Mortgage Advice Bureau (Holdings) plc Annual Report 2023

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FY2023 Annual Report · Mortgage Advice Bureau (Holdings) plc

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Mortgage Advice
Bureau (Holdings) plc

Annual Report 2023

(

)

Contents

Strategic report

Financial statements

04 Financial highlights

05 Operational highlights

06 Business model

Chair’s statement

Chief Executive’s review

Financial review

Financial performance and
future developments

28 Principal risks and uncertainties

43 Environmental, Social and Governance (ESG)

• Section 172(1) statement
• Stakeholders
• Climate-related financial disclosures
• Environmental performance and strategy
• Strategy and improvement plan

118

119

120

Consolidated statement of
comprehensive income

Consolidated statement of
financial position

Consolidated statement of
changes in equity

121 Consolidated statement of cash flows

122

Notes to the consolidated
financial statements

183 Company statement of financial position

184 Company statement of changes in equity

185 Notes to the Company statement

of financial position

190 Glossary of Alternative Performance Measures

194 Glossary of terms

Governance

80 Board of Directors

Company information

82 Directors’ report

86 Corporate governance

98 Directors’ remuneration report

105 Directors’ responsibilities
for the financial statements

106 Independent auditor’s report

For more information
please visit our website

www.mortgageadvicebureau.com/investor-relations

“

Against a very challenging backdrop in 2023, MAB continued its exceptional track

record of outperformance and market share growth in all market conditions.

“Despite the severe market downturn, we continued our investment across the entire

business and remained resolutely focused on long-term growth. Our proposition

for growth focused mortgage and protection firms is outstanding, underpinned

by best-in-class technology, lead generation and infrastructure, and our aim is to

continue to further increase MAB’s differentiation versus our competitors and grow

market share and profitability.

“2024 has started well, with both purchase and re-financing activity having picked up

significantly. We believe this signals the early stages of a market recovery that builds

towards a catch-up year in 2025, with pent-up demand continuing to be released as

consumer confidence and affordability increase.

“Although we expect organic adviser growth to start building some momentum

again in H2 as our AR firms gain more confidence in the sustainability of the recovery,

recruitment activity in terms of new AR firms is exceptionally strong, reflecting the

significant strides we have made in terms of our technology and lead generation

developments, as well as how we have engaged with and supported our partner firms

with the introduction and integration of Consumer Duty.

“Following an exceptionally strong year for our most mature investment First

Mortgage, strong progress has been made in terms of efficiencies and lead

sources in all our other AR investments, with adviser productivity in these firms

being significantly higher than our average across the Group. We expect a record

performance from our investments this year and believe the portfolio will contribute

“

to accelerated Group profit growth over the medium term.

Peter Brodnicki

Chief Executive Officer

Strategic report | Financial highlights

Revenue

£239.5m

2022: £230.8m . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . +4%

Gross profit

£70.2m

2022: £62.9m . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . +12%

Adjusted profit before tax*

£23.2m

2022: £27.2m . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .-15%

Adjusted fully diluted EPS*

29.6 pence

2022: 37.4 pence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .-21%

Proposed final ordinary dividends

14.7 pence per share

2022: 14.7 pence per share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .-

* 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

Adviser numbers

2,158

2022: 2,254 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .-4%

Average number of mainstream advisers

1,940

2022: 1,988 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -2%

Market share of new mortgage lending

8.3%

2022: 7.5% . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .+11%

Gross mortgage completions1

£25.1bn

2022: £27.3bn . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .-8%

1 First charge mortgage completions, excluding secured personal loans (second charge mortgages),

later life lending mortgages and bridging finance.

Strategic report | Business model

Who we are and what we do

Mortgage Advice Bureau is one of the UK’s leading

MAB has historically benefited from exceptionally strong

consumer intermediary brands and specialist appointed

lead flow in the estate agency and new build sectors.

representative networks for mortgage intermediaries.

The acquisition of The Fluent Money Group (“Fluent”)

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

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.

and lead generation, learning and development,

We are a cash generative and capital light business, that

compliance auditing and supervision, and digital

delivers strong and consistent year on year growth and

marketing and website solutions.

returns for our investors.

Approximately 50% 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

Approximately 50% of our

partner firms trade as

efficiencies, and is used by all our distribution to capture

Mortgage Advice Bureau, that

and nurture customers, manage and distribute leads,

is the most widely recognised

support the advice and mortgage application process,

manage advice quality, and provide an exceptional AR,

adviser and customer experience.

mortgage intermediary

brand in the UK.

Our revenue model

MAB retains a revenue share from the following

Mortgage Procuration Fees:

products sold by the Advisers of its AR firms to

These are paid to MAB by lenders either via the L&G

customers. The average number of advisers in each

Mortgage Club or directly.

financial year is one of the key drivers of revenue.

2023
Revenue
£239.5m

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

18%

ancillary services such as conveyancing and surveying.

39%

41%

Mortgage Procuration Fees

Insurance Commissions

Client Fees

Other Income

Strategic report | Business model (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

2,254

2,158

1,885

1,580

1,457

1,213

1,078

950

790

634

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

£30bn

£25bn

£20bn

£15bn

£10bn

£5bn

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

2,500

2,000

1,500

1,000

500

s
r
e
b
m
u
n
r
e
s
v
d
A

25002500

Our compound annual growth rate (“CAGR”) in gross mortgage(1) lending since our IPO in 2014 is 18%. This was

achieved in a stagnant UK housing market (-2% CAGR since 2014), and illustrates our ability to grow our market

share in all market conditions.

1.2m

1.5m

1.0m

4.1%

4.3%

4.7%

5.7%

6.1%

6.3%

£24.2m

£15.7m

£14.5m

£18.7m

£17.8m

£10.4m

£12.5m

£8.0m

1.3m

7.5%

£27.2m

1.0m

8.3%

£23.2m

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

UK housing transactions

MAB market share

Adjusted Profit before tax

Note: mortgage completions refer to first charge mortgages.

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 - Investment

Historic

Revenue

Profit Before Tax

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

Platform Speed | Ease | Efficiency

Lead Generation Growth | Productivity | Margin

Strategic report | Business model (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.

Company headlines

2023 in numbers:

• Exceptional management team and highly engaged

• Revenue: £239.5m (2022: £230.8m)

employees

• Leading proprietary platform – MIDAS Platform

driving enhanced performance

• Leading consumer intermediary brand

• Award winning – over 200 industry awards

• Adjusted EBITDA: £26.7m (2022: £29.1m)

• 2,158 advisers at 31 December 2023 (2022: 2,254)

• £25.1bn gross mortgage completions(1) in 2023

(2022: £27.3bn)

• Continued strong growth in market share, to 8.3% in

• Reputation for innovation and excellence

2023 (2022: 7.5%)

• Investments play a key part in our plans for

accelerated growth

• Focus on exceptional quality and productivity

• Commitment to outstanding service

• High standards of governance and Board oversight

• 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

foundation, the Mortgage Advice Bureau Foundation

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

of 4.9 out of 5 from over 25,000 reviews

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

finance.

Strategic report | Chair’s statement

Dear Shareholder

During 2023 MAB resolutely continued to invest for

This will be my last statement to

you as Chair as I will be retiring

from the Board at the Annual

General Meeting in May after

nearly ten years since MAB

listed on AIM in November 2014.

In my first report to you in 2015 the Bank of England

Base Rate was 0.5% and had stayed at the same level

for six years since March 2009. This long period of

growth, favouring long-term growth and shareholder

value as well as the needs of its employee base and

customers, over short-term profitability. MAB’s adjusted

EBITDA for the year was £26.7m, an 8.1% decrease

compared to 2022, and adjusted earnings per share

were 29.6 pence on a fully diluted basis, a decrease of

20.9%. The Group remains highly cash generative, with

an adjusted cash conversion of 119% (2022: 105%).

Environmental, Social and Governance (ESG)

very low interest rates came to an end during 2022,

MAB remains committed to the implementation of

when rates were increased eight times in quick

its integrated ESG strategy and ensuring that we are

succession, from 0.25% at the start of the year to 3.5%

a responsible business that grows sustainably and

by December 2022. After 14 years of very low interest

makes a positive contribution to all stakeholders – our

rates this shook consumer confidence and immediately

customers, shareholders, employees, suppliers, and

impacted affordability. The turbulent final quarter of

the local communities in which we operate, whilst

2022, precipitated by the disastrous mini-budget that

minimising our environmental impact.

September, further shattered consumer confidence.

Thus, MAB entered 2023 with a significantly lower

pipeline of mortgage and protection as consumers

delayed their house purchase plans.

The ESG section of the Annual Report sets out the

excellent progress we have continued to make in 2023.

Our Scope 1 (gas) and Scope 2 (electricity) emissions

intensity per employee, as calculated using the UK

During 2023 interest rates continued to rise and there

Government’s 2023 GHG Conversion Factors for

were five further rate increases. Rates reached the

Company Reporting, have continued to decrease,

current level of 5.25% in August, their highest level

largely thanks to the refurbishment we conducted at

for over 15 years. Since then rates have been held and

head office in Q4 2022 which delivered huge benefits in

the current expectation is for the next move to be

terms of working environment and energy efficiency.

downwards, bar any unexpected deterioration in the

economy and/or external market shocks.

We also made good progress in relation to diversity,

equity and inclusion in the workplace, and MAB is

Against a very difficult market backdrop in 2023 where

committed to the principle of equal opportunity in

UK gross new mortgage lending fell sharply by 29%,

employment, regardless of a person’s race, creed,

MAB delivered another strong performance, achieving

colour, nationality, gender, age, marital status, sexual

revenue growth of 4% to £239.5m and an increase in

orientation, religion or disability.

its market share in new first charge mortgage lending

by 11% to 8.5% (2022: 7.3%). At 31 December 2023 total

adviser numbers were down 4% to 2,158 (31 December

2022: 2,254). Adviser productivity remained unchanged

compared to last year, which is testament to MAB’s

ambition and continued success in helping its

Appointed Representatives and advisers best adapt

their focus and resources in all market conditions and

FCA Consumer Duty

In 2023 the implementation of the new Consumer Duty

requirements was completed ahead of the deadline

of 31 July. The new rules require all regulated firms to

consider the needs, characteristics, and objectives

of their customers, to ensure they are always acting

to consider and deliver the right outcome for our

deliver the best possible outcomes for consumers.

customers.

Strategic report | Chair’s statement (continued)

Since implementation, work has continued to ensure

■ Non-Executive Director

the requirements of the FCA’s Consumer Duty are

embedded into the business-as-usual activities within

MAB and owned by senior leaders across the business.

We have always been committed to maintaining our

standards of high-quality advice and good customer

outcomes and believe the implementation of Consumer

Duty supports our Group’s objectives and has

A search for an additional independent Non-Executive

Director who will complement the Board in terms

of profile, skills and experience is well advanced, and

we look forward to updating our shareholders in due

course.

Dividend

strengthened further our operations and governance

Our dividend policy is to pay out a minimum of 75% of

framework.

Board changes

■ Chair

Mike Jones will succeed me as your independent non-

executive Chair with effect from his re-election at our

Annual General Meeting (AGM) on 22 May 2024. Mike

joined the Board in March 2021 and has chaired the

Group Risk Committee since November 2022. Mike’s

leadership, vision and strategic thinking at Lloyds

Banking Group contributed to shape the mortgage

and retail banking markets in the UK. His appointment

brought a wide range of experience and skills to the

Board and I have every confidence that under his

leadership, the Board will continue to ensure that the

business prospers whilst maintaining the highest

standards of corporate governance.

■ Chief Financial Officer

Lucy Tilley, Chief Financial Officer, submitted her

resignation to the Board in January 2024 and is currently

serving her six months’ notice. Lucy joined the Group

in May 2015 having first advised the business on its

flotation and admission on AIM in 2014. During those

nine years Lucy has overseen a huge increase in the

Group’s size and complexity and managed the demands

on the finance function with great skill and aplomb.

We wish her well in her next role. The search for her

replacement is well advanced and an update will be

provided in due course.

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

29 May 2024 to shareholders on the register on 26 April

2024. Dividends paid during the year amounted to

£16.0m and were in respect of the final dividend for the

year ended 31 December 2022, and the interim dividend

for the year ended 31 December 2023.

Outlook

The Group has seen a very positive start to 2024, with

mortgage rates having reduced compared to their peak

last year, the availability of mortgage products having

increased, and mortgage underwriting criteria having

started to reflect a more positive outlook.

Although the current macroeconomic environment

remains difficult to predict, we are optimistic that the

Group will have a strong year and be able to resume

its planned accelerated growth trajectory as we build

momentum into 2025. Current trading is in line with

expectations.

Katherine Innes Ker

Chair

19 March 2024

Strategic report | Chief Executive’s review

13
13

Current trading and outlookFollowing the modest improvement in trading towards the end of last year, we have seen a very positive start to 2024 across both purchase and re-financing, including a long-awaited recovery in Buy-to-Let activity. We previously reported our expectation that overall market activity would increase once inflation was under control and the Bank of England base rate had peaked or started to fall back. Although a first reduction in the base rate is not expected until later this year, mortgage rates have reduced notably, the availability of mortgage products has increased, and mortgage underwriting criteria are starting to signal a more positive outlook.This has all helped consumer sentiment, resulting in increasing house purchase activity, some of which will certainly be driven by the pent-up demand that has built up since the events of September 2022.Although we expect it will be the second half before we see organic adviser growth recommence, our AR firms are eager to resume their growth plans and are preparing to do so now. New AR recruitment activity started picking up strongly in the latter part of 2023, following an understandable lull in the previous 12 months. That momentum has built strongly, boosted by the significant developments in technology and lead generation we have delivered, as well as further investment in our recruitment resources to ensure we can capitalise on the opportunity our proposition enhancements will bring.Although the macroeconomic environment remains difficult to predict, we are increasingly optimistic about the Group’s prospects for this new financial year, with current trading in line with expectations.Strategic report | Chief Executive’s review (continued)

Overview of 2023

2023 started with much depleted mortgage and protection pipelines, following the very turbulent and difficult

final quarter of 2022 post the mini-budget. From this very low base, mortgage activity gradually increased through

much of H1, as it seemed that inflation was starting to come under control, and mortgage rates were appearing to

stabilise at manageable levels for borrowers. However, mid-way through the year, the inflationary backdrop began

to disappoint, which took markets by surprise. Consequently, mortgage rates rose quickly and to levels sufficiently

high enough to markedly reduce house purchase activity, forcing many borrowers to pause and wait longer before

re-financing their existing mortgages, on the hope that mortgage rates would subside later in the year.

As expected, these borrowers started to re-finance in greater numbers much later in the year. We also saw a slight

improvement in purchase related mortgage activity right at the end of the year, as mortgage rates became more

attractive against a backdrop of lower inflation pointing to a more predictable and better outlook for new business

in 2024.

Against this difficult market backdrop where new mortgage lending was down by 29%, MAB grew its market share

of new mortgages(1) to 8.3% from 7.5%, once again outperforming the market in difficult trading conditions. Much

of this outperformance was a clear reflection of how MAB helped ARs and advisers to successfully pivot and focus

their efforts largely towards re-finance and protection opportunities, in the absence of an active purchase market.

As a result, adviser productivity remained virtually unchanged despite the significant drop in purchase transactions.

The ability to do this on the rare occasion of a major downturn strongly underlines the resilience of MAB’s operating

model, and of course any drop in property transactions is typically made up once the housing market recovers.

In terms of MAB’s strategy, although conditions were very challenging, we continued to invest for growth, as

opposed to making short-term cost cuts at the expense of longer-term opportunities. This was to ensure we remain

on a path towards establishing even greater differentiation versus our competitors, enabling us to carry on growing

market share and profitability.

MAB ARs have more employed advisers than the intermediary sector average, and as a result they understandably

reduced adviser numbers quickly in response to a sharp decline in purchase transactions. The 4% fall overall in

adviser numbers was expected as firms consolidated and focused on efficiency and productivity rather than growth

in such uncertain times. We expect a better outcome in 2024, as existing ARs gradually become more confident in a

sustainable recovery.

