MAB (Derby) Limited

L&P 137 Limited

England and Wales

Mortgage Talk (Partnership) Limited

England and Wales

Financial Talk Limited

Survey Talk Limited

L&P 134 Limited

Loan Talk Limited

MAB1 Limited

England and Wales

MAB Private Finance Limited

England and Wales

MAB Financial Planning Limited

England and Wales

First Mortgage Shop Limited

First Mortgages Limited

Fresh Start Finance Limited

Scotland

100

Nature of
business

Dormant

The registered office for Vita Financial Limited and its subsidiary is 1st Floor Tudor House, 16 Cathedral Road, Cardiff CF11 9LJ.
The registered office of Mortgage Advice Bureau Australia (Holdings) PTY Limited and Mortgage Advice Bureau PTY Limited is
Norton Rose Fulbright, Level 18, 225 George Street, Sydney, NSW 2000, Australia. The registered office for First Mortgage Direct
Limited and its subsidiaries which are incorporated in Scotland is 30 Walker Street, Edinburgh, EH3 7HR. The registered office for
Project Finland Topco Limited and its subsidiaries is 102 Rivington House Chorley New Road, Horwich, Bolton, England, BL6 5UE.

The registered office for all other subsidiaries of Mortgage Advice Bureau (Holdings) plc is Capital House, Pride Place, Pride Park,
Derby, DE24 8QR, United Kingdom.

Mortgage Advice Bureau (Holdings) plc holds 100% of the ordinary share capital of Mortgage Advice Bureau Limited and Talk
Limited.

Mortgage Advice Bureau Australia (Holdings) PTY Limited has a 100% equity stake in Mortgage Advice Bureau PTY Limited and a
48.05% equity stake in MAB Broker Services PTY Limited.

127

Financial statements | Notes to the consolidated financial statements (continued)

for the year ended 31 December 2022

17 Subsidiaries (continued)

On 2 July 2019, Mortgage Advice Bureau Limited acquired 80% of the ordinary share capital of First Mortgage Direct Limited. First
Mortgage Direct Limited holds 100% of the ordinary share capital of First Mortgage Limited, Property Law Centre Limited, First
Mortgages Limited, First Mortgage Shop Limited, and Fresh Start Finance Limited.

On 12 July 2022 Mortgage Advice Bureau Limited acquired 75.4% of the ordinary share capital of Project Finland Topco Limited.
Project Finland Topco Limited holds 100% of the ordinary share capital of Project Finland Bidco Limited, which in turn holds 100%
of the ordinary share capital of The Fluent Money Group Limited. The Fluent Money Group Limited holds 100% of the issued
share capital of Fluent Mortgage Holdings Limited, Fluent Lifetime Limited, Fluent Money Limited, Fluent Loans Limited and Fluent
Bridging Limited. Fluent Mortgage Holdings Limited owns 100% of the ordinary share capital of Fluent Mortgages Limited and
Fluent Mortgages Horwich Limited.

On 12 July 2022 Mortgage Advice Bureau Limited increased its stake in Vita Financial Limited to 75%. Vita Financial Limited holds
100% of the ordinary share capital of BPR Protect Limited.

On 3 November 2022 Mortgage Advice Bureau Limited acquired 75% of the ordinary share capital of Aux Group Limited. Aux
Group Limited holds 100% of the ordinary share capital of Auxilium Partnership Limited.

Talk Limited holds 100% of the ordinary share capital of Mortgage Talk Limited, L&P 137 Limited, Mortgage Talk (Partnership)
Limited, Financial Talk Limited, and Survey Talk Limited.

Mortgage Talk Limited holds 100% of the ordinary share capital of Loan Talk Limited.

L&P 137 Limited holds 100% of the ordinary share capital of L&P 134 Limited.

Three of the Group’s subsidiaries, First Mortgage Limited (SC177681), Property Law Centre Limited (SC348791) and Fluent
Mortgages Horwich Limited (14127588) are exempt from the audit of individual accounts under section 479A of the Companies
Act 2006.

There are no restrictions regarding the utilisation of cash or other resources held by any subsidiary.

18 Business combinations

Project Finland Topco Limited

On 28 March 2022, Mortgage Advice Bureau Limited, a subsidiary of Mortgage Advice Bureau (Holdings) plc, entered into a
sale and purchase agreement to acquire 75.4% of the issued share capital of Project Finland Topco Limited (“Fluent”). Fluent is
a technology-enabled telephone advice mortgage and specialist lending intermediary that has developed an end-to-end digital
customer journey, across Mortgages (first charge mortgages), Secured Personal Loans (second charge mortgages), Later Life
lending and Bridging Finance. Fluent has formed relationships with a range of third-party brands, including aggregators and other
national lead sources operating across all of its product areas. The acquisition of Fluent is transformational for MAB’s national
lead generation strategy and should accelerate the Group’s growth and broaden revenue mix and customer proposition. The
transaction received approval from the Financial Conduct Authority (“FCA”) on 5 July 2022 and was completed on 12 July 2022.

The remaining 24.6% equity stake is subject to a put and call option. The call option provides MAB with the opportunity to acquire
the remaining equity after 5.5 years from the date of acquisition at a valuation based upon a multiple of 2027 Earnings Before
Interest, Tax, Depreciation, and Amortisation (“EBITDA”). As a result, the group controls Project Finland Topco Limited and its
subsidiary undertakings (together referred to as the “Project Finland Topco Limited Group”). On acquisition MAB also issued
Growth Shares to former founders and key management of the Fluent Group which are subject to put and call options. The total
consideration for the above put and call option and the put and call options over the growth shares is capped at c.£118m and will
be determined on the basis of future financial performance. MAB will, at its discretion, be able to satisfy up to 50% of the exercise
consideration for the above put and call options in ordinary shares and such shares will be subject to a 12-month orderly market
undertaking upon issue.

128

18 Business combinations (continued)

Project Finland Topco Limited (continued)

The cost of the acquisition comprised cash consideration of £49.8m. On the same date, the non-controlling interests in the Project
Finland Topco Limited group were acquired for consideration totalling £1.5m. The put and call option over the ordinary shares
has been measured at the present value redemption amount at £17.0m. An initial redemption liability valued at £6.4m relating to
the put and call option over the ordinary shares has been classified as accounting consideration under IAS 32 and recognised
as a deduction in parent equity. £0.6m has been included within finance expenses relating to the unwinding of the redemption
liability from the date of acquisition to the end of the year, giving a value for the redemption liability of £7.0m at the end of the year.
The remaining present value redemption amount of £10.6m is treated as remuneration and is accounted for as a share-based
payment arrangement under IFRS 2, with 50% treated as cash-settled and 50% treated as equity-settled. In accordance with
IFRS 2, £0.8m has been included as an expense relating to share-based payments (see note 31). The put and call option has
been accounted for respectively under IAS 32 and IFRS 2 Share-based Payments, as the redemption liability element is treated
as consideration under IAS 32, with the balance treated as remuneration under IFRS 2, because the amount payable on exercise
of the option consists of a non-contingent element, and an element that is contingent upon continued employment of the option
holders within the Group. The put and call options over the growth shares have been fair valued at £4.6m. The put and call options
over the growth shares are treated as remuneration and are accounted for as a share-based payment arrangement under IFRS 2
as exercise is solely contingent upon continued employment, with 50% treated as cash-settled and 50% treated as equity-settled.
In accordance with IFRS 2, £0.3m has been included as an expense relating to share-based payments (see note 31).

The results contributed by Project Finland Topco Limited and its subsidiary undertakings between the completion of the
acquisition date and 31 December 2022 are as follows:

Revenue

Profit after tax*

£’000

21,883

1,139

* This excludes £1.1m of acquisition option costs recognised under IFRS2 that arose as part of the acquisition.

If the acquisition had occurred on 1 January 2022, the consolidated pro-forma revenue and profit before tax for the year ended
31 December 2022 would have been £253.6m and £13.9 respectively. These amounts have been calculated using the subsidiary’s
results and adjusting them for

• differences in accounting policies between the Group and the subsidiary,

• the additional amortisation that would have been charged assuming the fair value adjustments to intangible assets had applied

from 1 January 2022,

• the additional IFRS 2 charges relating to the acquisition options costs, and

• costs linked to Private Equity ownership that would not have been incurred.

The goodwill arising on acquisition of £37.0m is reviewed annually for impairment.

129

Financial statements | Notes to the consolidated financial statements (continued)

for the year ended 31 December 2022

18 Business combinations (continued)

Project Finland Topco Limited (continued)

The business combination has been accounted for using the purchase method of accounting. At 12 July 2022 (“ date of
acquisition”), the assets and liabilities of the Project Finland Topco Limited Group were consolidated at their fair value to the
Group, as set out below:

Initial book
value
£’000

Fair value
adjustment
£’000

Fair value
at date of
acquisition
£’000

Intangible fixed assets

Right of use assets

Property, plant and equipment

Trade receivables

Other receivables

Prepayments and accrued income

Cash at bank

Total assets

Loans and other borrowings

Trade payables

Accruals

Lease liabilities

Provisions

Corporation tax

Deferred tax

Total liabilities

Net assets acquired

Non-controlling interests

Goodwill

Total Consideration

Satisfied by:

Cash

130

437

1,061

822

1,151

390

632

3,451

7,944

(23,391)

(1,127)

(3,972)

(1,016)

(460)

(30)

751

(29,245)

53,465

53,902

–

53,465

–

(13,212)

1,061

822

1,151

390

632

3,451

61,409

(23,391)

(1,127)

(3,972)

(1,016)

(460)

(41)

(12,461)

(42,427)

18,952

(4,657)

36,974

51,269

£’000

51,269

18 Business combinations (continued)

Project Finland Topco Limited (continued)

The goodwill is attributable to the value of the acquired workforce, deferred tax and economic goodwill which includes the
opportunity to grow both new and existing introducer and lender relationships.

After the acquisition, the subsidiary company Mortgage Advice Bureau Limited repaid loan notes and accrued interest on those
loan notes totalling £21.9m.

The acquisition was financed by:

Issue of share capital

Loans and other borrowings

Cash held within the Group

Cash used in:
Acquisition of 75.4% of the issued share capital of Project Finland Topco Limited

Acquisition of non-controlling interests in Fluent Mortgage Holdings Limited,
Fluent Lifetime Limited and Fluent Bridging Limited

Settlement of loan notes and accrued interest

Cashflow on Acquisition of Subsidiary undertaking:

Cash consideration

Cash at bank acquired

AUX Group Limited

£’000

38,423

25,300

9,437

73,160

49,765

1,504

51,269

21,891

73,160

£’000

51,269

(3,451)

47,818

On 3 November 2022, Mortgage Advice Bureau Limited, a subsidiary of Mortgage Advice Bureau (Holdings) plc, acquired 75% of
Aux Group Limited and its subsidiary undertaking (together referred to as the “Aux Group”). Aux Group is a specialist protection
service provider servicing directly authorised firms and the acquisition gives the Group the platform to extend its expertise in
protection across directly authorised firms.

The remaining 25% equity stake is subject to a put and call option. The call option provides Mortgage Advice Bureau Limited with
the opportunity to acquire the remaining equity within 7 years, but not before the accounts for the year ended 31 December 2026
are filed.

131

Financial statements | Notes to the consolidated financial statements (continued)

for the year ended 31 December 2022

18 Business combinations (continued)

AUX Group Limited (continued)

The cost of the acquisition comprised cash consideration of £2,106,515. The put and call option over the ordinary shares has
been valued at the present value redemption amount at £337,144. A redemption liability valued at £168,572 relating to the put and
call option over the ordinary shares has been classified as accounting consideration under IAS 32 and recognised as a deduction
in parent equity. The remaining present value redemption amount of £168,572 is treated as remuneration and is accounted for
as a cash-settled share-based payment arrangement under IFRS 2. In accordance with IFRS 2, £7,497 has been included as
an expense relating to share-based payments (see note 31). The put and call option has been accounted for respectively under
IAS 32 and IFRS 2 Share-based Payments, as the redemption liability element is treated as consideration under IAS 32, with
the balance treated as remuneration under IFRS 2, because the amount payable on exercise of the option consists of a non-
contingent element, and an element that is contingent upon continued employment of the option holder within the Group.

The results contributed by Aux Group Limited and its subsidiary undertakings between the acquisition date and the 31 December
2022 are as follows:

Revenue

Profit after tax

£’000

210

118

* This excludes £0.1m of acquisition option costs recognised under IFRS2 that arose as part of the acquisition

If the acquisition had occurred on 1 January 2022, the consolidated pro-forma revenue and profit before tax for the year ended
31 December 2022 would have been £231.5m and £17.6m respectively. These amounts have been calculated using the
subsidiary’s results and adjusting them for

• differences in accounting policies between the Group and the subsidiary,

• the additional amortisation that would have been charged assuming the fair value adjustments to intangible assets had

applied from 1 January 2022, and

• the additional IFRS 2 charges relating to the acquisition options costs.

The goodwill arising on acquisition of £1.0m is reviewed annually for impairment. The goodwill is attributable to the value of the
acquired workforce and deferred tax.

132

18 Business combinations (continued)

AUX Group Limited (continued)

The business combination has been accounted for using the purchase method of accounting. At 3 November 2022 (“date of
acquisition”), the assets and liabilities of the Aux Group were consolidated at their fair value to the Group, as set out below:

Initial book
value
£’000

Fair value
adjustment
£’000

Fair value
at date of
acquisition
£’000

Intangible fixed assets

Property, plant and equipment

Other receivables

Prepayments and accrued income

Cash at bank

Total assets

Accruals

Clawback provision

Corporation tax

Deferred tax

Total liabilities

Net assets acquired

Non-controlling interests

Goodwill

Total Consideration

Satisfied by:

Cash

Cashflow on Acquisition of Subsidiary undertaking:

Cash consideration

Cash at bank acquired

–

850

937

(21)

(143)

(84)

–

(248)

987

–

987

–

(237)

987

850

1,924

(21)

(143)

(84)

(237)

(485)

1,439

(360)

1,027

2,106

£’000

2,106

£’000

2,106

(850)

1,256

133

Financial statements | Notes to the consolidated financial statements (continued)

for the year ended 31 December 2022

18 Business combinations (continued)

Vita Financial Limited

On 12 July 2022, Mortgage Advice Bureau Limited, a subsidiary of Mortgage Advice Bureau (Holdings) plc, acquired 26% of Vita
Financial Limited (“Vita”) for a consideration of £460,306. Vita has performed exceptionally well in supporting MAB’s AR firms who
wish to outsource some of their protection or general insurance leads. As part of MAB’s wider protection strategy, the acquisition
will enable the Group to extend Vita’s proposition into a wider addressable market to fully leverage its expertise. Mortgage Advice
Bureau Limited had previously held 49% of share capital of Vita Financial Limited, of which the fair value at the date of acquisition
was £867,500.

The results contributed by Vita Financial Limited between the acquisition date and the 31 December 2022 are as follows:

Revenue

Profit after tax

£’000

1,114

If the acquisition had occurred on 1 January 2022, the consolidated pro-forma revenue and profit before tax for the year ended 31
December 2022 would have been £230.8m and £17.4m respectively. These amounts have been calculated using the subsidiary’s
results and adjusting them for

• differences in accounting policies between the Group and the subsidiary,

• the additional amortisation that would have been charged assuming the fair value adjustments to intangible assets had applied

from 1 January 2022, and

• Intercompany eliminations arising on consolidation.

The goodwill arising on acquisition of £0.7m is reviewed annually for impairment. The goodwill is attributable to the value of the
acquired workforce and deferred tax.

The business combination has been accounted for using the purchase method of accounting. At 12 July 2022 (“date of
acquisition”), the assets and liabilities of Vita Financial Limited were consolidated at their fair value, as set out below:

Intangible fixed assets

Property, plant and equipment

Trade receivables

Cash at bank

Total assets

Other payables

Corporation tax

Clawback provision

Deferred tax

Total liabilities

Net assets acquired

134

Initial book
value
£’000

Fair value
adjustment
£’000

Fair value
at date of
acquisition
£’000

–

453

377

866

(72)

(21)

(331)

(6)

(430)

479

–

479

453

377

479

1,345

–

(117)

(72)

(21)

(331)

(123)

(547)

798

18 Trade and other receivables (continued)

Vita Financial Limited (continued)

Non-controlling interests

Fair value of previously held equity interest

Goodwill

Total Consideration

Satisfied by:

Cash

Cashflow on Acquisition of Subsidiary undertaking:

Cash consideration

Cash at bank acquired

Reconciliation of net cash flow on acquisition of subsidiaries

Net cashflow on acquisition of Fluent

Net cashflow on acquisition of Auxilium

Net cashflow on acquisition of Vita

Initial book
value
£’000

Fair value
adjustment
£’000

Fair value
at date of
acquisition
£’000

(199)

(868)

729

460

£’000

460

£’000

460

(377)

£’000

47,818

1,256

49,157

135

Financial statements | Notes to the consolidated financial statements (continued)

for the year ended 31 December 2022

19 Trade and other receivables

Trade receivables

Less provision for impairment of trade receivables

Trade receivables - net

Receivables from related parties

Other receivables

Loans to related parties

Less provision for impairment of loans to related parties

Less amounts written off loans to related parties

Total non-derivative financial assets other than cash and cash equivalents
classified at amortised costs

Prepayments and accrued income

Corporation tax

Total trade and other receivables

Less: non-current portion - Loans to related parties

Less: non-current - Trade receivables

Current portion

Reconciliation of movement in trade receivables to cash flow

Movement per trade receivables

Corporation tax

Accrued interest movement

Accrued interest write off

Accrual of deferred consideration for Yourkeys disposal

Acquired trade and other receivables

Intercompany arising on acquisitions

Total movement per cash flow

2022
£’000

3,029

(476)

2,553

962

559

(2)

–

4,101

7,018

–

11,119

(305)

(526)

10,288

2022
£’000

3,679

–

(6)

–

(2,710)

299

1,317

2021
£’000

1,741

(374)

1,367

–

448

1,398

(2)

(628)

2,583

4,856

–

7,439

(541)

(557)

6,341

2021
£’000

1,030

499

(15)

(55)

–

1,475

The carrying value of trade and other receivables classified at amortised cost approximates fair value.