Despite the 29% drop in UK new mortgage lending, Group revenue for the period was up 4% to £239.5m

(2022: £230.8m), with organic revenue (excluding the Fluent, Auxilium and Vita acquisitions) down 4%, and Group

first charge mortgage completions down 8% to £25.1bn (2022: £27.3bn). Re-financing transactions accounted for

53% of the Group’s first charge mortgage completions by lending value (2022: 42%), driven by a 75% increase in the

Group’s product transfer completions to £6.5bn (2022: £3.7bn).

MAB’s first charge mortgage completions are analysed as follows:

New mortgage lending

Product Transfers

Gross mortgage lending

2023 £bn

2022 £bn

Change

18.6

6.5

25.1

23.6

3.7

27.3

-21%

+75%

-8%

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

Adjusted EBITDA was down 8% to £26.7m

engaging with an adviser. We see this becoming a major

(2022: £29.1m), primarily due to a £9.7m or 28.1% increase

growth opportunity over the medium term, with the

in administrative expenses, reflecting the planned

same digital engagement and nurture helping MAB to

further investment in the Group’s growth strategy.

improve retention year-on-year from an ever-increasing

Lead generation and lifetime customer value

client base.

Our investment and developments in early customer

capture and nurture, data analytics and customer

profiling are helping us build a better understanding

of our existing and future customers and how to best

service all their likely requirements to generate a larger

lifetime value.

This learning is driving the development of our

customer and broker platform, apps and tools whilst

shaping our entire customer engagement strategy.

These optimisations are already delivering early signs of

the size of the opportunity we have, including driving an

MAB’s success has been built on being the leader in

providing an exceptional service to introducer lead

sources and their customers. Our digital customer

engagement and nurture strategy will strengthen our

leading position still further and is already starting to

provide opportunities for new introducer relationships.

Although MAB is the market leader in customer

acquisition and fulfilment from local and national lead

sources, we also support our ARs in optimising direct

customer engagement and acquisition through organic

website traffic and social media.

increasing number of opportunities from our existing

Lead generation - whether that be new customers,

lead channels, supporting the conversion of all leads,

retaining customers, or increasing the lifetime value of a

and identifying high propensity for requirements of

customer - is the major and increasing differentiator for

additional products and services.

MAB that drives adviser and AR growth, performance,

Although we are in the early stages of implementation

and the learning this strategy will bring, we enter an

exciting period as we layer additional opportunities of

potential customers and their value to MAB into our

existing environment.

MAB’s client bank and related retention opportunities

grows year after year, as MAB and its ARs continue to

generate new lead flows.

Our acquisition of Fluent has added Price Comparison

Websites (“PCWs”) and other major national lead

sources to MAB’s market leading position in the estate

agency and new build sectors. These are by far the three

largest sources of new customers for intermediaries.

However, with estate agency and new build in particular,

the leads generated have been largely reliant on human

and retention. Technology and Artificial Intelligence

(AI) are likely to have an increasing impact on how

we acquire, retain, and build extended value for our

customers and for MAB, its ARs and their advisers.

Accordingly, continued investment in these areas

remains a priority, regardless of market conditions, and

will continue to underpin our strategy for strong market

share and profit growth.

Leveraging existing invested-in partners

The majority of our subsidiaries and associates had

significant growth plans in 2023, which have been

delayed because of the difficult market backdrop, albeit

First Mortgage did deliver an excellent performance,

helped partly by the Scottish property market being less

affected than the rest of the UK.

referral, which at best can be inconsistent.

All our subsidiaries and associates strengthened

Our development of digital customer engagement

and research tools enables MAB to reduce that reliance

and generate additional opportunities from these

existing lead sources, with those potential customers

already having had a positive online experience before

their businesses last year, are in a good position to

capitalise on a recovering market and are expected to

resume some level of adviser growth in 2024. Adviser

productivity in this portfolio is significantly higher than

the average across MAB and continues to build. We

Strategic report | Chief Executive’s review (continued)

expect a record performance from our investments this

Consumer Duty

year, and for them to increasingly contribute to our plans

for accelerated profit growth.

Technology, Automation and AI

Technology remains central to our strategy and our

investment in our MIDAS Platform will continue at the

levels required to ensure we are always in the strongest

possible position to optimise operational efficiency and

In 2023, the deadline for the implementation of the

Consumer Duty requirements came into effect. The

Financial Conduct Authority’s (“FCA”) new rules require

all regulated firms to consider the needs, characteristics,

and objectives of their customers, and to ensure they

are always acting to consider and deliver the right

outcome for customers.

drive revenue growth from new lead flow, lead nurture,

The new requirements also include the need to show

customer retention, adviser productivity, and customer

consideration, flexibility and attention to customers with

lifetime value.

We are committed to maintaining our differentiation

through technological advantage, and our roadmap

now incorporates enhanced functionality through

characteristics of vulnerability. The Consumer Duty sets

clear standards of consumer protection across financial

services and requires all firms to put the needs of their

customers first, and central to all they do.

the adoption of AI. As with our MIDAS Platform

The Group’s Board closely monitored the preparations

development, automation and AI will significantly

for the introduction of the Consumer Duty and could

contribute to our growth plans and operational

confirm it was satisfied that the firm was prepared for

efficiency across all areas of the business, as well as

the new requirements by the 31 July 2023 deadline.

future proof our business model and cement our

leadership position in the intermediary sector.

Fluent

Fluent had a growing employed salesforce at the time

of acquisition. We have worked very closely with the

Since implementation, work has continued to ensure

the Consumer Duty requirements are embedded into all

MAB’s activities and owned by senior leaders across the

business. This helps us to ensure that good customer

outcomes are considered as a matter of course, and at

Fluent management team to re-balance the business

all times.

to better suit the much-reduced levels of new business

Good customer outcomes have always been, and

experienced last year. This process saw significant cost

continue to be, central to MAB’s strategy and culture,

reductions and some key personnel changes. Although

and so we see the implementation of Consumer Duty as

adviser numbers were quickly reduced, other cost

hugely complementary and supportive of our objectives

savings and efficiencies continued throughout the year,

as a Group.

ensuring the business is in the best possible shape to

capitalise on improving market conditions.

During this period, Fluent also secured a new long-term

contract with its largest provider of mortgage leads,

whilst adding new lead sources that will support new

business growth in 2024/25.

With a better-balanced cost base, new lead sources

and processes, and a strong management team, Fluent

is well-positioned for a good recovery in revenue and

profits in 2024.

Board changes

■ Non-executive chair

Katherine Innes Ker, non-executive chair, will retire

from the Board at the conclusion of the Annual General

Meeting on 22 May 2024. Katherine joined us as Chair

at our IPO nearly 10 years ago and has been an integral

part of our success since then. Mike Jones, non-executive

director, will succeed Katherine as chair with effect from

his re-election at the AGM. Mike joined the Board in

March 2021 and has chaired the Group Risk Committee

since November 2022. His vision and strategic thinking

have made an immediate impact and we look forward to

his continued contribution as Group chair.

■ Chief Financial Officer

Lucy Tilley, Chief Financial Officer, submitted her

We expect a strong contribution from all our

investments this year, and that they will play an

resignation to the Board in January 2024 and is currently

increasingly important part in our plans to deliver

serving her six months’ notice. The search for her

accelerated profit growth.

replacement is well advanced and an update will be

provided in due course.

■ Non-Executive Director

A search for an additional independent non-executive

director who will complement the Board in terms of

profile, skills and experience is also well advanced,

and we look forward to updating our shareholders in

due course.

Summary

It is very rare to see such a severe downturn in UK

purchase related mortgages as the one we have

Although we do not see normal growth in organic

adviser numbers resuming until 2025, AR recruitment

activity is building very strongly and reflects

the significant technology and lead generation

developments seen at MAB over the last 12 months.

We believe our approach and implementation of

the Consumer Duty across the business is also

a major consideration for firms looking at MAB’s

overall proposition.

Although much of the last quarter of 2023 was

challenging in terms of written activity levels, which

will have some impact on this year, purchase and

experienced, and it significantly affected what would

re-financing activity since then has picked up notably

otherwise have been an incredibly strong year for MAB.

driven by reducing mortgage rates and inflation. We

This was clearly a setback for the business but only one

believe this signals the early stages of a recovery in 2024

of timing.

The investment in our AR and customer proposition

continued as planned, as we strengthened across all

that will build towards a catch-up year in 2025 with pent

up demand continuing to be released as consumer

confidence and affordability increase.

business areas, whilst ensuring we were fully prepared

Market review

for implementation of the Consumer Duty.

The fall in new mortgage approval volumes in the

We also made good progress on our ESG strategy, as we

aftermath of the September 2022 mini-budget

explore how we can become a real influencer in terms of

continued throughout 2023, as the rising costs of living

helping the UK housing stock to become more carbon

and higher interest rates created further affordability

efficient, and how we can be at the forefront to set the

constraints and reduced consumer confidence. After a

standard within the intermediary sector.

The acquisition of Fluent was strategically important,

however the timing of the downturn could not have

come at a worse time for the expected growth of the

business. Despite an understandably challenging first

18 months, the work we have done together will ensure

a better performance this year as Fluent starts to build

back towards our original expectations.

much-depressed Q1 2023, with mortgage approvals 40%

down year-on-year, Q2 saw a slight improvement (down

26% year-on-year). However conditions toughened

further in Q3 2023 (down 41% year-on-year) and this

continued into Q4 (down 13% year-on-year despite

Q4 2022 being heavily affected by the mini-budget).

Overall, new mortgage approvals were down 32% for

2023, as summarised in the graph below.

Strategic report | Chief Executive’s review (continued)

New mortgage approvals and mortgage rates

This led to gross new mortgage completions(1) being down 29% to £223.5bn (2022: £313.2bn(2)). The purchase

segment was down 30% and the re-mortgaging segment down 29%, as illustrated in the table and graph below.

UK Gross new mortgage lending by segment, £bn

Source: UK Finance

Residential purchase

Buy-to-let purchase

Purchase segment

Residential re-mortgage

Buy-to-let re-mortgage

Re-mortgage segment

Buy-to-let segment

2023

121.1

8.2

129.3

65.2

19.8

85.0

2022

168.2

17.4

185.6

82.2

38.0

120.2

-28%

-53%

-30%

-21%

-48%

-29%

28.0

55.4

-50%

Source: UK Finance

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

finance.

(2) UK Finance regularly updates its estimate of gross new mortgage lending, and previously reported £313.9bn at the time of our 2022 results.

New mortgage lending by purpose of loan

30 ,00 0

25 ,00 0

20 ,00 0

m
£

15 ,00 0

10 ,00 0

5,0 00

Jan-22

M ar-22

M ay-22

Jul-22

Sep-22

N ov-22

Jan-23

M ar-23

M ay-23

Jul-23

Sep-23

N ov-23

Other (inc. lifetime and further
advances)

BTL re-mortgages

BTL purchases

Home-owner re-mortgages

Home-owner movers

First time buyers

Source: UK Finance

Whilst affordability pressures restricted the external re-mortgaging sector during the period, Product Transfers saw

a 21% increase by value.

Property transactions were down 19% in 2023 compared to 2022, as illustrated in the graph below. The smaller

contraction relative to mortgage lending volumes indicates an increasing proportion of cash buyers, with higher

interest rates putting cash buyers in an increasingly favourable position to those taking out a mortgage.

UK property transactions by volume

Source: UK Finance

Strategic report | Chief Executive’s review (continued)

The value of mortgage lending was also impacted by

UK Finance’s and the Intermediary Mortgage Lenders

average house prices starting to fall from the peak

Association’s latest estimates of gross new mortgage

reached in H2 2022. Average house prices in 2023 were

lending for 2024, published in December 2023, are

down 2% compared to H2 2022, and flat compared to

£215bn and £205bn, down 4% and 8% respectively

average prices in 2022 as a whole.

compared to 2023.

The share of UK residential mortgage transactions

However, the Group’s current trading and the latest

via intermediaries (excluding Buy to Let, where

market data would indicate that actual numbers

intermediaries have a higher market share, and

may end up higher than these forecasts. Despite the

Product Transfers where intermediaries have a lower

continuing headwinds, the underlying level of demand

market share) continued to grow to 87% (2022: 84%),

for home ownership and mortgages remains strong,

with customers increasingly needing choice, advice

and we expect activity levels to be notably stronger this

and support in a more complex and uncertain macro

year. We also expect external re-mortgaging to make

environment. We expect this increased intermediary

up a greater share of re-financing in 2024, even though

market share to remain stable.

Product Transfers will remain strong.

Strategic report | Financial Review

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

Revenue
£239.5m

Adjusted EBITDA1
£26.7m

£239.5m

£230.8m

£29.1m

£25.3m

£26.7m

£188.7m

£148.3m

£18.5m

Adjusted earnings per share1
29.8p

37.1p

37.8p

28.6p

29.8p

2020

2021

2022

2023

2020

2021

2022

2023

2020

2021

2022

2023

Total income from all revenue streams.

Strategy / objective
Shareholder value and financial performance.

Earnings before interest, tax, depreciation
and amortisation.

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
29.3%

Adjusted EBITDA margin1
11.2%

Administrative expenses ratio
19.5%

26.9%

27.0%

27.3%

29.3%

12.5%

13.4%

12.6%

11.2%

14.5%

14.8%

19.5%

15.6%

2020

2021

2022

2023

2020

2021

2022

2023

2020

2021

2022

2023

Gross profit generated as a proportion of revenue.

Strategy/objective
Managing gross margins.

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

Strategy/objective
Shareholder value and financial performance.

Administrative expenses, depreciation
and amortisation as a proportion of revenue.

Strategy/objective
Operating efficiency.

Adviser numbers
2,158

1,885

1,580

2,254

2,158

Unrestricted cash balances / (Net debt)

Net cash / (debt)

£18.6m

£17.6m

£(16.2)m £(15.2)m

Unrestricted cash balances

£18.6m

£17.6m

2020

2021

2022

2023

2020

2021

2022

£3.0m
2023

Average number of mainstream advisers2
for 2023 was 1,940 (2022: 1,988).

Strategy/objective
Increasing the scale of operations.

Bank balances at 31 December available for use in
operations.

Strategy/objective
Financial stability.

£7.2m

Capital adequacy
£28.0m

£17.1m
Surplus
Capital

£18.9m
Surplus
Capital

£3.4m

£4.3m

£28.0m
Surplus
Capital

£26.8m
Surplus
Capital

£5.5m

FCA 2020

FCA 2021 FCA 2022

FCA 2023

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

Strategy/objective
Financial stability.

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.
2 Excludes directly authorised advisers and MAB’s later life advisers Includes Fluent’s second charge, later life and bridging advisers who have a

higher revenue per adviser than first charge advisers.

Strategic report | Financial performance and future developments

Revenue

Group revenue increased by 3.8% to £239.5m (2022: £230.8m) despite the average number of mainstream(1)

advisers during the year down 2.4% to 1,940 (2022: 1,988). Organic(2) revenue reduced by 4.3% to £199.6m

(2022: £208.6m) driven by a 5% reduction in the average number of organic(2) mainstream(1) advisers to 1,801

(2022: 1,901) and a 1% increase in revenue per organic mainstream adviser, partly due to a lower proportion of new

advisers in the year. Our existing AR firms paused recruitment and focused on efficiency following the September

2022 mini-budget and inflationary pressures causing further increases in interest rates. In addition, we entered 2023

with a lower-than-expected pipeline of written mortgages and new AR firms.

Fluent, which was acquired on 12 July 2022, had 117 (2022: 182) mainstream advisers as at 31 December 2023, and

contributed £37.5m (2022: £21.9m) of revenue during the year. Auxilium, which was acquired on 3 November 2022,

had 226 (2022: 161) directly authorised advisers as at 31 December 2023, and contributed £1.1m (2022: £0.2m) of

revenue. 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, as set out below.

Income source (£m)

Mortgage procuration fees

Protection and General Insurance Commission

Client Fees

Other Income

Total

MAB’s organic(2) revenue across the three core areas was as follows:

Income source (£m)

Mortgage procuration fees

Protection and General Insurance Commission

Client Fees

Other Income

Total

2023

98.0

93.1

43.4

5.0

2022

106.6

82.1

36.3

5.8

239.5

230.8

Change

-8.1%

+13.4%

+19.7%

-14.5%

+3.8%

2023

2022

Change

85.5

88.6

21.3

4.2

99.0

80.5

23.7

5.4

199.6

208.6

-13.7%

+10.1%

-10.1%

-22.9%

-4.3%

As a result of the market downturn in 2023, MAB’s organic banked mortgage(3) mix had a considerably lower

proportion of house purchase transactions compared to the prior year at 45% (2022: 51%), driven by a 19% reduction

in UK property purchase transactions overall, and an even larger reduction of 30% in mortgage-backed UK property

purchase transactions as a result of the fall in consumer confidence. The proportion of re-financing transactions in

MAB’s organic banked mortgage mix increased to 55% (2022: 49%) of completions by volume, as we saw a further

increase in the proportion of product transfer completions by volume to 28% of MAB’s mortgages(3) (2022: 21%, 2021:

13%). Product transfers have a lower average procuration fee and typically have lower protection, general insurance

and client fee attachment rates than other mortgage types.

(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.

(2) Organic means the Group before the impact of the acquisitions made in 2022 (Fluent, July 2022; Vita, July 2022; and Auxilium, November 2022).
(3) First charge mortgage completions, excluding secured personal loans (second charge mortgages), later life lending mortgages and bridging

finance.

The Group’s organic net mortgage(1) completions by value reduced by 9%, with mortgage procuration fees reducing

by 14% as a result of the increased proportion of product transfers. Client fees reduced by 10%. The Group’s organic

protection and general insurance commissions however increased by 10%, reflecting the strong focus of MAB’s

advisers on protection when volumes in the mortgage market fall, particularly in our invested businesses, and the

strength of MAB’s proposition and support in these areas.

MAB’s average first charge mortgage size decreased by 7.1% compared to the prior year, with average house prices

remaining flat year-on-year, reflecting the increased proportion of re-financing completions where the average

mortgage size is lower than for purchase transactions.

Fluent’s revenue contribution across the Group’s three core revenue streams during the year was as follows, with an

additional £1.1m (2022: £0.1m) of revenue synergies realised:

Income source (£m)

Mortgage procuration fees

Protection and General Insurance Commission

Client Fees

Other Income

Total

2023

12 July 2022 –
31 Dec 2022

12.4

2.2

22.1

0.8

37.5

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 £1.1m (2022: £0.2m). Auxilium’s revenues are

classified under protection and general insurance commission and represent the total income received, with there

being no commission payouts to the directly authorised entities serviced by the business.

MAB’s overall revenue from re-financing (including both re-mortgages and product transfers) represented circa 35%

(35% on an organic basis) of total revenue (2022: 32%, 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, with 2021 reflecting a particularly high level of purchase transactions.

The proportion of organic revenue derived from each of the Group’s core revenue streams has remained reasonably

stable as summarised below, with the movements reflecting the change in banked mortgage mix during the

period, as well as the focus on protection.

Income source

Mortgage Procuration Fees

Protection and General Insurance Commission

Client Fees

Other Income

Total

2023

43%

44%

11%

2022

47%

39%

11%

100%

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

finance.

Strategic report | Financial performance and future developments (continued)

The proportion of total revenue derived from each of the Group’s core revenue streams has also changed, due

to the dynamics set out above for organic revenue and a full year effect of the Fluent acquisition. Client fees as

a proportion of Fluent’s revenue are higher than for the organic Group, with protection and general insurance

commission being a lower proportion of Fluent’s revenue due to lower attachment rates on second charge

mortgages, with the Group’s revenue mix summarised as follows:

Income source

Mortgage Procuration Fees

Protection and General Insurance Commission

Client Fees

Other Income

Total

2023

2022

41%

39%

18%

46%

36%

16%

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.

Gross profit margin

Gross profit margin for the year increased to 29.3% (2022: 27.3%) and MAB’s organic gross profit margin also

increased to 28.5% (2022: 26.5%). This increase in gross margin is primarily due to the increased proportion of

protection revenue in the organic Group in 2023.

The network organic business of the Group receives slightly reduced revenue share as existing ARs grow 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

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 organic gross margin to be offset by operational

leverage reducing the Group’s administrative expenses ratio*.

Administrative expenses

Group administrative expenses increased by £10.7m (+29.7%) to £46.7m, mainly reflecting the full year impact

of the acquisitions of Fluent and Vita. Organic adjusted administrative expenses increased by £4.5m (+14.9%) to

£34.6m, reflecting MAB’s continued investment in growth through the market downturn in 2023, and specifically

in its technology platform and marketing team through a mix of employee and third-party costs, which we expect

to drive enhanced lead generation opportunities and future revenue growth. Head office costs, including those

of First Mortgage, and compliance costs also increased to support the Group’s growth strategy. MAB’s Head

office refurbishment at the end of 2022 led to a £0.5m increase in the depreciation charge. All development work

on MAB’s MIDAS platform continues to be fully expensed. The Group’s administrative expenses ratio was 19.5%

(2022: 15.6%), and the organic administrative expenses ratio* increased to 17.3% (2022: 14.4%) reflecting the adverse

impact of the market downturn on revenue growth in a period where the Board originally expected to deliver

operational leverage.

* 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.

The Group expects to continue to benefit from the

of £1.1m, which was due to Fluent’s performance in H1

relatively fixed cost nature of much of its cost base,

2023, with an improved performance in H2 2023, and

where those costs typically rise at a slower rate than

having made an adjusted profit before tax of £1.5m in

revenue, with the operational leverage offsetting the

the period from acquisition to 31 December 2022. These

expected slight erosion of MAB’s underlying organic

figures exclude the impact of any non-cash charges

gross margin as the business continues to grow.

associated with the put and call options for Fluent and

Associates and Investments

Auxilium.

MAB’s share of profits from Associates was £0.8m (2022:

Adjusted profit before tax* as a percentage of net

£0.7m) with all of the Group’s Associates being adversely

impacted by the market downturn.

revenue* was 24.6% (2022: 34.0%) primarily due to the

effect of the market downturn and MAB’s continued

Management believes that the value of a number of

investment in growth.

its associate investments exceeds their carrying value

Finance revenue

recognised using the equity accounting method under

IAS 28.

Adjusted EBITDA, profit before tax and
margin thereon

Adjusted EBITDA* was down 8.1% to £26.7m (2022:

£29.1m), with the margin thereon of 11.2% (2022: 12.6%)

reflecting the impact of the market downturn and

MAB’s continued investment through this period.

Organic adjusted EBITDA* was £24.6m (2022: £26.9m),

with the margin thereon of 12.3% (2022: 12.9%).

Finance income of £0.3m (2022: £0.1m) reflects the

uptick in interest rates that prevailed for most of the

financial year and the interest income accrued or

received on loans to associates and other appointed

representatives.

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

Adjusted profit before tax* was down 14.8% to £23.2m

Term Loan for a further year.

(2022: £27.2m), with the margin thereon being 9.7%

(2022: 11.8%), also reflecting a full year of interest charges

on MAB’s debt facilities. Organic adjusted profit before

tax* was £22.2m (2022: £25.5m), with the margin

thereon of 11.1% (2022: 12.2%). Statutory profit before tax

was £16.2m (2022: £17.4m) reflecting a full year impact

of Fluent, Vita and Auxilium ongoing acquisition-related

costs, including amortisation of acquired intangibles

and non-cash operating expenses associated with the

put and call option agreements relating to the minority

interests on the Fluent and Auxilium acquisitions. As

a result, the margin on statutory profit before tax was

6.8% (2022: 7.5%).

Vita and Auxilium contributed adjusted profit before

tax of £0.5m (2022: £0.05m) and £0.7m (2022: £0.1m)

respectively. Fluent made an adjusted loss before tax

Finance expenses of £2.6m (2022: £1.2m) include £1.4m

(2022: £0.6m) of interest and non-utilisation fees payable

on MAB’s debt facilities, the interest expense on lease

liabilities and a £1.1m charge (2022: £0.6m) relating to the

unwinding of the redemption liability associated with

the Fluent Option and a £0.1m charge (2022: nil) relating

to the unwinding of the redemption liability associated

with the Auxilium Option.

A remeasurement of the redemption liability associated

with the Fluent and Auxilium options has been

undertaken at the year end. This has resulted in a £4.5m

gain (2022: £nil) recognised in the year, split as a £4.7m

gain for the Fluent Option, predominantly due to further

acquisition of share capital undertaken in the year, and a

cost of £0.2m for Auxilium options.

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

Strategic report | Financial performance and future developments (continued)

Taxation

The effective tax rate on adjusted profit before tax*

increased to 21.8% (2022: 16.8%), primarily due to the

The record date for the final dividend will be

26 April 2024 and the payment date 29 May 2024.

The ex-dividend date will be 25 April 2024.

increase in the prevailing UK corporation tax rate from

Balance sheet

1 April 2023. The effective rate of tax on reported profit

before tax reduced to 23.0% (2022: 26.4%), primarily due

to lower acquisition related costs, a gain on redemption

liabilities in the current year and write off of the Boomin

investment in the prior year, which are all disallowable

for tax purposes. This is offset by a higher prevailing tax

rate and higher disallowable share option costs linked to

acquisitions. We expect the effective tax rate on adjusted

profit before tax in future years to be in line with the

prevailing UK corporation tax rate.

In connection with the acquisitions of Fluent,

Vita and Auxilium in 2022, the Group recognised

separately identifiable intangible assets with a fair

value on acquisition of £55.4m and goodwill totalling

£38.7m. The carrying value of the intangible assets

after amortisation at 31 December 2023 was £50.1m

(2022: £55.2m). In addition, redemption liabilities of

£2.4m (2022: £7.0m) and £0.4m (2022: £0.2m) in respect

of the put and call options relating to the Fluent and

Auxilium acquisitions respectively, are included in other

Earnings per share and dividend

payables as at 31 December 2023.

Adjusted fully diluted earnings per share* was 29.6p

A clawback liability is recognised on the balance sheet.

(2022: 37.4p). Basic earnings per share increased to 23.6p

Life insurance commissions are paid upfront on an

(2022: 21.8p) due to £2.6m lower acquisition-related

indemnity basis, mainly over a four-year period. If a

costs, £4.5m fair value gain on redemption liabilities in

policy is cancelled during the indemnity period, part

2023 and the £2.8m write off of the Boomin investment

of the commission received may have to be repaid to

in 2022, offset by £2.6m higher amortisation of acquired

the policy provider. The clawback liability estimates the

intangibles due to a full year of amortisation on 2022

value and timing of repaying commission received on

acquisitions.

The Board is pleased to propose a final dividend of

14.7p per share (2022: 14.7p). This brings the total

proposed dividend for the year to 28.1p per share

(2022: 28.1p), reflecting the Group’s policy to pay

an indemnity basis for policies that may lapse in a period

of up to four years following inception.

In 2022, 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

dividends reflecting a minimum pay-out ratio of 75%

(the “Facilities Agreement”), in order to part fund the

of the Group’s annual adjusted post-tax and minority

cash consideration payable in relation to the Fluent

interest profits. This represents a cash outlay of £8.4m

acquisition. As at 31 December 2023, the Group had

(2022: £8.4m). Following payment of the dividend, the

drawn down £1.6m (2022: £3.2m) on the revolving

Group will continue to maintain significant surplus

credit facility, in addition to a remaining balance of

regulatory reserves.

£16.3m (2022: £20.0m) on the term loan, and had

£0.4m (2022: £0.2m) of accrued interest net of prepaid

loan arrangement fees. Net debt (adjusting only for

unrestricted cash balances of £3.0m (2022: £7.2m)) was

£15.2m (2022: £16.2m).

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

Cash flow and cash conversion

The Group’s regulatory capital requirement represents

2.5% of regulated revenue and totalled £5.5m at

The Group’s operations produce positive cash flow,

31 December 2023 (2022: £5.5m), with the Group

which is reflected in the net cash generated from

reporting a surplus of £28.0m (2022: £26.8m).

The following table demonstrates how cash generated

from operations was applied:

operating activities of £23.7m (2022: £24.3m).

Headline cash
conversion* was:

123%

Adjusted cash

conversion* was:

110%

105%

119%

2021

2022

2023

Other than the £2.8m refurbishment of the Group’s

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

Investment in associates (including

payment of contingent consideration)

Repayment of borrowings

Net interest paid and principal

element of lease payments

£m

7.2

28.6

0.4

(16.0)

(0.8)

(5.4)

(0.5)

(5.4)

(1.9)

(1.2)

(2.0)

3.0

head office in Derby in 2022, the Group’s operations are

Acquisition of minority interest in subsidiaries

typically capital-light, with the most significant ongoing

Capital expenditure

Unrestricted bank balances at the end

of the year

capital investment being in computer equipment.

A further £0.4m was spent on the final elements of the

head office refurbishment project in early 2023, and

only £0.5m of general capital expenditure on office and

computer equipment was required during the year

(2022: £0.4m). Group policy is not to provide company

cars and no other significant capital expenditure is

foreseen.

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

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 crystallised 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-

Impact

Change in

hood

Risk

Strategic & Market Risks

Geo-political

In 2022, the major concerns

It is anticipated that the conflict in

Medium High

Increased

issues resulting in

related to the Russia-

Ukraine and the Middle East will

increasing global

Ukraine conflict and the

continue with the outcome remaining

conflict.

deteriorating relationship

uncertain. Should these conflicts

between the USA and China.

escalate further it is expected to

However, in the last

12 months there has been

further reduce household expenditure

and consumer confidence.

an increase in the number

The UK funding markets however

of conflicts arising across

continue to be notably liquid, with

the globe. Active conflicts

Lenders having access to significant

are at their highest levels in

resources. The wider capital markets

decades.

remain open and active too.

Risk Title

Risk Description

Mitigating Factors / Commentary

Likeli-

Impact

Change in

hood

Risk

Currently, there are three

The Bank Base Rate increases appear

main conflicts where

to have slowed while the market

escalation is considered

recovers, but the impact these

possible: Ukraine; the Middle

conflicts could have on inflation

East; and Taiwan.

remains unclear.

The recent escalation

MAB has no presence in the impacted

with the US and UK

regions, so the conflict does not

targeting Houthi rebels

present a direct physical risk to the

in Yemen is one example

continuity of services. However, it has

of a materialisation of this

outsourced some small technology-

and the risk of the conflict

related activities within Poland but

expanding outside of Israel

continues to monitor the situation with

across the wider region of

a view to implementing mitigation

the Middle East appears to

measures should this neighbouring

be increasing.

country become more directly

Previous conflicts have

affected by the conflict.

had a knock-on negative

The impact of the UK’s involvement in

domestic impact in the UK,

the Israeli and Palestinian conflict is

in particular due to rising

uncertain. However, it is possible that

energy prices, cost-of-living

this could result in increasing divides

increases, and political

across the population and disruption

uncertainty. Specific risk can

to supply chains across the world.

be felt from the resulting

upward pressure placed

upon mortgage rates due to

higher inflation.

Consumer confidence

levels, and consequently

the housing and mortgages

markets, have been

disrupted and this is likely to

continue or increase, should

conflicts escalate or persist.

Strategic report | Principal risks and uncertainties (continued)

Risk Title

Risk Description

Mitigating Factors / Commentary

Likeli-

Impact

Change in

hood

Risk

Macroeconomic

MAB’s performance is

MAB regularly stress tests its forecast

Low

High

No change

subject to macroeconomic

and considers this against housing

conditions surrounding

market changes and movements in

the UK housing market,

Bank Base Rate. It is also notable that

which impact on property

MAB has a highly cash generative

transaction levels. The risk

business model.

of regular and meaningful

increases in interest rates is

likely to have a detrimental

impact on the housing

market and customers’

financial situations.