Included within trade receivables are operational business development loans to Appointed Representatives. The non-current
trade receivables balance is comprised of loans to Appointed Representatives.

136

19 Trade and other receivables (continued)

Also included in trade receivables are amounts due from Appointed Representatives relating to commissions that are refundable
to the Group when policy lapses or other reclaims exceed new business. As these balances have no credit terms, the Board of
Directors consider these to be past due if they are not received within seven days. In the management of these balances, the
Directors can recover them from subsequent new business entered into with the Appointed Representative or utilise payables that
are owed to the same counterparties and included within payables as the Group has the legally enforceable right of set off in such
circumstances. These payables are considered sufficient by the Directors to recover receivable balances should they default, and,
accordingly, credit risk in this respect is minimal.

In light of the above, the Directors do not consider that disclosure of an aging analysis of trade and other receivables would
provide useful additional information. Further information on the credit quality of financial assets is set out in note 23.

Impairment provisions for trade receivables are recognised based on the simplified approach within IFRS 9 using the lifetime
expected credit losses. During this process the probability of the non-payment of the trade receivables is assessed. This
probability is then multiplied by the amount of the expected loss arising from default to determine the lifetime expected
credit loss for the trade receivables. For trade receivables, which are reported net, such provisions are recorded in a separate
provision account with the loss being recognised within cost of sales in the consolidated statement of comprehensive income.
On confirmation that the trade receivable will not be collectable, the gross carrying value of the asset is written off against the
associated provision. As at 31 December 2022 the lifetime expected loss provision for trade receivables is £0.5m (2021: £0.4m).
The movement in the impairment allowance for trade receivables has been included in cost of sales in the consolidated statement
of comprehensive income.

Impairment provisions for loans to associates are recognised based on a forward-looking expected credit loss model. The
methodology used to determine the amount of the provision is based on whether there has been a significant increase in credit
risk since initial recognition of the financial asset. For those where the credit risk has not increased significantly since initial
recognition of the financial asset, twelve month expected credit losses along with gross interest income are recognised. For
those for which credit risk has increased significantly, lifetime expected credit losses along with the gross interest income are
recognised. For those that are determined to be credit impaired, lifetime expected credit losses along with interest income on a
net basis are recognised. In determining the lifetime expected credit losses for loans to associates, the Directors have considered
different scenarios for repayments of these loans and have applied percentage probabilities to each scenario for each associate
where applicable.

A summary of the movement in the provision for the impairment of receivables is as follows:

As at 1 January

New provisions for impairment losses

Increases in existing provisions for impairment losses

Impairment provisions no longer required

As at 31 December

2022
£’000

374

106

–

(4)

476

A summary of the movement in the provision for the impairment of loans to related parties is as follows:

As at 1 January

Increases in existing provisions for impairment losses

Impairment provisions no longer required

As at 31 December

2022
£’000

–

2021
£’000

379

(14)

374

2021
£’000

614

–

(612)

137

Financial statements | Notes to the consolidated financial statements (continued)

for the year ended 31 December 2022

19 Trade and other receivables (continued)

During the prior year, a principal loan balance of £0.6m was written off in respect of Eagle and Lion Limited which represents
the principal loan balance write-off and release of £0.6m of expected credit losses already recognised. The movement in the
impairment allowance for receivables for loans to associates has been included in impairment of loans to related parties in
the consolidated statement of comprehensive income in year ended 31 December 2021. As at 31 December 2022 the lifetime
expected loss provision for loans to associates is £0.0m (2021: £0.0m), with 12 month expected credit losses recognised for
remaining associates.

The maximum exposure to credit risk at the reporting date is the carrying value of each class of receivables mentioned above less
collateral held as security. Details of security held are given in note 23.

20 Cash and cash equivalents

Unrestricted cash and bank balances

Bank balances held in relation to retained commissions

Cash and cash equivalents

2022
£’000

7,219

18,243

25,462

2021
£’000

17,548

16,863

34,411

Bank balances held in relation to retained commissions earned on an indemnity basis from protection policies are held to cover
potential future lapses in Appointed Representatives commissions. Operationally the Group does not treat these balances as
available funds. An equal and opposite liability is shown within Trade and other payables (note 21).

21 Trade and other payables

Appointed Representatives retained commission

Other trade payables

Trade payables

Social security and other taxes

Other payables

Redemption liability (see note 18)

Deferred consideration (see note 15)

Accruals

Current

Non-current

2022
£’000

18,243

8,658

26,901

2,190

208

7,186

–

7,350

43,835

2022
£’000

34,397

9,438

43,835

2021
£’000

16,863

6,255

23,118

1,305

–

2,212

5,220

31,925

2021
£’000
Restated*

29,342

2,583

31,925

* In prior year, all trade and other payables were incorrectly presented as current. This resulted in an overstatement of current liabilities and an understatement of

non-current liabilities by £2.6m as at 31 December 2021 and by £1.2m as at 31 December 2020.

138

21 Trade and other payables (continued)

Should a protection policy be cancelled within four years of inception, a proportion of the original commission will be clawed
back by the insurance provider. The majority of any such repayment is payable by the Appointed Representative, with the Group
making its own provision for its share of any such repayment as set out in note 24. It is the Group’s policy to retain a proportion
of commission payable to the Appointed Representative to cover such potential future lapses; these sums remain a liability of the
Group. This commission is held in a separate ring-fenced bank account as described in note 20.

Redemption liabilities of £7.0m and £0.2m in respect of the put and call options relating to the Fluent and Auxilium acquisitions
respectively, as set out in note 18, have been included in other payables as at 31 December 2022.

As at 31 December 2022 and 31 December 2021, the carrying value of trade and other payables classified as financial liabilities
measured at amortised cost approximates fair value.

Reconciliation of movement in trade payables to cash flow

Movement per trade payables

Deferred consideration on associates

Fair value measurement of deferred consideration

Share–based payment accruals

Redemption liability

Acquired trade and other payables

Intercompany arising on acquisition

Total movement per cash flow

22 Loans and borrowings

Bank loans

Total loans and borrowings

Less: non-current portion – Bank loans

Current portion

A summary of the maturity of loans and borrowings is as follows:

Bank loans

Payable in 1 year

Payable in 1-2 years

Payable in 2-5 years

Total bank loans

2022
£’000

11,909

1,327

884

(656)

(7,186)

(5,192)

(253)

833

2022
£’000

23,407

(16,598)

6,809

2022
£’000

6,809

3,750

12,848

23,407

2021
£’000

8,263

(2,210)

–

6,053

2021
£’000

–

2021
£’000

–

139

Financial statements | Notes to the consolidated financial statements (continued)

for the year ended 31 December 2022

22 Loans and borrowings (continued)

In connection with the acquisition of Fluent, the Group entered into an agreement on 28 March 2022 with NatWest, in respect
of a new term loan for £20m and a revolving credit facility for £15m (the “Facilities Agreement”), in order to part fund the cash
consideration payable in relation to the acquisition. It is MAB’s intention to repay the drawn down proportion of the revolving
element of this debt facility as soon as practicable. In respect of the new facilities, the Group has given security to NatWest in the
form of fixed and floating charges over the assets of Mortgage Advice Bureau Limited, Mortgage Advice Bureau (Derby) Limited,
Mortgage Advice Bureau (Holdings) plc, First Mortgage Direct Limited, First Mortgage Limited, Project Finland Bidco Limited,
Fluent Money Limited and Fluent Mortgages Limited.

Loan covenants

Under the terms of the Facilities Agreement, the Group is required to comply with the following financial covenants:

•
Interest cover shall not be less than 5:1
• Adjusted leverage shall not exceed 2:1

The Group has complied with these covenants since the Facilities Agreement was entered into.

23 Financial instruments – risk management

The Group is exposed through its operations to the following financial risks:

• Credit risk
• Liquidity risk
•

Interest rate risk

In common with all other businesses, the Group is exposed to risks that arise from its use of financial instruments. This note
describes the Group’s objectives, policies and processes for managing those risks and the methods used to measure them.
Further quantitative information in respect of these risks is presented throughout these financial statements.

Principal financial instruments

Investments in non-listed equity shares

• Trade and other receivables
•
• Derivative financial instruments
• Cash and cash equivalents
• Trade and other payables

A summary of financial instruments held by category is provided below:

Financial assets

Cash and cash equivalents

Investments in non-listed equity shares (FVTPL)

Trade and other receivables (amortised cost)

Derivative financial instruments (FVTPL)

Total financial assets

2022
£’000

25,462

–

4,101

320

29,883

2021
£’000

34,411

2,783

2,583

362

40,139

140

23 Financial instruments – risk management (continued)

Principal financial instruments (continued)

Financial liabilities

Trade and other payables

Loans and borrowings

Deferred consideration

Accruals

Redemption liability

Lease liabilities

Derivative financial instruments

Total financial liabilities

2022
£’000

29,299

23,407

–

7,350

7,186

3,947

2021
£’000
Restated*

23,189

–

2,212

5,220

–

2,596

71,199

33,251

The disclosure of financial liabilities incorrectly included £1.3m of social security and other taxes, which are not financial instruments. The disclosure is therefore
restated to make this correction. The correction has no other impact on these financial statements.