Throughout 2023 the impact of the

Autumn 2022 mini budget was felt.

Rising costs of living and inflation,

resulting in sequential rises in the

Bank Base Rates to levels not seen for

several years.

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 2024.

The mortgage market has seen delays

in transactions, and in many instances,

borrowers seeking to remortgage

before their rates increased further.

MAB is well positioned to help its

customers and maximise new

opportunities in such an environment.

Availability of

MAB’s offering would be

The macroeconomic volatility of

Low

Medium Decreased

Mortgage Lending

at risk in the event of a

Autumn 2022 steadied during 2023,

significant reduction in the

with inflation continuing its downward

availability of mortgage

trend and the Bank Base Rate

lending.

consequently stabilising. There is now

even a chance of a rate reduction at

some point in 2024. Confidence has

therefore returned to lenders and

customers alike.

Risk Title

Risk Description

Mitigating Factors / Commentary

Likeli-

Impact

Change in

hood

Risk

Affordability has eased which is

providing many customers with

good purchase and remortgage

opportunities. Lenders have

responded with greater competition

through pricing and less stringent

underwriting criteria.

With UK banks remaining very

well capitalised and funded, and

greater interest and activity in the

securitisation market, the future for

lenders is positive.

For 2024, market expectations are that

c1.5m existing mortgage borrowers

will be coming off existing fixed rate

mortgage deals. With mortgage rates

at least 1% lower than at this time last

year, customer choice is significantly

better.

When taking on new mortgage

borrowers, lenders must assess

affordability. Whilst many borrowers

are still faced with increasing

mortgage rates, more are able to

meet these tests. The result is that

fewer borrowers will therefore rely on

Product Transfers this year compared

to 2023, which presents an improved

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

of products for customers, enabling

them to re-finance and move home

more freely.

Strategic report | Principal risks and uncertainties (continued)

Risk Title

Risk Description

Mitigating Factors / Commentary

Likeli-

Impact

Change in

hood

Risk

Climate Change

The impact of climate

Whilst MAB’s day to day operations are

Low

No change

impact and

attitudes of

change is at the forefront of

non-energy intensive, it has assessed

the minds of many in terms

the direct environmental impact of its

consumers,

of the role businesses have

business and continues to monitor the

investors, and

in meeting the challenges

risks identified.

other stakeholders

set by global leaders to drive

change and transition to

lower carbon economies.

Businesses that do not

embark on a journey to

reduce their emissions are

likely to be prejudiced or

penalised.

MAB is further committed to

reducing its environmental impact

where feasible. A new post of Head

of ESG was created in 2023 and an

appointment to the role was made.

Given the rising frequency

Whilst none of MAB’s facilities are

Low

New Risk

in climate change related

located in areas at risk from climate

events, particularly floods, it

related events, the business has

is paramount for businesses

re-evaluated its business continuity

to conduct a thorough

and disaster recovery plans to ensure

assessment of potential

that even if MAB’s facilities were to be

climate events in respect

impacted, a seamless continuity of its

of potential damages to its

business operations is ensured.

own premises and that of

critical suppliers.

Given MAB’s critical IT infrastructure

is now also 100% Cloud hosted, any

potential business disruption resulting

from damages to facilities of its IT

supply chain has been minimised.

Investors and consumers

MAB recognises that it has an

Low

High

New Risk

are increasingly looking

important part to play in attending

towards sustainability

to the issues of climate change

related credentials of the

through its role as a leading financial

companies they interact

services intermediary. MAB continues

with. Businesses failing to

to invest in its ESG strategy and is

address rising expectations

currently developing a new ‘Green

in this respect are likely to

Mortgage’ service via its preferred

be materially prejudiced.

lenders who similarly recognise

the shift in consumer and investor

perspectives, and the corresponding

potential for good outcomes for

customers in this area.

Risk Title

Risk Description

Mitigating Factors / Commentary

Likeli-

Impact

Change in

hood

Risk

Regulatory

compliance

MAB has consolidated its efforts in

respect to ESG (including community

support, employee relations and

governance) under the remit of the

Sustainability Committee, which

ensures that progress in this area is

appropriately monitored by the Board

of Directors.

Legal & Regulatory Risks

Failure to comply with

MAB maintains open and effective

Low

High

No change

current regulatory

relationships with regulators and

requirements, or

relevant industry associations, in

appropriately anticipate,

addition to having relevant and

react to, and embed new

appropriate governance structures

legislation, regulation

and controls in place across the

and applicable standards,

business. This ensures MAB complies

could result in reputational

with current regulatory and legislative

and financial damage, as

requirements and continually monitors

well as sanctioning by the

emerging changes. This includes the

relevant regulators such

evolving standards relating to the

as the FCA (withdrawal of

issues of climate change and broader

authorisations) and the ICO

Environmental, Social and Governance

(imposition of censure and/

(‘ESG’) compliance. It is anticipated

or financial penalties).

post-Consumer Duty implementation

there will be increased engagement

by the FCA across varying Firms and

Sectors.

MAB operates an enhanced risk-

based approach to supervision and

governance. It continues to undertake

a programme of investment in the

further development of its ‘Risk Profiler

System’, together with the deployment

and integration of external systems,

to ensure MAB can evidence that

advisers are delivering best advice and

outcomes for customers.

Strategic report | Principal risks and uncertainties (continued)

Risk Title

Risk Description

Mitigating Factors / Commentary

Likeli-

Impact

Change in

hood

Risk

Appointed

MAB has full regulatory

As Principal, MAB assumes overall

Low

Medium Decreased

Representative

responsibility for the actions

regulatory responsibility for its

(AR) model

of its ARs and advisers.

ARs. This is reflected in the policies

and procedures comprised in

its governance and supervision

framework.

The Appointed Representative Regime

requires the relationship between

‘Principals’ and ‘ARs’ to continue to be

the subject of detailed enquiry and

actively monitored. As a consequence,

MAB has a control environment and

oversight approach to meet the

regulatory standards and expectations.

MAB also continues to proactively

engage with the regulator and

industry associations to discuss the

dynamics of operational processes and

procedures, to ensure best practice is

maintained.

Litigation and

MAB could be subject to

MAB has comprehensive advice

Low

High

No change

complaints

litigation or complaints not

guidance and compliance processes

covered by insurance.

in place for advisers. These mandate

high standards of advice and thorough

maintenance of record-keeping at all

times.

Accordingly, upheld complaint

levels remain very low compared to

transactional volumes. Furthermore,

MAB has not been subject to any

actual or threatened material litigation.

Appropriate Professional Indemnity

Insurance is procured and reviewed

regularly.

Risk Title

Risk Description

Mitigating Factors / Commentary

Likeli-

Impact

Change in

hood

Risk

Fraud

There is a risk that MAB is

MAB has robust controls in place

Medium High

No Change

potentially exposed and

to monitor and identify potentially

exploited by fraudulent

fraudulent activity by AR firms,

activity by any of its

advisers and customers, with the

customers, AR firms,

resource available to conduct detailed

advisers, employees or

investigations should the need

unknown third parties.

arise. MAB continues to assess the

effectiveness of these controls and

identify opportunities to improve, with

oversight by the RCC.

MAB utilises an Electronic Identity

Verification solution to mitigate risks

during advisers’ engagement with

customers, particularly where there is

no face-to-face interaction.

In addition, regular guidance and

support is given to ARs and advisers

to ensure awareness of potential risks

and trends, with interactive training

on best practices. Robust controls are

also in place across MAB systems to

limit the opportunities for employees

to commit fraud, particularly where

individuals have access to financial

resources.

Operational Risks

Infrastructure and

MAB’s performance would

There has been significant and

Low

High

Decreased

IT systems

be adversely impacted if the

continued investment into MAB’s IT

availability and security of

infrastructure. There are two primary

its proprietary system, and

line-of-business applications, both

other IT infrastructure, was

of which are located in the Cloud

compromised.

following the transition completed

in 2023.

Strategic report | Principal risks and uncertainties (continued)

Risk Title

Risk Description

Mitigating Factors / Commentary

Likeli-

Impact

Change in

hood

Risk

Cyber and

The negative impact of MAB

The landscape of cyber threats

Medium High

No Change

Information

suffering a deliberate cyber-

MAB faces remains diverse: from

Security

attack on its systems could

state-sponsored cyber-attacks on

be significant.

UK businesses and infrastructure, to

smaller groups or individual parties

attempting to disrupt services and

gain financially, and to the growth in

Artificial Intelligence (AI) seen in 2023.

Through 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, through active

monitoring of systems and alerts on a

continuous basis 24/7.

To combat the growing risks AI

represents, governments are

beginning to roll out new and evolving

regulations to target both hosts and

creators of online disinformation

and illegal content. Regulation of

generative AI will likely complement

these efforts.

MAB’s ‘Information Security Strategic

Vision’ has been complemented 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 (including AI), 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.

Risk Title

Risk Description

Mitigating Factors / Commentary

Likeli-

Impact

Change in

hood

Risk

Technological

MAB may fall behind its

Fundamentally, via its ARs

Low

Decreased

advancements

competitors if it does

and advisers, MAB provides a

not keep abreast of

comprehensive and thorough

expectations in relation

advice journey to its customers. The

to the use of technology,

greatest level of trust and confidence

or implement solutions

during this stems from the in-person

accordingly, and otherwise

interactions between adviser and

drive change at the pace

customer. For this reason, alternative

demanded by the market it

new business models that aim to

operates in, and its existing

make mortgage advice to customers

and prospective customers.

more streamlined through the use of

new technology, have yet to gain any

traction in the UK.

However, MAB is aware that newer

technologies, such as AI, may

significantly impact the market

and is certainly not complacent.

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 My MAB 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, is investing heavily in new

technologies and continues to

monitor such issues closely and is well

positioned to innovate or partner with

other parties as further technological

developments occur.

Strategic report | Principal risks and uncertainties (continued)

Risk Title

Risk Description

Mitigating Factors / Commentary

Likeli-

Impact

Change in

hood

Risk

AR Size and

MAB’s ARs are spread

MAB maintains strong relationships

Medium Low

No Change

Concentration

throughout the UK, a

with its ARs to ensure it provides

small number of whom

appropriate support for continued

have significant numbers

growth, whilst being aware of key risks

of advisers (over 100 per

posed within its AR Model.

firm). There are possible

risks should such larger

ARs fail or where there is a

heightened concentration of

ARs in certain locations.

MAB conducts regular monitoring of

the ARs, including heightened and

close financial scrutiny of those in

which it is directly invested.

To the extent that certain regions,

such as Scotland, have historically had

a larger concentration of advisers than

other parts of the UK, this has been

rebalanced following the addition of

advisers via the Fluent acquisition in

2022.

Key Employees

The impact of MAB losing

MAB continues to invest in its People

Medium Low

No Change

key employees and/or

& Culture Team and its strategy for

otherwise experiencing

pursuit of excellence in this area. This

a substantial number of

is being effected through increasing

departures of employees

employee engagement, promoting

would be significant.

MAB’s Diversity, Equity and Inclusion

related policies, and enhancing the

implementation of its ESG standards by

appointing a dedicated Head of ESG.

Remuneration continues to be

reviewed annually, and takes account

of the National Minimum Wage and

the on-going cost-of-living crisis.

MAB continues to successfully retain

its senior employees. The recruitment

of further leaders continues, and

development of future leaders

enhances the breadth of management

experience and span of control.

Risk Title

Risk Description

Mitigating Factors / Commentary

Likeli-

Impact

Change in

hood

Risk

Succession planning is assessed

annually by MAB’s Nominations

Committee, where the retention

and succession of key personnel is

discussed and agreed in detail.

MAB has succession plans in place

for Board members and its Senior

Management Team, aiming to improve

the roster of internal candidates for

key roles. A new role of Chief People

Officer was created in 2023 and an

appointment made at the beginning

of 2024, to oversee and further develop

succession planning and talent

management throughout the business.

Supply Chain

Disruption to MAB’s supply

MAB continues to be reliant on

Medium High

No Change

dependencies

chain would likely cause

suppliers to ensure the delivery of its

operational, financial and

services. This is a common trend across

reputational harm.

all financial services organisation. The

increased use of Cloud-based systems

and system integrations is notable,

bringing associated risks should the

relevant suppliers fail.

MAB continues to enhance

its procurement and supplier

management framework. The new

Contract and Procurement Manager

was appointed in Autumn 2023 to

oversee and manage the Procurement

process within MAB. The output

is an enhanced onboarding and

due diligence process and further

improved oversight of MAB’s contract

repository and supplier records.

To further strengthen its control

framework around suppliers,

MAB enhanced its governance

structure throughout 2023 with the

implementation of the Resilience and

Recovery Committee to oversee the risk

supply chains present to operations.

Strategic report | Principal risks and uncertainties (continued)

Risk Title

Risk Description

Mitigating Factors / Commentary

Likeli-

Impact

Change in

hood

Risk

Investment &

Poor execution of

MAB has a deliberate and focussed

Medium Medium No Change

Acquisitions

investment and acquisition

strategy to deliver year on year growth

Financial Risks

strategy. This could apply to:

in market share and positive returns

a. New investments or

acquisitions

b. Poor trading outcomes of

existing investments or

acquisitions.

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

Increased operational risks

diligence, engaging external specialists

could derive from having

as required.

a broader commercial

offering as a result of such

corporate activity.

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, which as with all

businesses are to some degree

impacted by market conditions.

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.

Risk Title

Risk Description

Mitigating Factors / Commentary

Likeli-

Impact

Change in

hood

Risk

Potential loss of a

MAB has an increasing

The risk of over-reliance on certain

Medium Low

No Change

major partnership

number of material

partners across the businesses

or contract (lead

commercial partnerships

remains, with the impact of the loss

sources)

with customer lead sources.

of a major lead source still being

The loss of one of these

significant.

contracts, or a reduction in

MAB has an experienced relationship

lead volumes could impact

management team in place, with

revenues and consequently

responsibility for key account

reduce profitability and

management and liaison defined

strategic performance.

at senior management level and

supported by members of 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 broadening of MAB 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 ‘over-reliance’

on a particular lead source type.

Furthermore, the associated margin

impact in relation to a single lead

source partner on one part of MAB

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-

Impact

Change in

hood

Risk

Reputational risk

The quality of MAB’s

MAB prides itself on maintaining the

Low

Medium No Change

Reputational Risks

proposition, its continued

reputation of its advisers as offering

growth, and the credibility

the best support to and ensuring

of its ARs and advisers in

good outcomes for their customers.

meeting the obligations to

Following the implementation of the

customers are each material

AR oversight and Consumer Duty,

factors that directly affect

MAB has further enhanced its control

its reputation. Any failures

framework to ensure customers

in this regard would present

are receiving the correct outcomes.

an immediate risk.

MAB also continues to review further

Indirectly, were another

opportunities across the Group.

large mortgage

MAB is especially mindful of how it

intermediary to fail to meet

responds to customer complaints

its obligations to consumers

and interactions with the Financial

there is a risk that this could

Ombudsman Service, always seeking

cause wider reputational

to ensure an objective assessment of

harm to the market, and

matters is undertaken, preserving its

equivalent intermediaries

integrity in doing so.

(such as MAB).

Customer feedback on external portals

such as Feefo and Trustpilot is regularly

monitored to enable MAB to have

broader visibility of the experience’s

customers are having. Where

appropriate customers are encouraged

to further interact with MAB if they are

concerned or dissatisfied.

The membership of, and significant

participation in, the Association of

Mortgage Intermediaries (‘AMI') forum

allows MAB to voice its concerns

and drive positive change across

the market in the interests of all, in

particular consumers.

Strategic report | ESG | Section 172(1) statement

MAB remains committed to the implementation of its integrated ESG strategy and ensuring that we are a

responsible business that grows sustainably and makes a positive contribution to all stakeholders – our customers,

shareholders, employees, suppliers, and the local communities in which we operate, whilst minimising our direct

environmental impact.