General objectives, policies and processes

The Board has overall responsibility for the determination of the Group’s risk management objectives and policies, and designs
and operates processes that ensure the effective implementation of the objectives and policies to the Group’s finance function.
The Board sets guidelines to the finance team and monitors adherence to its guidelines on a monthly basis.

The overall objective of the Board is to set policies that seek to reduce risk as far as possible without unduly affecting the Group’s
competitiveness and flexibility. Further details regarding these policies are set out below.

Credit risk

Credit risk is the risk of financial loss to the Group if a trading partner or counterparty to a financial instrument fails to meet its
contractual obligations. The Group is mainly exposed to credit risk from loans to its trading partners. It is Group policy to assess
the credit risk of trading partners before advancing loans or other credit facilities. Assessment of credit risk utilises external credit
rating agencies. Personal guarantees are generally obtained from the Directors of its trading partners.

Quantitative disclosures of the credit risk exposure in relation to financial assets are set out below. Further disclosures regarding
trade and other receivables are given in note 19.

Financial assets - maximum exposure

Cash and cash equivalents

Trade and other receivables (Amortised cost)

Derivative financial instruments (FVTPL)

Total financial assets

2022
£’000

25,462

4,101

320

29,883

2021
£’000
Restated*

34,411

2,583

362

37,356

The disclosure of financial assets with exposure to credit risk incorrectly included investment in non-listed equity shares of £2.8m however these do not have
credit risk exposure. The disclosure is therefore restated to make this correction. The correction has no other impact on these financial statements.

141

Financial statements | Notes to the consolidated financial statements (continued)

for the year ended 31 December 2022

23 Financial instruments – risk management (continued)

The carrying amounts stated above represent the Group’s maximum exposure to credit risk for trade and other receivables. An
element of this risk is mitigated by collateral held by the Group for amounts due to them.

Trade receivables consist of a large number of unrelated trading partners and therefore credit risk is not concentrated. Due to the
large volume of trading partners the Group does not consider that there is any significant credit risk as a result of the impact of
external market factors on their trading partners. Additionally, within trade payables are amounts due to the same trading partners
that are included in trade receivables; this collateral of £716,680 (2021: £822,382) reduces the credit risk.

The Group’s credit risk on cash and cash equivalents is limited because the Group places funds on deposit with National
Westminster Bank plc (rated A+), The Royal Bank of Scotland plc (rated A+), Barclays plc (rated A), HSBC Bank plc (rated AA-) and
Bank of Scotland plc (rated A+).

Interest rate risks

The Group’s interest rate risk arises from cash on deposit. The Group aims to maximise its return on cash on deposit whilst
ensuring that cash is available to meet liabilities as they fall due. Current market deposit interest rates are minimal and therefore
any fall in these rates is unlikely to have a significant impact on the results of the Group.

Foreign exchange risk

As the Group does not operate outside of the United Kingdom and has only one investment outside the UK, it is not exposed to
any material foreign exchange risk.

Liquidity risk

Liquidity risk arises from the Group’s management of working capital. It is the risk that the Group will encounter difficulty in
meeting its financial obligations as they fall due.

The Group’s policy is to ensure that it will always have sufficient cash to allow it to meet its liabilities when they become due. The
Group’s trade and other payables are repayable within one year from the reporting date and the contractual undiscounted cash
flow analysis for the Group’s trade and other payables is the same as their carrying value. The contractual maturities of financial
liabilities are as follows:

31 December 2022
(£000)

Trade and other payables

Loans and borrowings

Accruals

Redemption liability

Lease liabilities

Derivative financial instruments

Appointed representative
retained commission

Total

Within 1
year

8,866

6,809

5,644

–

1,048

–

17,697

40,064

1 - 2
years

–

3,750

168

–

994

2 -5
years

–

12,848

1,538

169

1,857

–

440

4,952

16,852

After 5
years

–

7,017

345

–

7,438

Total

8,866

23,407

7,350

7,186

4,244

18,243

69,306

142

23 Financial instruments – risk management (continued)

31 December 2021
(£000) (Restated*)

Trade and other payables

Deferred consideration

Accruals

Lease liabilities

Derivative financial instruments

Appointed representative retained
commission

Total

Within 1
year

6,325

1,483

3,942

449

–

16,287

28,486

1 - 2
years

–

729

183

454

1,428

2 -5
years

–

1,095

1,228

–

478

2,801

After 5
years

–

665

–

735

Total

6,325

2,212

5,220

2,796

16,863

33,450

The disclosure incorrectly included £1.3m of social security and other taxes, which are not financial instruments, and Appointed Representatives retained
commission has been included in the maturity analysis as at 31 December 2022, with comparatives restated for 31 December 2021 as it was incorrectly excluded.
The disclosure is therefore restated to make this correction. The correction has no other impact on these financial statements.

Appointed representative retained commission does not have a definite maturity date and it is not possible to accurately estimate
the repayment profile, other than when Appointed Representative firms are in the initial term of their contract. The Directors
consider that the disclosed maturity profile is the most appropriate.

The Board receives annual 12-month cash flow projections based on working capital modelling as well as information regarding
cash balances monthly. At the end of the financial year, these projections indicated that the Group expected to have sufficient
liquid resources to meet its obligations under all reasonably expected circumstances. Additionally, the Group has financial
resource requirements set by its regulator, the Financial Conduct Authority. The Board has set a policy to ensure that adequate
capital is maintained to ensure that these externally set financial resource requirements are exceeded at all times. Quarterly reports
are made to the Financial Conduct Authority and submission is authorised by the Chief Financial Officer, at which time capital
adequacy is re-assessed.

Capital management

The Group monitors its capital which consists of all components of equity (i.e. share capital, share premium, capital redemption
reserve, share option reserve and retained earnings).

The Group’s objectives when maintaining capital are:

•

To safeguard the entity’s ability to continue as a going concern, so that it can continue to provide returns for
shareholders and benefits for other stakeholders,

To ensure that capital is maintained at all times to ensure that financial resource requirements set by its regulator, the
Financial Conduct Authority, are exceeded at all times, and

To ensure the Group has the cash available to develop the services provided by the Group to provide an adequate
return to shareholders.

143

Financial statements | Notes to the consolidated financial statements (continued)

for the year ended 31 December 2022

24 Provisions

Clawback provision

As at 1 January

Acquisition of subsidiary

Charged to the statement of comprehensive income

As at 31 December

2022
£’000

5,716

935

1,387

8,038

2021
£’000

4,576

–

1,140

5,716

The provision relates to refund liabilities for the estimated cost of repaying the Group’s share of commission income received
upfront on protection policies that may lapse in the four years following issue. Under the Group’s revenue contracts with protection
providers, if the policy is cancelled by the customer within a four-year period after the inception of the policy, then a proportion
of the commission received upfront has to be repaid to the protection provider. Provisions are held in the financial statements
of nine of the Group’s subsidiaries: Mortgage Advice Bureau Limited, Mortgage Advice Bureau (Derby) Limited, First Mortgage
Direct Limited, First Mortgage Limited, Fluent Mortgages Limited, Fluent Mortgages Horwich Limited, Vita Financial Limited, BPR
Protect Limited and Auxilium Partnership Limited. The exact timing of any future repayments (termed ‘clawbacks’) within the four-
year period is uncertain and the provision was based on the Directors’ best estimate, using industry data where available, of the
probability of clawbacks to be made.

25 Deferred tax

Deferred tax is calculated in full on temporary differences using tax rates of 19% and 25% depending on when the temporary
differences are expected to unwind (2021: 19% and 25%).

The movement in deferred tax is shown below:

Net deferred tax asset - opening balance

Acquisition of subsidiary

Recognised in the statement of comprehensive income

Deferred tax movement recognised in equity

2022
£’000

1,114

(12,820)

(389)

(767)

2021
£’000

179

–

286

649

Net deferred tax (liability)/asset - closing balance

(12,862)

1,114

The deferred tax balance is made up as follows:

2022
£’000

(14,659)

312

659

826

(12,862)

2021
£’000

(686)

108

–

1,692

1,114

Fixed asset differences

Other timing differences

Tax losses

Share-based payments

Net deferred tax (liability)/asset

144

25 Deferred tax (continued)

Reflected in the statement of financial position as follows:

Deferred tax liability

Deferred tax asset

Net deferred tax (liability)/asset

2022
£’000

(14,659)

1,797

(12,862)

2021
£’000

(757)

1,871

1,114

Deferred tax liabilities have arisen due to capital allowances which have been received ahead of the depreciation charged in the
accounts and the recognition of the fair value of acquired assets in business combinations.