In 2023, MAB made significant progress on its ESG strategy, having deliberately opted to continue investing in this

important area, despite the pressures to cut costs in what was a difficult market. MAB already helps hundreds of

thousands of customers every year to find their dream home and re-finance their mortgages. In addition, every

customer is offered a proper conversation about protecting their mortgage and their families against unforeseen,

unfortunate, and sometimes very sad circumstances.

The Group has therefore a strong social purpose, reflected in its Mission and Vision Statements:

Our Mission: We help people fulfil their aspirations, by making key financial moments in life a simple, happy and

reassuring experience – from home ownership and beyond.

Our Vision: We want to become the leading financial partner through life’s key moments. By being an amazing

place to work, providing an outstanding experience for our customers, transforming the industry with the best

mortgage journey, having a positive social and environmental impact.

The ESG section of this report outlines the activities we have progressed throughout the year to embed and further

our integration of core sustainability themes into our operations, and includes:

• details of how the Group continues to build upon the progress made in previous years in implementing and

advancing its ESG strategy;

• our stakeholder engagement arrangements, including the section 172 statement of the Companies Act 2006;

• our environmental performance and strategy report;

• how the Group assesses and manages climate-related risks and opportunities, in line with the requirements of

Climate-related Financial Disclosure Regulations 2022; and

• our ESG strategy and progress.

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.

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

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

Our core business model and strategy are designed to secure sustainable long-term

any decision in the

growth whilst continuing to deliver strong results in the meantime, and as such the

long-term

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 10. 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 ‘Key performance indicators’ section of the

Strategic report on page 21, 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 is especially important given the ongoing 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 51 and pages 65 to 70 in the Environmental, Social and Governance section of the

Strategic Report.

Fostering business

Engaging with our stakeholders is very much a part of our ethos as it strengthens our

relationships with

relationships and helps us make better business decisions.

suppliers, customers

and others

How the business has engaged with suppliers, clients and other counterparties is set

out on pages 49, 50, 84 and 85. 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.

Section 172 factor

Approach taken

Impact of operations

We are proud to support our local community, building on the success of the Mortgage

on the community and

Advice Bureau Foundation. More details on our engagement with local communities

the environment

and charitable activities during the year can be found on pages 72 to 76, 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 section

of the Strategic report on pages 61 and 62. However, the Board is committed to limiting

the impact of the business on the environment where possible.

Maintaining high

The Board is committed to achieving and maintaining high standards of business

standards of business

conduct, corporate governance, integrity and business ethics.

conduct

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.

The Group further strengthened its internal governance framework in 2023 by

implementing sub-Committees to RCC. These include the Product & Pricing Committee

and the Resilience and Recovery Committee.

As part of the ongoing enhancements of the governance, risk and compliance

framework, MAB is moving away from a solely outsourced internal audit function.

Following the appointment of an Internal Audit Manager in January 2024, MAB will

be moving to a co-source model. The Internal Audit Manager will operate as MAB’s

independent assurance function within the third line of defence, reporting directly into

the Chair of the Audit Committee and will challenge the design and effectiveness of our

controls whilst using our co-source internal audit supplier when necessary. More details

on risk and our internal controls can be found on pages 86 to 97.

MAB is focussed on maintaining a positive relationship with our regulators. MAB is a

proactive member of the Association of Mortgage Intermediaries (AMI) and supports

the trade association’s interactions with the government, regulators and policymakers

to ensure the mortgage industry meets the needs of our customers and appointed

representative firms.

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

Section 172 factor

Approach taken

The Group continuously monitors upcoming changes to regulation and is well

positioned through our membership with AMI and our relationship with the regulator

to understand the implications of and respond to, any changes. More details on the

Company’s approach to Consumer Duty can be found on pages 16 and 96.

Acting fairly between

The Board is committed to openly engaging with our shareholders. We recognise

members

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 96 and 97.

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. Regular

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 Board is responsible for the Company’s ESG activities set out in the Strategic Report on pages 43 to 78.

Ben Thompson is the Group’s designated executive with responsibility for ESG;

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

or executive remuneration;

• The Board’s risk management procedures set out in 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;

• 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.

Strategic report | ESG | 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

• The quality of consumer outcomes has

providing the best consumer

always been central to MAB’s culture, and

outcomes.

the implementation of the Consumer Duty

has seen us further strengthen our focus and

processes in this area.

• Our enhanced focus on consumer outcomes

encompasses the four pillars of Consumer

Duty: (a) products and services; (b) price

and value; (c) consumer understanding; and

(d) consumer support; with an additional

important pillar we decided to add relating to

customer vulnerability.

• Our digital solutions continue to improve,

thus enhancing consumers’ choice of how

they want to transact, whilst giving our ARs

the tools to improve their productivity.

• 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,

which has remained at a strong 4.9 (out of 5)

throughout the year.

• Our website has seen a complete overhaul

in 2023 and we have significantly enhanced

its content and tools offering with a view

to providing consumers with a host of

useful information relating to mortgages,

sustainable living, first time buying and

various other related topics.

• We engage with customers via various

surveys to better understand any concerns

they may have and help shape our strategies,

for instance in relation to the changing

buy-to-let landscape and legislation around

minimum EPC ratings.

Stakeholder

Why we engage

How we engage and outcomes

Appointed

Maintaining an active dialogue and

• We use a collaborative approach in operational

Representatives

supporting our AR partners is key to

matters such as setting goals and objectives

our business.

and hold regular review meetings with each

AR firm. We also work with specialist ARs and

providers to explore new ideas and growing

markets.

• We have continued to broaden our Learning &

Development offering to support our advisers’

professional development. This included the

organisation of specific roadshow events as well

as regular adviser “clinics” at which knowhow

and supervision matters are discussed;

including the launch of our new interactive

Masterclasses.

• To support the implementation of the FCA’s

Consumer Duty, we carried out a review of our

processes and policies, to ensure they were

aligned with the new principle. Through our

ongoing programme of training and support,

we provide ongoing guidance to AR firms to

help them meet their obligations and to ensure

good customer outcomes.

• We strengthened our Academy adviser

induction processes to offer a flexible

environment of self-learning with daily trainer

interaction discussion-led webinars, activities

and case studies. Our onboarding journeys for

advisers have been accredited by the Princess

Royal Training Awards for the content, feedback

and results they have garnered.

• We have replaced our communication platform

“MABChat” with a more intuitive and flexible

system (“Tribe”) which allows us to increase

our reach and better tailor content to multiple

audiences across all marketing channels.

• We continued to improve the technology

platform at the core of our business, based

on the feedback of our ARs and advisers and

trends in the market.

Strategic report | ESG | Stakeholders (continued)

Stakeholder

Why we engage

How we engage and outcomes

• As in the previous year, we issued an adviser-

facing green survey to identify any material

changes in consumer attitudes toward green

mortgages and the energy efficiency of

properties, whilst also establishing potential

knowledge gaps amongst our adviser

community.

Suppliers

Strong and sustainable relationships

• We hold regular roundtable events with

with our suppliers and providers

our product providers and lead partners

are fundamental to our long-term

where topics such as business process

success.

improvements are discussed as a group.

Similarly, disciplined procurement

• Building on the implementation of

practices encourage better

standardised procurement processes in 2022,

relationships and greater efficiencies.

we expanded our team in 2023 in order to

bring sourcing under central control, as well

as strengthen our supply chain governance.

• In 2023 we also enhanced our supplier code

of conduct and procurement policies further

with added emphasis on environmental

matters when procuring goods and services.

Shareholders

As owners of the Group, we rely on

• We have an open dialogue with our

our shareholders’ support and their

shareholders through one-to-one meetings,

opinions are important to us.

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.

Stakeholder

Why we engage

How we engage and outcomes

Employees

Our employees are our most valuable

• We focus on creating a working environment

asset. Their immense knowledge,

in which people thrive and where our core

skills and experience are key to our

values are communicated effectively and

success and are vital to ensuring

upheld. We believe that a positively engaged

we maintain the high standards of

workforce is one that is more productive,

customer service.

happier and fulfilled, which in turns leads to

improved performance, greater customer

satisfaction and reduced employee attrition.

• In 2023 we strengthened our People Team

through the onboarding of a dedicated Head

of Employee Engagement and Development,

as well as an Internal Communications

Manager.

• We launched a new internal communications

platform, Chatter, which gives us added

control over published content and allows

us to better engage with our colleagues via

multiple channels. “Chatter” also provides

employees with Health and Wellbeing related

content as well as discounts on numerous

products.

• We created and launched our new

Performance Excellence Framework, a

standardised methodology to evaluate the

performance of our colleagues taking into

account the MABology DNA behaviours.

• 2023 also saw us increase focus on Diversity,

Equity and Inclusion, with a number of

employees coming together to form a new

DEI affinity group ‘U’Nity’.

• We continued to uphold our regular internal

communication events including ”MABFest”

and “Friday Joy”.

• We started to introduce ESG-specific

responsibilities and objectives as part of

job descriptions and performance reviews,

starting with the senior management team.

• As in previous years, we surveyed our

colleagues twice to capture any changes in

relation to employee satisfaction, sentiment

and engagement.

Strategic report | ESG | Stakeholders (continued)

Stakeholder

Why we engage

How we engage and outcomes

Communities

An important component of being a

• We engage with the communities in which

good corporate citizen is to recognise

we operate to build trust and understand the

the role we can play in supporting

local issues that are important to them. Key

the communities around us and

areas of focus include:

implementing initiatives to do so.

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.

• In 2023, 16% of MAB employees took

advantage of our volunteering policy and

gave some of their time to volunteer.

Stakeholder

Why we engage

How we engage and outcomes

The Government and

The evolving regulatory landscape

• We engage with the Government and

regulators

has a direct and material impact

regulators through a range of industry

on the day-to-day operation of our

consultations, forums, meetings and

business.

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

Reviewing and strengthening our

policies and processes as part of the

implementation of the Consumer Duty.

Further information on the ways in which the Board engages with stakeholders is set out in the Strategic Report

on pages 43 to 48, in the Directors’ report on pages 84 and 85 and in the Corporate governance report on pages 96

and 97.

Strategic report | ESG | Stakeholders (continued)

Case Study:
Mortgage PA

What Attracted you to MAB?

When I first met with MAB, I was really impressed with

How has MAB helped
you with Consumer Duty?

the plans that they had for our business, as they had

Even when Consumer Duty was only being talked

already done some research on our business before we

about, MAB was already enhancing its systems and

even spoke. Within an hour or so we had a clear vision

processes to make sure that good customer outcomes

for our business and understood what we needed to do

continued to be central in what we do. This work

to hit our goals. Joining MAB has been like rocket fuel

meant MAB was prepared and aligned with the FCA’s

for our business.

The support that you get in terms of business

consultancy, lead generation, engagement with

introducers and technology is really helping us to take

our business forward, even if you are not yet a business

of a certain size, like with other networks.

requirements in most areas and the small changes

required meant we didn’t actually feel like we had to

significantly change what we are doing from one day

to another in order to meet the Consumer Duty. From

the lead up to implementation of the Duty until now,

the team have been fantastic at keeping us informed

about the latest developments, making sure that we are

helping our customers every step of the way.

What’s your experience being
part of the MAB Network?

Our experience is that MAB are very organised but

Why should other businesses join MAB?

also very much like a family. So any time that we have

Other businesses should join MAB because in a market

a question or query on what we need as a business,

that is constantly changing, one should work with a

whether it’s to do with marketing, technology,

business that’s got a proven track record of capturing

compliance or recruitment, there is always someone

opportunities, managing growth, and responding to

at the end of the phone – and if they don’t know the

challenges.

answer, they know the person who to go to.

MAB always want to help you be as successful as

They very much want to support and have helped us

possible. If you’re an ambitious business that wants to

to develop a solid direction for our business. MAB is

grow, then this is definitely the right place to be. MAB is

very good with technology and continuously invest in

very entrepreneurial and always looking at new ways to

developing their tech to stay ahead of the game.

generate new leads, income streams and ways to help

you grow your business.

If you need an expert on a particular subject, then

there’s always someone that you can call to ask for that

support and some guidance.

What tools have helped
you generate more leads?

Tools and technology are definitely areas where MAB

excels. They spend a lot of time on their technology

and that really supports our business, whether that’s

the Home Buying App which has allowed us to recruit

and acquire new clients very early on in their research

and looking at their options; or Platform, which has

allowed us to ingest those clients as they’ve come

back and started looking into their options, through

to the Mortgage Monitoring system which gives our

clients regular updates on a monthly basis around

the value of their property, their options with their

mortgage and booking a call with one of our advisers.

It's been absolutely brilliant. Our clients feel really well

supported and I think it’s what sets us apart from all the

businesses that are our competitors.

Strategic report | ESG | Climate-related financial disclosures

The Group is now within scope of the Companies

for achieving these Goals and related activities (‘ESG

(Strategic Report) (Climate-related Financial Disclosure)

improvement plan’), including capturing the actions

Regulations 2022 (“CRFD”). Such disclosures on how

for reporting on the same

climate change will affect businesses are intended to

assist investors and wider stakeholders in understanding

how climate-related financial risks are managed.

The Board supports this regulation and the TCFD

framework, and has prepared the Group’s CRFD

disclosures to a level of detail that are reflective of the

nature of its business.

The Group’s disclosures address the following four pillars:

Governance

The Group views climate-related risks and opportunities

as growing in importance. The Board is ultimately

responsible for the oversight and compliance with all

applicable laws, together with assessment of the impact

of climate change on risk to the organisation in line with

its reporting obligations.

During 2023 MAB’s Sustainability Committee was

established to promote all related activities of the Group

and ensure appropriate governance. The Sustainability

Committee has taken a lead role in assessing the climate-

related risks the Group faces, as well as implementing

strategic initiatives to mitigate such risks and meet the

evolving expectations of our customers and partners.

- Documenting the corresponding decision making

and governance steps in pursuit of the Goals

- Ensuring that risks (including climate-related) and

vulnerabilities in achieving the Goals are identified,

managed and mitigated across the Group

- Ensuring the efficient removal of any obstructions

throughout the implementation of goals and actions

- Giving regard to the consequences of any decision in

the long term

- Considering in full the need to maintain a reputation

for high standards of business conduct at all times

In terms of CRFD, the Committee reports into: (i) the

Group’s Audit Committee, and (ii) the Board, whilst

also ensuring that significant risks are appropriately

disseminated as part of the Group’s Risk Management

Framework including the Risk and Compliance

Committee (RCC) and the Group Risk Committee (GRC).

ESG more generally has now been integrated into board

discussions as a standing agenda item for its meetings.

Sustainability-related risk management and
strategy

The Sustainability Committee members includes the

The Sustainability Committee is kept abreast of all

following members:

• Head of ESG (Chair)

legal and regulatory developments in connection with

ESG and climate-related issues, including actions and

reporting obligations via our dedicated In-House legal

• Deputy Chief Executive Officer

function, and with support of our external advisers

• Chief Financial Officer

• Chief Risk Officer

• Head of Legal (Deputy Chair)

• Company Secretary

• Chief People Officer

• Financial Accountant

The Sustainability Committee’s scope and

responsibilities include:

and know-how tools. Other key colleagues also garner

intelligence in relation to industry specific political and

economic considerations through active collaboration

in relevant external forums, such as MCAG (‘Mortgage

Climate Action Group’), an initiative by the Association of

Mortgage Intermediaries which aims to help and shape

how intermediaries can support the transition to a net

zero economy.

We have ensured that climate-related risks have been

identified, assessed and quantified in consultation

with colleagues from the Operational Risk function,

- Identifying and disseminating MAB’s Sustainability

members of the Sustainability Committee and the

Goals across the Group

- Developing and implementing the Project Plan(s)

Finance team through continuous interaction as well as

dedicated scenario analysis workshops with all business

functions. The tracking of climate-related risks is fully

integrated into the Group’s risk management function

Metrics and targets

and processes, supported by the TriLine Governance,

Risk and Compliance software which is used across

the Group. This allows us to monitor the impact and

likelihood of risk events that could materialise and affect

the delivery of the Group’s strategic goals, to ensure that

mitigation strategies for any risks deemed material are

implemented quickly and consistently.