26 Share capital

Issued and fully paid

Ordinary shares of 0.1p each

Total share capital

2022
£’000

2021
£’000

In connection with the acquisition of Fluent Money Group, the Group issued 3,809,524 new ordinary shares in an equity placing
on 28 March 2022 to raise £40.0m gross to part fund the consideration for the acquisition. The new ordinary shares were issued
at £10.50 per ordinary share. The share premium recognised was £38.4m after deduction of £1.6m of costs directly associated
with the equity placing. In addition, during the year 16,851 ordinary shares of 0.1p each were issued following partial exercise of
options issued in July 2019 at no premium. As at 31 December 2022, there were 57,030,995 ordinary shares of 0.1p in issue (2021:
53,204,620). See also note 31.

27 Reserves

The Group’s policy is to maintain an appropriate capital base and comply with its externally imposed capital requirements whilst
providing maximum shareholder value.

The following describes the nature and purpose of each reserve within equity:

Reserve

Share premium

Description and purpose

Amount subscribed for share capital in excess of nominal value.

Capital redemption reserve

The capital redemption reserve represents the cancellation of part of the original share
capital premium of the company at par value of any shares repurchased.

Share option reserve

Retained earnings

The fair value of equity instruments granted by the Company in respect of share-
based payment transactions and deferred tax recognised in equity.

All other net gains and losses and transactions with owners (e.g. dividends) not
recognised elsewhere.

There is no restriction on the distribution of retained earnings.

145

Financial statements | Notes to the consolidated financial statements (continued)

for the year ended 31 December 2022

28 Retirement benefits

The Group operates defined contribution pension schemes for the benefit of its employees and also makes contributions to a
self-invested personal pension (“SIPP”). The assets of the schemes and the SIPP are held separately from those of the Group
in independently administered funds. The pension cost charge represents contributions payable by the Group to the SIPP and
amounted to £1,373,209 (2021: £1,454,025). There were contributions payable to the SIPP as at 31 December 2022 of £238,987
(2021: £130,792).

29 Related party transactions

The following details provide the total amount of transactions that have been entered into with related parties during the
twelve months ended 31 December 2022 and 2021, as well as balances with related parties as at 31 December 2022 and
31 December 2021.

During the year the Group paid commission of £926,956 (2021: £906,073) to Buildstore Limited, an associated company.
At 31 December 2022 there was a balance of £13,559 (2021: £10,443) of retained commission to cover future lapses.

During the year the Group received introducer commission from Sort Limited, a subsidiary of an associated company of
£1,491,978 (2021: £1,159,360). At 31 December 2022, there was a net loan outstanding from Sort Group Limited of £218,369
(2021: £218,369).

During the year the Group paid commission of £4,549,994 (2021: £5,001,507) to Clear Mortgage Solutions Limited, an associated
company. At 31 December 2022 there was a balance of £652,466 (2021: £542,290) of retained commission to cover future lapses.

During the year the Group paid commission of £2,948,580 (2021: £nil) to Evolve FS Ltd, an associated company. At 31 December
2022 there was a balance of £75,766 (2021: £nil) of retained commission to cover future lapses.

During the year the Group paid commission of £4,459 (2021: £nil) to Heron Financial Limited, an associated company.
At 31 December 2022 there was a balance of £19 (2021: £nil) of retained commission to cover future lapses.

Vita Financial Limited was an associated company of the Group until it became a subsidiary on 12 July 2022, after which it was no
longer a related party. During the period in which it was a related party, the Group paid commission of £716,861 (2021: £1,309,270)
to the company. There was a balance at 31 December 2021 of £171,539 of retained commission to cover future lapses.

BPR Protect Limited was a subsidiary of an associated company of the Group until Vita Financial Limited became a subsidiary
on 12 July 2022, after which it was no longer a related party. During the period in which it was a related party, the Group paid
commission of £222,509 (2021: £521,314) to the company. There was a balance at 31 December 2021 of £82,409 of retained
commission to cover future lapses.

During the year the Group paid commission of £1,791,391 (2021: £1,634,833) to The Mortgage Broker Limited, an associated
company. At 31 December 2022 there was a balance of £66,858 (2021: £66,785) of retained commission to cover future lapses.
At 31 December 2022, there was a loan outstanding from The Mortgage Broker Limited of £19,556 (2021: £nil).

During the year the Group paid commission of £4,480,696 (2021: £3,990,911) to Meridian Holdings Group Ltd, an associated
company. At 31 December 2022 there was a balance of £546,203 (2021: £545,605) of retained commission to cover future lapses.
At 31 December 2022, there was a loan outstanding from Meridian Holdings Group Ltd of £319,414 (2021: £550,069).

During the year the Group paid commission of £2,826,184 (2021: £1,352,455) to M & R FM Ltd, an associated company.
At 31 December 2022 there was a balance of £107,094 (2021: £34,598) of retained commission to cover future lapses.
M & R FM Ltd purchased leads from First Mortgage at a total of £39,869 (2021: £18,606).

146

29 Related party transactions (continued)

During the year the Group received dividends from associated companies as follows:

CO2 Commercial Limited

Evolve FS Ltd

Sort Group Limited

M & R FM Ltd

Lifetime FS Limited

Total dividends received

30 Ultimate controlling party

There is no ultimate controlling party.

31 Share-based payments

Mortgage Advice Bureau Executive Share Option Plan

2022
£’000

348

245

130

187

–

910

2021
£’000

225

–

275

The Group operates two equity-settled share-based remuneration schemes for Executive Directors and certain senior
management, one being an approved scheme, the other unapproved, but with similar terms. Half of the options are subject
to a total shareholder return (TSR) performance condition and the remaining half are subject to an earnings per share (EPS)
performance condition. The outstanding options in the unapproved scheme vest and are exercisable as follows:

For options granted during 2018 and outstanding as at 1 January 2022:
• 100% based on performance to 31 March 2021, exercisable between 11 April 2021 and 9 April 2026.

For options granted during 2019 and outstanding as at 1 January 2022:
• 100% based on performance to 31 March 2022, exercisable between 1 July 2022 and 1 July 2027.

For options granted during 2020 and outstanding as at 1 January 2022:
• 100% based on performance to 31 March 2023, exercisable between 22 April 2023 and 21 July 2028.

For options granted during 2021 and outstanding as at 1 January 2022:
• 100% based on performance to 31 March 2024, exercisable between 1 April 2024 and 31 March 2029.

For options granted during the year:
• 100% based on performance to 31 March 2025, exercisable between 6 April 2025 and 6 June 2030.

The number and weighted average exercise prices (WAEP) of, and movements in, share options during the year for the Mortgage
Advice Bureau Executive Share Option Plan:

Outstanding as at 1 January

Granted during the year

Exercised

Lapsed *

Outstanding as at 31 December

* Due to not fully vesting, retirement or leaving the Group.

2022
WAEP
£

0.001

–

0.001

2022
Number

460,380

154,850

(16,851)

(22,376)

576,003

2021
WAEP
£

0.001

–

0.001

2021
Number

504,462

115,502

(51,433)

(108,151)

460,380

147

Financial statements | Notes to the consolidated financial statements (continued)

for the year ended 31 December 2022

31 Share based payments (continued)

Mortgage Advice Bureau Executive Share Option Plan (continued)

As at 31 December 2022, 576,003 options over ordinary shares of 0.1 pence each in the Company were exercisable with a
weighted average exercise price of £0.001.

On 6 June 2022, 154,850 options over ordinary shares of 0.1 pence each in the Company were granted to the Executive Directors
and senior executives of MAB under the equity-settled Mortgage Advice Bureau Executive Share Option Plan (the “Options”) with
a weighted average fair value of £7.07 per option. Exercise of the Options is subject to the service conditions and achievement
of performance conditions based on total shareholder return and earnings per share criteria. Subject to achievement of the
performance conditions, the Options will be exercisable 3 years from the date of grant. The exercise price for the Options is
0.1 pence, being the nominal cost of the Ordinary Shares.

Options exercised on 14 and 15 July 2022 resulted in respectively 12,357 and 1,498 ordinary shares being issued at an exercise
price of 0.1p per share. The price of the ordinary shares at the time of exercise was respectively £8.64 and £8.72 per share.

Options exercised on 30 September 2022 resulted in 1,498 ordinary shares being issued at an exercise price of 0.1p per share.
The price of the ordinary shares at the time of exercise was £6.22 per share.

Options exercised on 8 November 2022 resulted in 1,498 ordinary shares being issued at an exercise price of 0.1p per share.
The price of the ordinary shares at the time of exercise was £7.00 per share.

For the Options outstanding under the Mortgage Advice Bureau Executive Share Option Plan as at 31 December 2022, the
weighted average remaining contractual life is 5.9 years (2021: 6.3 years). This is now calculated on the basis of the final date that
the options can be exercised, whereas previously it was disclosed on the basis of the first date the options could be exercised, as
it is currently the more relevant figure.

The following information is relevant in the determination of the fair value of options granted during the year under the
equity-settled share-based remuneration scheme operated by the Group.

Equity-settled

Option pricing model – EPS

Option pricing model – TSR

Exercise price

Expected volatility

Expected dividend yield

Risk free interest rate

2022

2021

Black-Scholes

Stochastic

£0.001

41.66%

2.70%

1.78%

£0.001

39.41%

2.23%

0.18%

Expected volatility is a measure of an amount by which the share price is expected to fluctuate during a period . Dividends paid on
shares reduce the fair value of an award as a participant does not receive the dividend income on these shares .

The Options offer participants the opportunity to benefit from increasing per share value without risking the current per share price.
The risk-free rate used is the rate of interest obtainable from UK government securities as at the date of grant over the expected
term.

The options granted this year have vesting periods of 2 years and 10 months from the date of grant and the calculation of the
share-based payment is based on these vesting periods.

148

31 Share based payments (continued)

MAB AR Option Plan

The Group operates an equity-settled share plan, the AR Option Plan, to reward selected ARs of the Group. The AR Option Plan
provides for options which have a nominal exercise price of 0.01 pence per share (or, for any individual AR, not less than £1 on
each occasion of exercise) to acquire Ordinary Shares subject to performance conditions. Certain criteria must be met in order for
ARs to be eligible, including using the Mortgage Advice Bureau brand and being party to an AR Agreement which provides for an
initial contract term of at least five years at the date of grant. The AR Options will normally become exercisable following the fifth
anniversary of grant subject to the satisfaction of performance conditions based on financial and other targets, including quality of
consumer outcomes, compliance standards and continued use of the Mortgage Advice Bureau brand.

There were no options outstanding under the AR Option Plan at 1 January 2022 and there have been no grants of options during
the year.

Share-based remuneration expense

The share-based remuneration costs for the year are made up as follows:

Charge for equity settled schemes

National Insurance on equity settled schemes

Share incentive plan costs

Free shares awarded to employees

Acquisition option costs

Total costs

2022
£’000

763

324

147

186

1,563

2,983

2021
£’000

667

393

107

222

543

1,932

Options exercised during the period resulted in a transfer from the Share option reserve to Retained earnings of £71,574 (2021:
£143,000) reflected in the consolidated statement of changes in equity .

149

Financial statements | Notes to the consolidated financial statements (continued)

for the year ended 31 December 2022

32 Non-controlling interests (NCI)

Accounting policy choice for non-controlling interests

The Group recognises non-controlling interests in an acquired entity either at fair value or at the non-controlling interest’s
proportionate share of the acquired entity’s net identifiable assets. This decision is made on an acquisition-by-acquisition basis.
For the non-controlling interests in First Mortgage Direct Limited, Project Finland Topco Limited, Vita Financial Limited and
Aux Group Limited, the Group elected to recognise the non-controlling interests at its proportionate share of the acquired net
identifiable assets. See note 1 for the Group’s accounting policies for business combinations.

Set out below is summarised financial information for each subsidiary that has a non-controlling interest that is material to the
Group. The amounts disclosed for each subsidiary are their consolidated financial information before inter-company eliminations
with Mortgage Advice Bureau Limited.

2022
Summarised balance sheet

Current assets

Current liabilities

Current net assets/(liabilities)

Non-current assets

Non-current liabilities

Non-current net assets/(liabilities)

Net assets/(liabilities)

Accumulated NCI

Summarised statement of comprehensive income

Revenue

Profit/(loss) for the period and total comprehensive income

Profit/(loss) allocated to NCI

Dividends paid to NCI

Summarised cash flows

Cash flows from operating activities

Cash flows from investing activities

Cash flows from financing activities

Net increase in cash & cash equivalents

150

First Mortgage
Direct Limited
2022
£’000

Project Finland
Topco Limited
(“Fluent”)
2022
£’000

12,443

(2,788)

9,655

3,213

(4,263)

(1,050)

8,605

2,297

£’000

18,220

2,534

507

415

£’000

6,201

(730)

(1,659)

3,811

3,721

(26,950)

(23,229)

19,094

(1,209)

17,885

(5,344)

4,654

£’000

21,883

(8)

(2)

–

£’000

1,261

(1,319)

(1,725)

(1,783)

Total
2022
£’000

16,164

(29,738)

(13,574)

22,307

(5,472)

16,835

3,261

6,951

£’000

40,103

2,526

505

415

£’000

7,462

(2,049)

(3,384)

2,028

32 Non-controlling interests (NCI) (continued)

2021
Summarised balance sheet

Current assets

Current liabilities

Current net assets

Non-current assets

Non-current liabilities

Non-current net liabilities

Net assets

Accumulated NCI

Summarised statement of comprehensive income

Revenue

Profit for the period and total comprehensive income

Profit allocated to NCI

Dividends paid to NCI

Summarised cash flows

Cash flows from operating activities

Cash flows from investing activities

Cash flows from financing activities

Net increase in cash & cash equivalents

First Mortgage
Direct Limited
2021
£’000

11,198

(2,428)

8,770

3,447

(4,093)

(646)

8,124

2,205

£’000

16,587

2,752

550

253

£’000

6,200

(730)

(1,659)

3,811

33 Contingent liabilities

The Group had no contingent liabilities as at 31 December 2022 or 31 December 2021.

34 Events after the reporting date

There were no material events after the reporting period, which have a bearing on the understanding of these consolidated
financial statements.

Total
2021
£’000

11,198

(2,428)

8,770

3,447

(4,093)

(646)

8,124

2,205

£’000

16,587

2,752

550

253

£’000

6,200

(730)

(1,659)

3,811

151

Financial statements | Notes to the consolidated financial statements (continued)

for the year ended 31 December 2022

35 Notes supporting statement of cash flows

Cash and cash equivalents for purposes of the statement of cash flows comprises:

Cash at bank available on demand

Bank balances held in relation to retained commissions

Total cash and cash equivalents

A reconciliation of liabilities from financing transactions is set out as follows:

Balance as at 1 January 2021

Cash flows

Principal lease payments

Non-cash flows

New leases

Balance as at 31 December 2021 and 1 January 2022

Cash flows

Principal loan amounts

Loan arrangement fees

Settlement of loan notes and accrued interest on acquisition

Repayment of borrowings

Principal lease payments

Non-cash flows

Acquisition of subsidiaries

New leases

Accrued interest

Unwinding of loan arrangement fees

Disposals

Balance as at 31 December 2022

Loans and
borrowings
£’000

–

23,200

(282)

(21,891)

(1,500)

–

23,391

–

426

–

23,407

2022
£’000

7,219

18,243

25,462

Leases
£’000

2,695

2021
£’000

17,548

16,863

34,411

Total
£’000

2,695

(349)

250

2,596

–

(547)

1,016

919

–

(37)

3,947

250

2,596

23,200

(282)

(21,891)

(1,500)

(547)

24,407

919

426

(37)

27,354

152

Financial statements | Company statement of financial position

as at 31 December 2022

The following parent entity financial statements are prepared under FRS 102 and relate to the Company and not to the Group. The
statement of accounting policies which have been applied to these accounts can be found on page 155.

The Company is a non-trading holding company and has no employees. As permitted by section 408 of the Companies Act
2006 the Company has elected not to present its own profit and loss account for the year. The Company reported a profit for the
financial year of £16,023,000 (2021: £17,339,000).

Fixed assets

Investments

Current assets

Debtors

Net assets

Capital and reserves

Called up share capital

Share premium account

Capital redemption reserve

Retained earnings

Note

2022
£’000

2021
£’000

5,361

4,297

45,341

50,702

48,155

2,470

50,702

6,960

11,257

9,778

1,406

11,257

The notes on pages 155 to 159 form part of these financial statements.

The financial statements were approved by the board of Directors on 27 March 2023

P Brodnicki

Director

L Tilley

Director

153

Retained
earnings
£’000

856

17,339

–

550

(17,339)

(16,789)

1,406

16,023

–

1,064

Total
Equity
£’000

10,707

17,339

–

550

(17,339)

(16,789)

11,257

16,023

38,381

1,064

(16,023)

–

2,470

–

50,702

Financial statements | Company statement of changes in equity

for the year ended 31 December 2022

Share
capital
£’000

Share
premium
£’000

Capital
redemption
reserve
£’000

Balance as at 1 January 2021

9,778

Profit for the year

Total comprehensive income

Transactions with owners

Issue of shares

Share-based payments

Dividends paid

Transactions with owners

Balance as at 31 December 2021
and 1 January 2022

Profit for the year

Total comprehensive income

Transactions with owners

Issue of shares

Share-based payments

Dividends paid

Transactions with owners

–

9,778

–

38,377

–

38,377

48,155

–

As at 31 December 2022

154

Financial statements | Notes to the Company statement of

financial position
as at 31 December 2022

1 Accounting policies

■ Basis of preparation

The separate financial statements of the Company are presented as required by the Companies Act 2006 and have been prepared
under the historical cost convention and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard
applicable in the United Kingdom and the Republic of Ireland. The FRS 102 reduced disclosure framework has been applied and
the Company meets the definition of a qualifying entity. The principal accounting policies are summarised below. They have all
been consistently applied to all years presented.