The output of our climate-related risk assessment

incorporates the common risk methodology of

correlating both the likelihood and impact of a risk

materialising that applies to all aspects of the Group’s

risk protocols.

For MAB, the key climate-related risks and

opportunities are predominantly driven by sector-

related considerations, such as climate-related impact

on properties in the UK, government guidelines and

legislation regarding the energy efficiency of housing

and considerations relating to the value of such assets.

Furthermore, we recognise that our supply chain plays

an important role in ensuring the seamless operation

of our business, including, but not limited to, our

technology partners.

To the extent that certain climate-related physical risks

could materialise at the Group’s operational locations,

appropriate mitigation measures are in place. All sites

are regularly monitored to ensure they are optimally

utilised and increasingly efficient (to the extent possible)

from an energy consumption and waste perspective.

In terms of transitional risks, the Group has dedicated

teams focused on interacting with key lenders and

other stakeholders with a common interest in evolving

financial services to support consumers as they, and

their homes, face the challenges that climate events

may cause.

The Board has not identified any climate-related

scenarios that are expected to materially impact the

financial position, or resilience, of the Group. Via the

Given the nature of the business, we consider that

there are very limited metrics or targets that reflect the

climate-related risks that the Group may face, other

than physical risks in connection with its footprint from

an operating locations perspective. Those risks are

appropriately tracked, and the extent of the Group’s

emissions are set out in this report.

It is, however, anticipated that the Group may start to

monitor the emissions and energy performance of the

properties of customers it has advised with a view to

understanding the extent of this collective impact more

fully, and informing the Group’s strategy in supporting

such customers in the future.

Climate risk assessment – scenario analysis

During 2023 we carefully scrutinised our practices

across the Group, as well as reflected on our interactions

with customers, lenders, providers and other parties we

engage with, to assess the potential impacts of certain

climate-related scenarios occurring.

This Group-wide initiative was undertaken in

conjunction with our Risk team, the Sustainability

Committee, and key colleagues from our Finance,

Operations, Sales, and Technology teams.

Our analysis (as summarised in the matrix below) has

factored in those tangible ‘physical’ aspects as well as

strategic ‘transition’ elements – all of which may present

certain risks or opportunities.

Primarily, we have considered the scenario of global

temperatures rising by up to 2 degrees, as well as

the potential resulting events, and the Government

strategies and policies towards carbon neutrality that

may derive from this, e.g.:

- Changes to frequency and severity of extreme

weather events, including (but not limited to)

droughts and storms;

Sustainability Committee, the Group will continue to

- Certain geographic locations being compromised,

monitor all relevant risks and scenarios.

e.g., via sea-levels rising, coastal erosion, fluvial floods;

- Government, market, and technology shifts; and

- Other changes to expectations of us as a business.

Strategic report | ESG | Climate-related financial disclosures (continued)

MAB Climate Risk Matrix

Physical risk

Transition risk

High Impact / Low Likelihood

High Impact / High Likelihood

Climate
Risk
Assessment

Low Impact / Low Likelihood

Low Impact / High Likelihood

y
t
i
r
e
v
e
S

Likelihood

No Risk

Facilities - owned

Facilities - leased

Employees (in case of office shut down)

Technology & solution infrastructure
(including external suppliers)

Contents - buildings

Employees living in areas prone to climate
change related events

No Risk

Susceptible to failures of utilities providers
(telecom & electricity)

9 Our AR’s limited knowledge of green mortgage
solutions impacting their ability to provide
comprehensive advice

Failing to adjust to changing market demands
driven by climate change

Lenders not wanting to finance certain
properties

Insurances increasing for at risk properties
(Specific insurance products)

Lack of product availability to finance upgrade
works that improve the environmental
credentials of properties

7 Customer assets at risk from damage due to

14 Lenders moving to net zero models –

climate events

MAB not proactively meeting new standards
(expected of an intermediary)

Physical Risks

Physical climate risk describes the potential for physical

damage and financial losses because of increased

exposure to climate hazards.

UK homes are responsible for a notable proportion

(up to 26%) of emissions. We therefore believe it is

imperative for organisations in our industry to actively

promote the decarbonisation of the UK housing stock to

contribute to achieving the government’s 2050 net zero

Given the geographic locations of the Group’s

ambitions.

operations, acute risks of climate change (flooding,

storms etc.) have to date had no impact on financial

performance. No chronic (longer term) risks are

considered to be relevant.

It is critical that our advisers are fully aware and

equipped to provide our customers with financial advice

that enables them to implement appropriate solutions.

We continue to develop our Learning & Development

Given the locations of the offices of our subsidiaries,

resources with this in mind and work closely with a

there is limited risk that these will be exposed

variety of industry partners in raising awareness of the

to climate-related incidents, such as flooding or

essential role the housing sector can have in achieving

subsidence issues. We did assess the impact of possible

net zero targets.

damage to our physical operations (both owned and

leased premises) due to the climate, and whilst it

could be costly to repair any damage to our offices,

appropriate insurance policies are in place.

It is too early to have a view on the impact on the

Group of any possible material lenders’ responses to

climate-related risks to their assets and operations, but

it is anticipated that this could have a marginal impact

A business continuity plan is in place, including a

on the Group’s finances, for instance where there may

switch to remote working for office-based staff, should

be a failure to evolve an adequate product and service

our physical infrastructure be compromised. Having

offering for those assets that may be most at risk.

completed the cloud migration of our most critical IT

infrastructure throughout 2023, we have effectively

reduced the risk of an adverse impact resulting from

climate-related events to our day-to-day operations

further.

We are fully aware of the need to consider the goals that

lenders and other providers are setting for themselves

and keep closely in touch with them in order to allow

us to respond to changing expectations. In 2023 we

commissioned further work with our ESG consultants

In terms of the harm that customers and their

to gain a more detailed understanding of our carbon

properties may face, we do not believe that this will have

footprint to guide us in setting credible carbon

a direct material impact on the Group’s financial position

reduction targets.

in the short or medium term. However, we are, of course,

extremely sensitive to the difficulties such events could

cause, and are working on strategies to help mitigate

the impact of the UK housing stock on the environment.

Transition Risks

Transition risks result from the relative uncertainty

With regards to transition risk, we currently do not

perceive there to be expectations to change our current

business model. Furthermore, we recognise that with

rising temperatures causing potential damage to

insured customer assets, we may be presented with

additional commercial opportunities for our insurance

created by the global shift towards a more sustainable,

related businesses.

net-zero economy. Transition risks are very broad

Summary

in nature and can be difficult to quantify or model.

Regulatory, geopolitical, and even social pressures

may create material impacts on the operations of a

business, its reputation, and the value of its assets,

amongst other things.

To date, no climate-related risks have been identified

as potentially having a material financial impact on the

Group in the short to medium-term (i.e., up to 5 years).

Strategic report | ESG | Climate-related financial disclosures (continued)

In our role as an intermediary, we believe that it is

Furthermore, we are committed to the decarbonisation

premature to try and assess further impacts to the

of UK housing stock and this may be another critical

Group in the longer term, as they will primarily be a

factor that will help us retain a competitive advantage.

consequence of the decisions by lenders and other

providers in the context of evolving government

policy, technological advancements, and the wider

socio-economic changes.

No significant climate-related transactions have

occurred during 2023. We confirm that neither MAB

nor any member of the Group, has been subject

to any corruption or ESG-related controversies, or

In the longer term, given our close working relationships

enforcement action/sanctioning (or equivalent scrutiny),

with lenders and providers, we believe that the Group

in connection with its operating practices.

is well placed to align with such partners in developing

products and solutions that can support customers in

tackling any effect that climate change may have on

their homes.

Strategic report | ESG | Environmental performance and strategy

The Companies (Directors’ Report) and Limited

This year, we have reported our scope 2 electricity

Liability Partnerships (Energy and Carbon Report)

emissions both using a location-based approach,

Regulations 2018 implement the government’s

i.e. based on grid average emissions factors, and a

policy on Streamlined Energy and Carbon Reporting,

market-based approach. Market-based emissions allow

requiring disclosure of the environmental performance

for a reduced emission figure where, for example, a

of the Group’s assets through calculating the Group’s

renewable energy tariff is used. At MAB we took action

greenhouse gas (“GHG”) emissions and subsequently,

to switch electricity suppliers to be powered by 100%

setting strategies to minimise these emissions.

renewable electricity at our head office as well as all the

The following information summarises the Group’s

First Mortgage offices. We intend for Fluent to follow

environmental performance over the year.

suit as soon as its existing energy contract ends. As

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 2023 GHG Conversion Factors

for Company Reporting in order to calculate emissions

from corresponding activity data.

Our analysis includes the data collected for MAB

and other Group subsidiaries: First Mortgage, Fluent

part of the overall refurbishment of our Head Office

in 2022, we also moved from dual fuel to a new single

fuel high-efficiency Variable Refrigerant system. This

significant investment ensures we can best leverage

our switch to 100% renewable electricity as well as

provide a more consistent and controlled temperature

throughout the building. As such, we believe that a

market-based approach is a more relevant indicator of

the Group’s carbon intensity.

Reporting boundaries and limitations

The GHG sources that constitute our operational

boundary for the reporting period are:

and Vita. Auxilium only has two employees and is

• Scope 1: Natural gas combustion within boilers. MAB

considered to have minimal impact. As at 31 December

does not provide any company cars;

2023, MAB owned 80% of First Mortgage, 84% of Fluent,

• Scope 2: Purchased electricity consumption for our

and 75% of Vita, but we have factored in 100% of the

own use; and

Scope 1, Scope 2, and Scope 3 emissions for these

subsidiaries.

We have calculated energy intensity in tCO2e per
employee per year using the average number of

employees during the year. We consider this to be a

good indicator of the scale of the business and our

energy intensity.

• 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

As part of the data collection, a materiality assessment

gases from office air conditioning are also considered

was applied to determine which indicators were

immaterial. We have estimated Scope 3 emissions

relevant to the Group. We have assessed each indicator

based on the split of Diesel vs. Petrol cars in the UK.

in terms of its impact on the Group and its perceived

importance to stakeholders.

Strategic report | ESG | Environmental performance and strategy (continued)

Performance

The table below shows our Scope 1, 2 and 3 emissions for 2023 and 2022 on both a market basis and location basis.

Energy consumption and associated
GHG emissions (tCO2e)
Scope 1

Fuel consumption

Scope 2

(gas office heating) (kWh)
Associated GHG (tCO2e)
Electricity consumption

(office electricity) (kWh)
Associated GHG (tCO2e)
Total Scope 1 & 2 emissions

and Scope 2

Total Scope 1 In kWh
In tCO2e
Scope 1 and 2 intensity
(tCO2e/ employee/ yr)
Fuel consumption (own cars

Scope 3

MARKET BASIS

LOCATION BASIS

2022

2023 Change

2022

2023 Change

692,986

495,556

126

-28%

692,986

495,556

126

-28%

742,817

869,352

128

255

141

232

17%

10%

-9%

742,817

869,352

144

270

180

271

1,435,803 1,364,908

-5%

1,435,803

1,364,908

255

232

-9%

270

271

17%

25%

-5%

0.26

0.23

-11%

0.27

-2%

for business use) (miles)

450,662

546,827

21%

450,662

546,827

21%

Fuel consumption (own cars

for business use) (kWh)
Associated GHG (tCO2e)
Fuel consumption Scope 3

549,699

661,206

134

158

20%

18%

emissions

134

158

18%

134

549,699

661,206

158

20%

18%

158

18%

Scope 3 emissions intensity
(tCO2e/employee/yr)
Including subsidiaries First

Average

0.14

0.16

16%

0.14

0.16

16%

employees Mortgage, Fluent and Vita

983

1,001

983

1,001

Overall, our Scope 1 and Scope 2 emissions in kWh

In terms of fuel consumption for business use, our

reduced by 5%, which is due to efficiency measures

emissions increased by 18% compared to 2022, or 16%

implemented at Head Office as part of the major

on a per employee basis. This is due to our employees

refurbishment that took place in Q4 2022, including

increasingly returning to more face-to-face meetings

upgrading to a new highly efficient heating and

and pre-coronavirus pandemic ways of working.

ventilation system. In equivalent tonnes of CO2, our
location-based emissions were flat year-on-year due

to a 7% adverse movement in the UK Government’s

2023 GHG Conversion Factor for UK electricity. Taking

into account the supply of 100% renewable electricity

at Head Office and First Mortgage, our market-based

Scope 1 and Scope 2 emissions in tCO2e decreased by
9%, and by 11% on a per employee basis. This follows a

17% reduction year-on-year in 2022.

Sustainability is embedded into our core values and

we have taken a number of steps to reduce our impact

on the environment. These are detailed later in the

Environmental, Social and Governance section on

pages 77 and 78.

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 2024.

Strategic report | ESG | Strategy and improvement plan

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.

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. ESG remains a priority for

MAB and in 2023 we continued to increase our investment in this area. We appointed a new Head of ESG to drive

the implementation of our improvement plan across all business functions and continued to work with our ESG

consultants to ensure ESG is an integral part of what we do and is embedded within our broader Group strategy.

In 2022, we elected to base our roadmap for ESG improvements on the B-Corp framework. B-Corp is a widely

recognised framework to assess a company’s social and environmental performance. Whilst we do not seek

to achieve B-Corp certification at present, the B-Corp framework delivers best practices with regards to

demonstrating accountability for an organisation’s impact on the environment, the economy and people, and we

aim to leverage it to improve our performance across five impact areas:

•

Employees;

Community engagement;

Environment;

Customers; and,

Governance.

Our ESG roadmap set out 71 individual improvement actions, a number of which are described in detail in the

following pages under the headings (i) Employee wellbeing, diversity, equity and inclusion (“DEI”); (ii) Community

engagement and charitable activities; and (iii) Minimising our impact on the environment.

The table below sets out a summary of some of the key areas we have progressed throughout the year under ESG.

Employees

• Significantly strengthened our internal Learning and Development offering

•

Improved our employee engagement methods by hiring an Internal

Communications Manager and introducing a new engagement platform

•

Strengthened our internal policies including maternity leave, flexible working, and in

relation to menopause, neurodiversity and bereavement

•

Launched an Employee DEI group to help us devise our long-term strategy in this

area, MAB U’Nity

•

Introduced Pex, a new Performance Excellence and review process

Community

•

Improved our volunteering policy

• Formalised our financial commitment to the MAB Foundation

•

Established a process that allows us to donate our decommissioned IT equipment to

charity

Strategic report | ESG | Strategy and improvement plan (continued)

Environment

•

Introduced new supplier policies and enhanced our supplier code of conduct to

ensure environmental stewardship throughout the supply chain

•

Further reduced our carbon intensity due to the installation of a highly efficient

single fuel heating and ventilation system at Head Office in late 2022

•

Actively promoted the role of retrofit in helping to decarbonise the UK housing stock

Governance

•

Incorporated social and environmental impact in our mission statement and vision

Created a Sustainability Committee which reports into the Audit Committee, and

feeds into the Group Risk Committee.

• Successfully implemented the Consumer Duty into our operations

• Added ESG as a standing agenda item to Board meetings

•

Introduced ESG related objectives to senior management roles

• Linked senior management remuneration to ESG performance

Customers

•

Strengthened the content on our Green Hub in relation to sustainable living and the

role of housing in climate change

•

Continued to achieve outstanding customer satisfaction ratings of 4.9 (out of 5)

from over 25,000 reviews on Feefo, resulting in us being awarded with the “Platinum

Trusted Service” and “Exceptional Service” awards

•

Introduced a new communications platform “Tribe” to enhance the way we

communicate with our ARs and advisers

We progressed the majority of the identified 71 actions, with a broad spread across all categories:

Progressed actions by impact area

Community

Customers

Environment

Governance

Employees

24%

14%

26%

32%

Employee wellbeing, diversity, equity and
inclusion

■ Employee wellbeing (financial, emotional and physical)

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.