The preparation of financial statements in accordance with FRS 102 requires the use of certain critical accounting estimates.
It also requires management to exercise judgement in applying the company’s accounting policies. Given the nature of the
Company’s business there are no critical accounting estimates or areas of judgement required in the preparation of the financial
statements.

■ Cash flow statement

The cash flows of the Company are included in the consolidated cash flow statement of Mortgage Advice Bureau (Holdings) plc
which is included in this annual report . Consequently, the Company is exempt under the terms of FRS 102 from publishing a cash
flow statement .

■ Going concern

After making enquiries, the Directors have a reasonable expectation that the Company has adequate resources to continue in
operational existence for the foreseeable future . For this reason, they continue to adopt the going concern basis in the accounts .

■ Investments

Investments in subsidiaries are held at historical cost less provision for impairment . The carrying values of investments are
reviewed for impairment when events or changes in circumstances indicate the carrying value may not be recoverable . Where the
Company will settle a share-based payment transaction in respect of future consideration payable by a subsidiary for the purchase
of a minority stake relating to an acquisition the cost of the share-based payment is capitalised .

■ Share capital

Financial instruments issued by the Company are treated as equity only to the extent that they do not meet the definition of a
financial liability. The Company’s ordinary shares are classified as equity instruments. Incremental costs directly attributable to the
issue of new shares are shown in share premium as a deduction from proceeds.

■ Dividends

Dividends are recognised when they become legally payable. In the case of interim dividends to equity shareholders, this is when
they are paid. In the case of final dividends, this is when they are approved by the shareholders.

■ Financial Instruments

The Company makes little use of financial instruments other than intercompany balances and so its exposure to credit risk
and cash flow risk is not material for the assessment of the assets, liabilities, financial position, and profit of the Company. The
Directors consider that there is no credit risk on intercompany balances.

155

Financial statements | Notes to the Company statement of

financial position (continued)
as at 31 December 2022

2 Profit for the year

During the year the Company’s only income was dividends receivable from its subsidiaries. The auditor’s remuneration for audit
and other services is disclosed in note 6 to the consolidated financial statements for the Group. Remuneration for the audit of the
Company financial statements is borne by a subsidiary entity.

3 Investments

Cost

As at 1 January 2022

Additions

As at 31 December 2022

Net book value

As at 31 December 2022

As at 31 December 2021

Subsidiary
undertakings
£’000

4,297

1,064

5,361

4,297

The subsidiaries of Mortgage Advice Bureau (Holdings) plc at the reporting date have been included in the consolidated financial
statements. The trading subsidiaries are as follows:

Company name

Country of
Incorporation

Percentage
of ordinary
shares held

Mortgage Advice Bureau Limited

England and Wales

Mortgage Advice Bureau (Derby) Limited

England and Wales

Capital Protect Limited

England and Wales

Mortgage Talk Limited

MABWM Limited

First Mortgage Direct Limited

First Mortgage Limited

Property Law Centre Limited

England and Wales

Scotland

100

Nature of
business

Provision of financial services

Talk Limited

England and Wales

100

Intermediate holding company

Mortgage Advice Bureau Australia (Holdings)
PTY Limited

Mortgage Advice Bureau PTY Limited

Vita Financial Limited

AUX Group Limited

Australia

England and Wales

Auxilium Partnership Limited

England and Wales

100

Intermediate holding company

100

Holding of intellectual property

Provision of financial services

156

3 Investments (continued)

Company name

Country of
Incorporation

Percentage
of ordinary
shares held

Project Finland Topco Limited

England and Wales

Project Finland Bidco Limited

England and Wales

The Fluent Money Group Limited

England and Wales

Fluent Mortgages Holdings Limited

England and Wales

Fluent Mortgages Limited

England and Wales

Fluent Lifetime Limited

England and Wales

Fluent Money Limited

Fluent Loans Limited

England and Wales

Fluent Bridging Limited

England and Wales

75.4

Nature of
business

Provision of financial services

Company name

Country of
Incorporation

Percentage
of ordinary
shares held

Mortgage Advice Bureau (UK) Limited

England and Wales

Mortgage Advice Bureau (Bristol) Limited

England and Wales

MAB (Derby) Limited

L&P 137 Limited

England and Wales

Mortgage Talk (Partnership) Limited

England and Wales

Financial Talk Limited

Survey Talk Limited

L&P 134 Limited

Loan Talk Limited

MAB1 Limited

England and Wales

MAB Private Finance Limited

England and Wales

MAB Financial Planning Limited

England and Wales

First Mortgage Shop Limited

First Mortgages Limited

Fresh Start Finance Limited

Scotland

100

Nature of
business

Dormant

157

Financial statements | Notes to the Company statement of

financial position (continued)
as at 31 December 2022

3 Investments (continued)

The registered office for Vita Financial Limited is 1st Floor Tudor House, 16 Cathedral Road, Cardiff CF11 9LJ. The registered
office of Mortgage Advice Bureau Australia (Holdings) PTY Limited and Mortgage Advice Bureau PTY Limited is Norton Rose
Fulbright, Level 18, 225 George Street, Sydney, NSW 2000, Australia. The registered office for First Mortgage Direct Limited and its
subsidiaries which are incorporated in Scotland is 30 Walker Street, Edinburgh, EH3 7HR. The registered office of Project Finland
Topco Limited and its subsidiaries is 102 Rivington House, Chorley Road, Bolton, BL6 5UE.

The registered office for all other subsidiaries of Mortgage Advice Bureau (Holdings) plc is Capital House, Pride Place, Pride Park,
Derby, DE24 8QR, United Kingdom.

Mortgage Advice Bureau Australia (Holdings) PTY Limited has a 100% equity stake in Mortgage Advice Bureau PTY Limited and
also a 48.05% equity stake in MAB Broker Services PTY Limited.

Mortgage Advice Bureau (Holdings) plc holds 100% of the ordinary share capital of Mortgage Advice Bureau Limited and Talk
Limited.

Mortgage Advice Bureau Limited holds 100% of the ordinary share capital of Mortgage Advice Bureau (Derby) Limited, Capital
Protect Limited, MABWM Limited and Mortgage Advice Bureau Australia (Holdings) PTY Limited. On 2 July 2019, Mortgage
Advice Bureau Limited acquired 80% of the ordinary share capital of First Mortgage Direct Limited.

First Mortgage Direct Limited holds 100% of the ordinary share capital of First Mortgage Limited, Property Law Centre Limited,
First Mortgages Limited, First Mortgage Shop Limited and Fresh Start Finance Limited.

Talk Limited holds 100% of the ordinary share capital of Mortgage Talk Limited, L&P 137 Limited, Mortgage Talk (Partnership)
Limited, Financial Talk Limited, and Survey Talk Limited.

Mortgage Talk Limited holds 100% of the ordinary share capital of Loan Talk Limited.

L&P 137 Limited holds 100% of the ordinary share capital of L&P 134 Limited.

There are no restrictions regarding the utilisation of cash or other resources held by any subsidiary.

4 Debtors – amounts falling due within one year

Amounts due from Group undertakings

2022
£’000

45,341

Amounts due from Group undertakings are unsecured, interest free and have no fixed repayment term.

5 Share capital

Issued and fully paid

Ordinary shares of 0.1p each

Total share capital

2022
£’000

2021
£’000

6,960

2021
£’000

158

6 Reserves

The following describes the nature and purpose of each reserve within equity.

Reserve

Share premium

Description and purpose

Amount subscribed for share capital in excess of nominal value.

Capital redemption reserve

The capital redemption reserve represents the cancellation of part of the original share
capital premium of the Company at par value of any shares repurchased.

Retained earnings

All other net gains and losses and transactions with owners (e.g. dividends) not
recognised elsewhere.

There is no restriction on the distribution of retained earnings.

7 Financial instruments and risk

The only financial asset of the company is an amount due from other Group undertakings and therefore the Company is exposed
to minimal financial risks. Details of the Group’s management of the financial risks to which it is exposed are set out in note 23 to
the financial statements for the Group.

8 Related party transactions

The Company has taken advantage of the exemption in s33.1A of FRS102 not to disclose transactions with group companies
which are 100% owned.

159

Glossary of Alternative Performance Measures (“APMs”)
for the Group report and financial statements

Certain numerical information and other amounts and percentages presented have been subject to rounding adjustments.
Accordingly, in certain instances, the sum of the numbers in a column or a row in tables may not conform exactly to the total
figure given for that column or row or the sum of certain numbers presented as a percentage may not conform exactly to the
total percentage given.

APM

Closest equivalent
statutory measure

Definition and purpose

Net revenue is revenue less commissions paid to Appointed Representative
firms and payments to Fluent affinity partners.

£m

Revenue

Commissions paid

Payments to Fluent affinity partners

Net revenue

2022

230.8

2021

188.7

(142.8)

(129.6)

(8.0)

80.1

–

59.0

Calculated as administrative expenses (which exclude amortisation of acquired
intangibles, acquisition costs incurred in the year and non-cash operating
expenses relating to put and call option agreements) divided by revenue.

Calculated as EBITDA before charges associated with acquisition and
investments, and other adjusting items that the Group deems, by their nature,
require adjustment in order to show more accurately the underlying business
performance of the Group from period to period in a consistent manner.

Charges associated with acquisition or investments in businesses include:

• non-cash charges such as amortisation of acquired intangibles and the

effect of fair valuation of acquired assets,

• non-cash operating expenses relating to put and call option agreements

and cash charges including transaction costs,

• fair value movements on deferred consideration, and

• fair value movements on derivative financial instruments.

£m

Adjusted profit before tax

Depreciation

Amortisation of other intangibles

Net interest expense

Adjusted EBITDA

2022

27.2

1.1

0.3

0.5

2021

24.2

0.8

0.2

0.1

29.1

25.3

Income statement measures

Net revenue

Gross profit

Administrative
expenses ratio

None

Adjusted EBITDA

None

160

APM

Adjusted
operating profit

Closest equivalent
statutory measure

Operating profit

Adjusted profit
before tax

Profit before tax

Definition and purpose

Calculated as operating profit before charges associated with acquisition and
investments, and other adjusting items that the Group deems, by their nature,
require adjustment in order to show more accurately the underlying business
performance of the Group from period to period in a consistent manner.

Charges associated with acquisition or investments in businesses include:

• non-cash charges such as amortisation of acquired intangibles and the

effect of fair valuation of acquired assets,

• non-cash operating expenses relating to put and call option agreements

and cash charges including transaction costs,

• fair value movements on deferred consideration, and

• fair value movements on derivative financial instruments.

£m

Operating profit

Acquisition of acquired intangibles

Acquisition costs

Non-cash operating expenses relating to put
and call option agreements

Impairment losses

Non-cash fair value gains on financial
instruments

2022

18.5

2.6

2.8

2.0

2.8

(0.9)

2021

23.3

0.4

–

1.0

–

(0.3)

Adjusted operating profit

27.7

24.3

Calculated as profit before tax before charges associated with acquisition and
investments, and other adjusting items that the Group deems, by their nature,
require adjustment in order to show more accurately the underlying business
performance of the Group from period to period in a consistent manner.

Charges associated with acquisition or investments in businesses include:

• non-cash charges such as amortisation of acquired intangibles and the

effect of fair valuation of acquired assets,

• non-cash operating expenses relating to put and call option agreements

and cash charges including transaction costs,

• fair value movements on deferred consideration, and

• fair value movements on derivative financial instruments.

£m

Profit before tax

Amortisation of acquired intangibles

Acquisition costs

Non-cash operating expenses relating to put
and call option agreements

Impairment losses

Non-cash fair value gains on financial
instruments

Unwinding of redemption liability

Adjusted profit before tax

2022

17.4

2.6

2.8

2.0

2.8

(0.9)

0.6

27.2

2021

23.2

0.4

–

1.0

–

(0.3)

–

24.2

161

Glossary of Alternative Performance Measures (“APMs”)
for the Group report and financial statements (continued)

APM

Closest equivalent
statutory measure

Definition and purpose

Adjusted profit
before tax margin

None

Adjusted earnings
per share

Basic earnings per share

Calculated as adjusted profit before tax divided by revenue.

Calculated as basic earnings per share before charges (net of tax) associated
with acquisition and investments, and other adjusting items that the Group
deems, by their nature, require adjustment in order to show more accurately
the underlying business performance of the Group from period to period in a
consistent manner.

Cash flow measures

Headline cash
conversion

None

Headline cash conversion is cash generated from operating activities
adjusted for movements in non-trading items, including loans to AR firms
and associates and cash transaction costs as a percentage of adjusted
operating profit.

£m

Cash generated from operating activities

Acquisition costs

Decrease in loans to AR firms and associates

Headline cash generated

2022

28.5

2.8

(0.8)

30.5

2021

30.3

–

(0.7)

29.6

Adjusted cash
conversion

None

Adjusted cash conversion is headline cash conversion adjusted for increases
in restricted cash balances as a percentage of adjusted operating profit.

£m

Headline cash generated

Increase in restricted cash balances

Adjusted cash generated

2022

30.5

(1.4)

29.1

2021

29.6

(2.4)

27.2

Balance sheet measures

Net debt

None

Loans and borrowings less unrestricted cash balances.

162

Glossary of terms

Appointed Representative, AR,
or AR firm

An intermediary firm or person who is party to an agreement with a FCA regulated firm
permitting them to carry out certain regulated activities

AR Agreement

Adviser

Base Rate

Bridging Finance

Clawbacks

Client fee

Consumer Duty

Agreement governing the terms of the commercial relationship between MAB and an
AR firm, and setting out how income from products sold by Advisers of the AR is split
between MAB and the AR

A person employed or engaged by an AR firm, carrying out mortgage and/or general or
protection insurance advisory services to customers

The Bank of England base rate is the interest rate that the Bank of England charges banks
for secured overnight lending. It is the UK Government’s key interest rate for enacting its
monetary policy

Short-term borrowing used to bridge a gap in funding until a property transaction
completes

The right of insurers to reclaim some or all of the commission paid to an intermediary in
the event premiums are not paid by the policy holder in the period during which the policy
holder pays monthly premiums, typically 48 months for protection products for MAB

A fee paid by the consumer to the intermediary who has arranged the consumer’s
mortgage with a lender

The policy statement published by the FCA in July 2022, which aims to set higher and
clearer standards of consumer protection

Corporate Social Responsibility

A type of business self-regulation that aims to contribute to societal goals by engaging in
or supporting ethically-oriented practices (e.g. fundraising for charity)

Directly Authorised

An entity that is directly authorised by the FCA to carry out regulated activities

ESG

Execution only

FCA

FSCS

FTB

GDPR

Environmental, Social and Governance

Refers to a customer entering into a regulated mortgage contract without being given
advice, or where the advice given by a firm has been rejected. This is effectively a
self-service process

Financial Conduct Authority

The Financial Services Compensation Scheme is the UK’s statutory deposit insurance and
investors compensation scheme for customers of authorised financial services firms

First Time Buyer

The General Data Protection Regulation, a regulation in EU law on data protection and
privacy

General insurance

Buildings and contents insurance and certain other non-life insurance products but
excluding protection

Gross mortgage lending

New mortgage lending and product transfers

Help-to-Buy

UK Government incentives that aim to help first time buyers and those looking to move
homes purchase a residential property. Help-to-Buy schemes include Equity Loans and
Shared Ownership schemes

Intermediary, intermediary firm,
or mortgage intermediary

A firm or individual who arranges mortgages with lenders on behalf of customers,
(as opposed to a lender that the customer approaches directly). An intermediary is either
directly authorised by the FCA or is an appointed representative of a directly authorised
firm

163

Glossary of terms (continued)

IMLA

Insurance or insurance
products

IR35

Later Life Lending

Lifetime Mortgage

The Intermediary Mortgage Lenders Association is a trade association that represents
the views and interests of UK mortgage lenders who are involved in the generation of
mortgage business via professional financial intermediaries

Includes protection and general insurance

The UK’s anti-avoidance tax legislation designed to tax disguised employment at a rate
similar to employment

Refers to mortgage products aimed at those approaching or already in retirement, who
are looking to release some of the equity in their home for a variety of reasons

A type of Later Life Lending whereby no capital or interest repayments are made.
Compounded interest is added to the capital throughout the term of the loan, which is
then repaid by selling the property when the borrower dies or moves out

Mortgage Advice and Selling
Standards

Policy statement issued by the FCA in February 2020 which sets out a package of
remedies aiming to help consumers make better informed choices with regard to
mortgages

Mortgages Market Study

Market study conducted by the FCA in 2019 as a precursor to the Mortgage Advice and
Selling Standards policy statement

Mortgage panel or lender panel

A panel of mortgage lenders used by intermediaries

New build

Encompasses properties built by developers, custom build, self-build and affordable
housing

New mortgage lending

Lending resulting from a mortgage completion in connection with a house purchase or a
re-mortgage with a different lender to the customer’s existing lender

PCW

Price Comparison Website

Procuration fee, or Mortgage
procuration fee

A fee paid by a lender to the intermediary who has arranged a mortgage with the lender

Product transfer

The process of switching an existing mortgage product to a new one with the same lender

Protection insurance

Life insurance (including critical illness), family income protection and certain other
insurance products (but excluding general insurance)

Secured Personal Loan

A loan that uses a property as security, also known as second charge mortgage

Service centres or telephone
centres

MAB’s regional telephone service centres operated by certain AR firms. The services
provided by these centres include reviews of mortgage and related insurance products on
an on-going basis with replacement or new products offered to customers, as appropriate

SM&CR

The Senior Manager and Certification Regime, a regime that aims to raise standards of
governance, increase individual accountability and help restore confidence in the financial
services sector

164

Perivan.com
265630

Mortgage Advice Bureau (Holdings) plc
Capital House
Pride Place
Derby
DE24 8QR