In January 2023 we were delighted to re-open our newly refurbished headquarters. Employee wellbeing and

Diversity, Equity and Inclusion were key considerations during the design phase of this project. We gathered

extensive feedback from our employees to understand their diverse requirements. We now have a state-of-the-

art office space that caters for hybrid working and offers a wide range of working environments with collaborative

spaces, pods and booths, and quiet zones, as well as fixed desking and agile seating so all employees have the

option to work in an environment that suits their needs. This has proved to be an enormous success.

Strategic report | ESG | Strategy and improvement plan (continued)

We have now added a designated wellbeing room,

which is available for employees to use when they

require a moment away from their work or for

employees to participate in prayer. The room is also

stocked with a range of items to support employees

– yoga mats, fans, cold water and a resource library

containing information from various health and

wellbeing organisations, as well as books on a range of

relevant wellbeing topics.

As in previous years, we ran a comprehensive

programme of events and awareness campaigns

throughout the year to promote a healthy lifestyle,

incorporating physical, mental and financial wellbeing.

We offered support to our employees on a wide

range of topics, via both online and in-person events.

We celebrated Employee Appreciation Day with an

early finish and letter box brownies in recognition of

everyone’s hard work.

Once again, we partnered with a number of charities

to bring their expertise inhouse, marking occasions

such as Mind’s ‘Time to Talk Day’ in the Hub; hosting a

cardiopulmonary resuscitation (CPR) training session

with British Heart Foundation; raising awareness during

Men’s Health Week with Prostate Cancer UK, and of

course, everyone’s favourite the Great MAB Bake Off for

MacMillan Cancer Care.

In October, we celebrated Menopause Awareness

Month with the publication of a Menopause Support

Policy, for those experiencing peri-menopausal or

menopausal symptoms. We ran an internal awareness

campaign and organised training for ten Menopause

Champions, who are now available to support and

signpost employees that need help.

The mental health of our workforce continued to

be a key focus for us this year. As well as the internal

awareness campaigns, our team of Mental Health

First Aiders held a number of drop-in sessions

in our wellbeing room, and we rolled out our

Employee Assistance Programme, which includes a

24/7 telephone and text helpline, to our Appointed

Representative network.

In addition to this, we introduced a policy offering

support to those with additional learning needs,

alongside a Neurodiversity Policy to support our

neurodivergent colleagues and offer guidance to their

managers. We also updated our Bereavement and

Compassionate Leave Policy, to offer employees up to

days paid leave, to ensure they are taking the time they

need to grieve and process events.

2023 was a difficult year financially for many, so we ran

sessions to support our employees, including a financial

education webinar with AAG Wealth Management; a

first-time buyer’s clinic; a mortgage advice surgery; and

internal benefits webinars.

We also brought forward the December and January

pay dates to help employees manage their expenses

around the end of year season.

One important project in 2023 was the

introduction of our new intranet platform,

Chatter. As well as a tool for engaging and

communicating with employees, the site

contains a discounts platform to help with the

cost of living and a dedicated wellbeing area

that offers online exercise classes, healthy

recipes and general wellbeing advice.

To best leverage the new platform, our People team also recruited an Internal Communications Manager who is

responsible for all communications across the business, ensuring a coherent approach to how we communicate

and maximise employee engagement. The introduction of Chatter has been a great success and has made a

significant difference to how we communicate as a business.

Recognising the importance of maintaining a healthy work life balance, we continued to offer a hybrid working

approach in 2023, and updated our Flexible Working Policy to introduce the concept of “core hours”, which enables

employees to flex their start and finish times to suit their personal preferences and priorities.

Strategic report | ESG | Strategy and improvement plan (continued)

■ Diversity, Equity and Inclusion (DEI)

MAB 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 written in gender neutral language and are fair,

equitable and consistent with the skills and abilities

of employees and the needs of the business. All of our

job advertisements have been updated to reflect this

approach to DEI, and we encourage applicants from a

diverse talent pool to apply.

Following the launch of our “MABology” in April 2021,

we have been working hard to embed the Mission,

Vision and DNA behaviours into everything we do

at MAB. This has helped us create the foundations

of a diverse and inclusive working environment, by

encouraging employees to take pride in who they

are, celebrate the uniqueness of others and to be

open and honest. In 2023 we continued to promote

the MABology values through our Team Based

Embedding initiative, a series of events which provided

the opportunity for MAB teams to fully immerse

themselves into the MAB DNA and underpinning

behaviours – all aimed at breaking down silos and

creating high performing teams. Over 180 colleagues

attended a Team Based Embedding event in 2023, with

further sessions planned for 2024.

BE AWESOME

DELIVER WOW

BREAK
THE MOULD

SEE THINGS
THROUGH

USE YOUR VOICE

SHARE THE LOVE

Chatter is a great tool for communication, and I like that the tv’s scattered around the offices communicate new

and upcoming people/events etc.

Employee Engagement Survey (October 2023)

We’ve made so much great progress this year on how we communicate. With the launch of Chatter, we’re now in a

great place to spread the word and communicate across the business to a greater degree than we’ve done yet

Employee Engagement Survey (October 2023)

Throughout 2023 we continued to seek regular

feedback from our workforce and conduct regular

Employee Engagement Surveys. For the first time, we

included DEI specific questions in our most recent

survey. 88% of respondents agreed that they had a

good understanding of DEI and 73% believed that MAB

was committed to promoting it.

Over the last 12 months we focussed on reviewing our

policies, processes and initiatives through a DEI lens.

To support working parents, we increased our paid

Maternity, Paternity, Adoption and Shared Parental

Leave offering by two weeks. We also introduced two

paid “guilt free days” for parents returning from Family

Leave, to enable them to better manage the transition

back to work.

We continue to advertise all our vacancies internally,

making use of the additional communication tools

now available to us and have simplified the internal

application process to encourage more internal

applicants. We are pleased with the impact this is

having and last year we saw 20% of new Head Office

roles filled via internal applicants.

In 2023 we also set up a new initiative, MAB U’Nity,

which encompasses a diverse group of 20 with the

objective of furthering MAB’s DEI agenda, and fostering

a workplace culture that celebrates diversity, ensures

equality and promotes inclusion. This will be achieved

by breaking down barriers, championing fair treatment

for all and embracing diversity.

Based on feedback from our employees, we continued

to offer a mixture of virtual and in person social events,

to ensure that everyone feels included. We continued

to foster employee connections through a range of

social events such as Coffee Roulette, online quizzes

and onsite events at our head office. As MAB continues

to grow, and particularly in a hybrid/remote set up,

it is paramount to maintain an environment where

employees are encouraged to meet, interact and share

ideas and knowledge with each other.

Strategic report | ESG | Strategy and improvement plan (continued)

■ Learning and Development (“L&D”)

Feedback includes:

The Group is committed to developing its employees

to enhance our capacity to deliver sustainable growth

and maximise workforce engagement and employee

retention.

In 2023, our new L&D initiatives included a new

“I really loved my experience of the Learn to Lead

programme. Not only does it cover some key topics for

anyone wishing to develop into a leadership position,

but it has been very interesting to discuss these topics

with people from different teams that have different

approach to our induction programme for new starters

experiences and perspectives.” – Nicola Mawby

or those employees that are returning from long-term

(Financial Crime Analyst)

leave. Our new Induction Day kicks off with a tour of our

We also have a growing number of colleagues

head office, followed by a series of briefings including

on the Group’s history, its Mission, Vision and DNA,

and our wellbeing programme. It also includes an

interactive quiz as well as an introduction to our ESG

programme. 60 new colleagues attended the Induction

Day throughout 2023, with the initiative achieving an

overall satisfaction rate of 4.7 / 5.0.

undertaking professional qualifications through taking

advantage of the Apprenticeship Levy, and have

seven colleagues completing the bespoke Level 3 and

Level 5 Women in Leadership Apprenticeship. These

are tailored programmes which aim to enable career

progression and nurture women into leadership roles

and senior positions, and forms part of our strategy to

“The induction at MAB is one of the best that I have

empower women within MAB.

been involved with throughout my working career.

Overall, we won four awards in 2023 for our initiatives in

When we were introduced to the MAB Vision and DNA

DEI and L&D:

it all made complete sense and was something that

I have experienced in my day-to-day working here.

• Barclays D&I Awards – Best Inclusive Culture;

I know more about some people here than I did some

•

MoneyAge Mortgage Awards - Diversity Initiative of

of my colleagues at my previous employment where

the Year;

•

Women’s Leadership Association Awards - Woman

in Management; and

• Money Marketing Awards – Diversity Champion.

I had worked for 13 years. So, thank you to everyone

for making me feel so welcome and part of the MAB

family” - Emma Scarborough (Network Marketing)

2023 saw the launch of the “Mentoring Gang”, a group

created to provide the opportunity for colleagues to

grow and develop their career goals. We currently

have 16 mentors within MAB from a variety of roles

and intend to extend this further in 2024 to include

professional coaching too.

Developing our internal talent remains a priority,

and we pride ourselves for providing a culture that

encourages both personal and professional growth.

Throughout 2023 there were 43 internal promotions at

MAB. Our Learn to Lead programme remains popular.

Consisting of a wide range of topics from effective

communication to conflict resolution and emotional

intelligence to DEI, this internally designed programme

is an important means for us to develop talent. Nine

aspiring leaders graduated in 2023.

■ ESG dashboard

This year we are including the first iteration of an ESG dashboard for MAB. The dashboard will no doubt improve in

future years, however we have sought to incorporate the feedback received on our ESG disclosures, for instance by

adding data on employee attrition.

Environment

Governance

Scope 1 & 2 emissions intensity

Customer complaints as a proportion of

(tCO2e/employee/year)

written volume

0.26

0.23

0.3%

0.2%

2022

2023

2022

2023

Social1

Gender equality

Regretted leavers as
% employees

Gender split of
employees – women

Gender split of
management – women

Volunteering
rate2

52%

50%

42%

n/a

11%

16%

2022

2023

2022

2023

2022

2023

2022

2023

1 Data excludes subsidiaries FMD, Fluent, Vita and Auxilium.

2 % of employees having taken advantage of our volunteering policy. Data was only collected from 2023.

Strategic report | ESG | Strategy and improvement plan (continued)

Community engagement and charitable activities

■ The Mortgage Advice Bureau Foundation
Corporate Social Responsibility is very important to the Group, and we strive to maximise our positive impact on
the communities in which we operate.

Throughout 2023, MAB continued to fund and provide staffing resources to the Mortgage Advice Bureau
Foundation, our grant-giving charity. Established to coordinate MAB charitable activity, the Foundation aims to
create sustainable, positive change within the local communities of our staff and customers.

Issuing grants from £500 to £5,000 to local community projects the Foundation engages with MAB’s employees,
customers and business partners to put forward projects for consideration.

The grant giving purposes remain unchanged as the Foundation looks to support charitable activities in the three
following areas:

1) Health and Wellbeing – projects that 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.

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

Funding applications are only accepted when nominated by a MAB employee, a business partner or one of our
customers.

During 2023:

•

the Foundation received 68 nominations for funding, completing on 13 applications which received funding from

the Foundation of £47,405, and

•

the Foundation helped these 13 projects raise a total of £139,149 through its partnership with Crowdfunder.

This meant that for every £1 donated by the Foundation a further £2 was raised. This is a great outcome which was
achieved in part by encouraging other grant funders to support these projects, including British Airways, M&S,
Sport England and Aviva.

Trustees

The Trustees responsible for the management and administering of the trust according to its purpose are:-

Name

Mortgage Advice
Bureau Foundation role

Other role

Andy Frankish

Trustee and CEO

Lucy Tilley

Trustee and Chair

Chief Financial Officer at Mortgage Advice Bureau

Peter Brodnicki

Ali Crossley

Esther Dijkstra

Fabien Holler

Ben Thompson

Trustee

Chief Executive Officer at Mortgage Advice Bureau

Managing Director, Distribution at Legal and General

Managing Director, Intermediaries at Lloyds Banking Group

Company Secretary at Mortgage Advice Bureau

Deputy Chief Executive Officer at Mortgage Advice Bureau

Tranche Funding

Throughout 2023 the Foundation reviewed its

funding model and in December 2023 it moved to

a tranche funding model. By making a tranche of

money available for charities to apply for by a fixed end

date, the Foundation Committee will be able to review

a larger number of applications for funding at the same

time, thus ensuring that it can apply its robust scoring

criteria consistently to select the most appropriate

projects, maximise funding for the best projects, and

better control the funds available to the Foundation.

Award Winning

We are delighted that in November 2023 the

Mortgage Advice Bureau Foundation received an

industry award in recognition of its Excellence in

Philanthropy and Community Service. The judges

commented on how MAB had set standards for

other businesses to follow in demonstrating a

commitment to Corporate Social Responsibility.

Strategic report | ESG | Strategy and improvement plan (continued)

Case Study:
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Case Study:
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Part of The Archer Project, which has a proven history

Flamingo Chicks is a multi-award-winning charity and

of transforming the lives of the vulnerable and

an inclusive community, giving disabled or ill children

homeless in Sheffield and the wider region, Printed

the opportunity to explore movement through dance.

by Us is a social enterprise that employs people, in

Since the coronavirus pandemic, they have experienced

a supported environment, who have experienced

a surge in demand for their support.

homelessness or similar adversities and most need

help and understanding. Printed by Us uses the craft

of screen-printing to give these vulnerable people the

opportunity to learn new skills, build confidence and

thrive.

The Project was nominated by one of the MAB business

Flamingo Chicks delivers ground-breaking, inclusive

programmes designed to support disabled children

and families through five core pillars:

•

inclusive dance classes;

• peer-to-peer support;

owners in Sheffield who has long worked with The

•

intergenerational volunteering;

Archer Project, volunteering in their soup kitchen.

• youth-led advocacy; and

The project needed new equipment to further develop

the programme and set a target of £10,000 which

• global outreach.

they achieved with the help of a £5,000 grant from the

Flamingo Chicks was looking to raise £20,000 to

Foundation.

increase its programme’s outreach to more children

and shine a spotlight on the importance of supporting

disabled children’s mental and physical health.

Nominated by the MAB business owners in Bristol, the

project secured a £5,000 grant from the Foundation

and through the Crowdfunder platform it vastly

exceeded its fundraising target, raising over £34,000.

This included joint grant funding from the British

Airways Foundation.

■ Employee Volunteering

In addition to grant funding the Foundation also assists

in organising volunteering days with the projects it

supports. MAB gives its employees two fully paid days

per year to work with charities of their choice, and

the Foundation helps link up the projects that need

support with employees. As well as onsite work, the

Foundation also coordinates specialist support that

MAB staff can carry out from their desks including

help with IT, project management, content writing,

marketing and social media. This helps deliver support

faster and across a greater number of staff.

In 2023, we greatly increased the number of organised

volunteering events, enjoying good team participation

rates and great feedback from all volunteers. These

events included:

•

a mock interview day at a school with Making the

Leap, a London-based charity that seeks to improve

social mobility by raising the aspirations of, and

increasing opportunities for, young people;

•

helping Derby Kid’s Camp turn an empty field

into a huge summer camp. Derby Kid’s Camp is

a children’s charity that provides free holidays to

Derbyshire-based young people most in need of a

break; and

•

supporting a local children’s mental health charity,

Bridge the Gap, with its social media strategy and

content creation.

In November 2023, a group of MAB employees spent

a day volunteering at Treetops Hospice, a charity that

provides nursing care and emotional support for adults

and their families in Derbyshire and Nottinghamshire.

Our group of volunteers spent the day at the Treetops

Hospice grounds, clearing leaves from the outdoor

spaces and redecorating the internal corridors. Their

hard work was rewarded with homemade cake and a

tour of the brand new building used for counselling and

support activities for young people and children that

was recently constructed as part of DIY SOS for Children

in Need.

Strategic report | ESG | Strategy and improvement plan (continued)

As in previous years, one of the highlights of our volunteering calendar is helping Derby City Mission with their

Christmas Gift Appeal, helping to provide Christmas presents to Derby’s most vulnerable children.

Overall, 16% of MAB employees volunteered throughout the year.

■ Other charitable activities

MAB Foundation in Numbers

In 2023, in addition to its commitment to the Mortgage

Since launch in September 2022

Advice Bureau Foundation in excess of £40,000, MAB

helped raise the following amounts for charitable

donations:

• £16,334 as part of the MAB Golf Day;

£139,145 total fund-raising target

£159,149 raised for the projects supported

• £8,429 as part of the MAB Awards; and

£59,905 of grants issued

• £1,792 as part of the Derby Marathon.

Fluent also made charitable donations over the

year totaling £40,271 which included £33,205 to the

Education for Children Foundation, whose mission

is to break the cycle of poverty through education,

empowerment and enterprise at the heart of the

community. Education for Children Foundation works

in partnership with disadvantaged families, children

and young adults in Guatemala and Central America.

Finally, MAB now donates its decommissioned mobile

phones and laptops to help the local community.

Once the devices have been thoroughly wiped and

factory reset, they are donated to Derbyshire Refugee

Solidarity, where they are redistributed to people

who otherwise may not be able to take advantage of

modern technology.

80 different projects reviewed
21 gone to application

26 ongoing

33 declined

21 grant funding applications received
3 still fundraising

10 completed

8 declined

29 projects referred by our AR Partners
Plus 18 referrals by Head Office Staff

Plus 3 referrals by customers

Plus 25 referrals by business partners

Minimising our impact on the environment

In 2023, we created a supplier code of conduct which

Reducing our environmental footprint remains an

important priority for MAB, despite our overall footprint

being limited due to the nature of our operations as a

mortgage intermediary business.

In January 2023 we re-opened our head office after

carrying out a major refurbishment project. Minimising

our environmental impact was a central consideration

for this project, as was sourcing products from local

outlines our expectations in terms of our suppliers’

commitments to environmental and ethical standards.

All new suppliers are asked to commit to adhering to

our code of conduct and we are working with our already

established supply chain to do the same retrospectively.

Where possible, we endeavour to work with local

(<50 miles) suppliers in order to minimise the impact of

transport-related emissions.

suppliers where practical, and repurposing furniture.

We continue to operate a hybrid working model that

As part of this refurbishment, we installed a new single

fuel high efficiency heating and ventilation system,

as well as new high efficiency LED lighting operating

allows our colleagues to work from home up to two days

per week, and the use of electric vehicles is encouraged

through our Electric Vehicle chargers at head office.

‘on motion’ sensor activation throughout the building.

■ Waste reduction

These measures contributed to reducing the Group’s

Scope 1 and Scope 2 emissions intensity by a further 11%.

MAB continues to monitor the production of waste

from its facilities and our waste management supplier

We no longer use a gas supply in our head office, and

only works with “Zero waste to Landfill” partners in its

100% of our electricity at our head office and First

own supply chain. Effectively this means that 95% of our

Mortgage offices comes from renewable sources. We

general waste is used for energy production, with the

commissioned two EPC reports, before and after the

remaining 5% being recycled appropriately. This includes

refurbishment, with our energy performance rating

paper, ink and cardboard and we also have recycling

having improved from 84 (D rating) to 39 (B rating).

stations where our colleagues can discard used batteries.

We will continue to work with specialist consultants

throughout 2024 to improve further our carbon

reporting framework based on science-based targets

and drive the Group’s sustainability agenda.

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

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

ARs, advisers and their clients are required to print

0.45

0.40

0.35

0.30

0.25

0.20

0.15

0.10

0.05

0.00

0.38

0.31

-18%

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

0.26

-17%

0.23

-11%

use plastic drinking cups.

■ Promoting energy efficient homes

2020

2021

2022

2023

With an estimated 20%+ of carbon emissions in the

UK being attributed to the housing sector and given

the UK Government’s Net Zero strategy by 2050, we

recognise that we are uniquely positioned to influence

change and have a significant positive impact on the

UK’s overall carbon footprint.

Strategic report | ESG | Strategy and improvement plan (continued)

In 2023 we continued our work with

our adviser community to ensure

that all our advisers are kept abreast

of legislation changes and industry

concerns, whilst working with our

lending partners to collaborate on

what the future product landscape

might look like in this respect.

We are currently in the process of

building a new proposition that

addresses the financing needs of

customers who wish to explore

energy efficiency retrofit options,

and also helps them to navigate

the complexities of sourcing and

installing the right equipment by

having a nationwide solution under

which customers can make the

desired environmentally-friendly

changes to their homes.

Our Head of ESG joined the

Mortgage Climate Action Group’s

steering committee in July 2023,

an initiative by the Association of

Mortgage Intermediaries designed

to help raise awareness of this area.

We also continued to enhance

the content of our Green Hub to

promote cost effective ways to

reduce utility bills and educate

consumers on the subject of “Green

Mortgages”.

To enable us to assess whether a

Anti-bribery policy

particular activity is at high risk

of facilitating modern slavery or

human trafficking:

MAB highly values its reputation for

ethical behaviour and upholding

the utmost integrity. We have a

•

MAB holds a Risk Register of

zero tolerance approach to bribery

all operations, and regularly

and corruption and ensure that

reviews this in the context of

all of our employees and suppliers

supply chain and business

are adequately trained to limit our

operations.

exposure to bribery by:

•

There are no high-risk activities

•

Setting out clear anti-bribery

identified in relation to modern

and corruption policies;

slavery or human trafficking.

•

Providing mandatory training to

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

all employees;

•

Encouraging our employees

to be vigilant and report any

suspected cases of bribery in

accordance with the specified

procedures; and

•

Escalating and investigating

instances of suspected bribery

and assisting the police or other

appropriate authorities in their

investigations.

Gender pay reporting

key suppliers and outsourcers are

The Equality Act 2010 (Gender

well-established, with appropriate

Pay Gap Information) Regulations

governance and oversight

procedures in place.

We also review our salaries on

an annual basis to ensure our

2017 requires all employers with

250 or more employees in the UK

to publish details of their gender

pay gap.

Modern slavery

employees are not paid below

The aim of this legislation is to

MAB recognises that it has a

responsibility to take a robust

approach to the issues derived from

the national minimum wage. We

achieve greater transparency about

provide a competitive package of

gender pay difference. The analysis

benefits to all employees.

is based on data as at 5 April of each

the Modern Slavery Act 2015 and

A copy of our Modern Slavery and

has implemented processes that

Human Trafficking Statement can

are aimed at ensuring that there is

be found on our website at www.

no slavery or human trafficking in

mortgageadvicebureau.com/modern-

its business or supply chains.

slavery-and-human-trafficking.

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.

78
78

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.

On behalf of the Board

Lucy Tilley

Chief Financial Officer

19 March 2024

Governance | Board of Directors

The Board comprises three Executive and four Non-Executive Directors. A short biography of each Director is set

out below:

Katherine Innes Ker,
Aged 63
Non-Executive Chair

Peter Brodnicki,
Aged 61
Chief Executive Officer

Katherine has extensive
executive and non-executive
director experience. She is Senior
Independent Director of Forterra
plc and of Stelrad Group plc,
Non-Executive Director of Ground
Rents Income Fund 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, Vistry plc, 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 54
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 52
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. Lucy is also Chair of
the MAB Foundation.

Nathan Imlach,
Aged 54
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.

David Preece,
Aged 63
Non-Executive Director

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 Jones,
Aged 60
Independent Non-
Executive Director

Mike joined Lloyds 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, with his
final role as Managing Director,
Intermediaries & Specialist Brands
since 2010. He led 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 businesses.
He was also responsible from
March 2019 for LBG's European
retail bank operating in Germany
and The Netherlands, a role that
sees him continue as Chair of the
Supervisory Board of Lloyds Bank
GmbH.

Governance | Company information

Company:

Directors:

Mortgage Advice Bureau (Holdings) plc

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

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

Deutsche Numis
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

This has not been included within the Group financial

together with the financial statements for the year

statements as no obligation existed at 31 December

ended 31 December 2023. For the purposes of this

2023. If approved, the final dividend will be paid on

report, the expression “Company” means Mortgage

29 May 2024 to ordinary shareholders whose names are

Advice Bureau (Holdings) plc and the expression

on the register on 26 April 2024. Dividends paid during

“Group” means the Company and its subsidiaries.

the year amounted to £16.0m and were in respect of

■ Results and business review

the final dividend for the year ended 31 December

2022 and the interim dividend for the year ended

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

31 December 2023.

■ Going concern

general insurance products. The principal activity of the

The Directors have assessed the Group’s prospects

Company is that of a non-trading holding company.

until 31 December 2025, taking into consideration the

The review of the business, operations, principal risks

current operating environment, including the impact

and outlook are included in the Strategic report on

of the ongoing geopolitical and macroeconomic

pages 4 to 79. The financial statements set out the

uncertainty and inflationary pressures on property and

results of the Group on pages 118 to 193.

lending markets. The Directors’ financial modelling

In 2023, despite the market downturn the Group

continued to deliver its strategy to achieve year-on-year

growth in market share, irrespective of prevailing

market conditions. In a market where gross new first

considers the Group’s profit, cash flows, regulatory

capital requirements, borrowing covenants under its

current debt facility and other key financial metrics

over the period.

charge mortgage lending was down 29%:

These metrics are subject to sensitivity analysis,

• Group revenue increased by 4% to £239.5m; and

•

our market share of new first charge mortgage

lending increased by 11% to 8.3%.

As expected given the prevailing market conditions

during the year, adviser numbers at 31 December 2023

decreased by 4% to 2,158 (2022: 2,254), and adjusted

EBITDA decreased by 8% to £26.7m (2022: £29.1m).

Group profit after taxation for the year amounted to

£12.5m, down 3% on the previous year. Income tax

expense for the year was £3.7m, an effective rate of

23.0% (2022: 26.4%).

■ Dividends

The Board is pleased to propose a final dividend of

14.7p per share (2022: 14.7p). This brings the total

proposed dividend for the year to 28.1p per share

(2022: 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

(2022: £8.4m).

which involves flexing a number of key assumptions

underlying the projections, including the effect of the

ongoing 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 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.

■ Events after the reporting date

The Panel on Takeovers and Mergers (“the Panel”)

There were no material events after the reporting

period, which have a bearing on the understanding of

the consolidated financial statements.

■ Directors

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 2023 the

Concert Party held ordinary shares, in aggregate,

representing 19.8% of the issued share capital of the

A list of the current serving Directors and their

Company.

biographies is given on page 80. Katherine Innes Ker,

Non-Executive Chair, and Lucy Tilley, Chief Financial

Officer, will step down after the 2024 Annual General

Meeting and accordingly will not seek re-election. The

other Directors will all stand for re-election at the 2024

■ Substantial shareholdings

At 31 December 2023, the Company had been notified

of the following interests representing 3% or more of its

issued share capital:

Annual General Meeting.

■ Directors’ indemnity

Shareholder

Holding

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.

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

19.48%
18.21%
9.88%

8.06%
5.05%
4.90%
3.33%
3.10%
3.01%

■ Share capital

■ Directors’ interests

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

2023 is shown in note 25. 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.

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

■ Rule 9 of the City Code

such procedures have operated effectively.

Under rule 9 of the City Code, where any person

■ Related party transactions

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.

Details of related party transactions are given in

note 28.

Governance | Directors’ report (continued)

■ Employee engagement

In particular, maintaining an active dialogue and

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 2023 can be found on in the Environmental, Social

and Governance section of the Strategic Report on

pages 63 to 70.

supporting our ARs is key to our business and in 2023 we

continued to invest in this area. 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.

We offer two leadership programmes to our ARs. These

were originally designed for our internal management

team but in 2022 we decided to open them to our

ARs’ business leaders. The Leadership Programme is

a 9-month long course for business owners and their

established leadership teams which covers a broad range

of topics including Emotional Intelligence, Succession

Planning and Conflict Resolution. The Learn to Lead

We continue to share the success of the Group with our

programme is an 8-month long course aimed to support

employees. MAB operates a WorkSave Pension Plan

new or aspiring future leaders by providing them with the

available to all employees and contributes to the pension

knowledge and tools to become effective leaders. Both

schemes of Directors and all employees. The Group

programmes are proving very popular.

operates an Unapproved Incentive Plan and a Share

Incentive Plan, details of which are given in the Directors’

Remuneration Report and the financial statements.

All of our ARs also enjoy the support of MAB’s Regional

L&D consultants, a dedicated resource to create bespoke

learning solutions based on the needs of the advisers and

The Mortgage Advice Bureau (Holdings) plc Share

market conditions. The aim of our L&D consultants is to

Incentive Plan (“the SIP”) enables eligible employees

create and deliver content on a wide range of topics from

to buy shares in the Company in a tax advantageous

lead generation to mindset - all with the aim to improve

manner by having an amount deducted from

results and knowledge across the board and ensure

pre-tax salary each month. In addition, the Company

we remain best-in-class when it comes to servicing our

grants participating employees matching shares.

customers.

The SIP is continuing to prove popular among our

employees despite the cost-of-living crisis, with MAB

employee participation now standing at 47% (2022:

48%), with an average monthly contribution of £107

(2022: £111).

■ 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

Several initiatives were introduced and built upon

throughout the year to maximise engagement with

our ARs and advisers, as we continued our investment

across all of our major support functions, including sales,

recruitment, marketing, regulatory and compliance.

More details on how we have interacted with our ARs

in 2023 are set out in the Stakeholder section of the

Strategic Report on pages 49 and 50.

commitments. The Board is regularly updated on wider

In recognition of our approach to learning and

stakeholder engagement feedback to stay abreast of

customers, suppliers and shareholders’ insights into the

issues that matter most to them and our business.

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

■ Principal risks and uncertainties

development needs to business performance.

Strong and sustainable relationships with our product

providers are also fundamental to our success. We hold

regular roundtable events with them where topics such

The Directors’ view of the principal risks and

uncertainties facing the business is summarised in

the Strategic report on pages 28 to 42. A full review of

financial risk management can be seen on pages 168 to

as business process improvements are discussed as a

172.

group. This open dialogue has for instance contributed to

■ Corporate governance

the implementation by our technology team of a more

seamless mortgage submission process. We continue our

plans to extend our direct-to-lender submission routes

further for mortgage applications.

Fluent also 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.

A full review of Corporate governance appears on

pages 86 to 97.

■ 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 22 May 2024.

Maintaining good relationships with suppliers is also

important to us. In 2023 we paid 74% of all our invoices

within 30 days and won a Fast Payer Award.

■ Community engagement and charitable donations

As set out in the Audit Committee report on page 93,

the Audit Committee intends to decide on a policy on

the frequency of tendering and the length of tenure of

external auditors to ensure that the independence of

the external auditor is, and is seen to be, safeguarded,

Corporate Social Responsibility is important to the Group,

in light of the revised QCA Corporate Governance Code

and we try to engage with the communities in which we

published in November 2023.

operate in a meaningful and impactful manner.

■ Directors’ statement as to disclosure of information

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 72 to 76.

■ Political donations

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

The Group has made no political donations during the

aware of that information. To the best of each Director’s

year (2022: £nil).

■ Annual General Meeting

knowledge and belief, there is no relevant audit

information of which the Company’s auditor is unaware.

The Annual General Meeting (AGM) of the Company

On behalf of the Board

will be held on 22 May 2024. The notice of meeting

is included with this document and contains further

Lucy Tilley

information on the ordinary business to be proposed at

Chief Financial Officer

the meeting.

19 March 2024

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.

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

As a Board we believe that good governance is crucial to

business of the Group.

the delivery of our strategic objectives. We aim always to

■ Operation of the Board

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).

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

■ Board composition and independence

including acquisitions and disposals. The Board is

The composition of the Board changed during 2023,

with the resignation of independent Non-Executive

Director Stephen Smith, who stood down at the

2023 AGM in May. Prior to this the Board of Directors

comprised three Executive Directors, four independent

Non-Executive Directors and one non-independent

Non-Executive Director. There remain three

independent Non-Executive Directors. The Directors’

biographies on page 80 demonstrate a range of

experience which is key to the success of the Group.

Three 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

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.

on their independence. Nathan Imlach is the Senior

The roles of Chair and Chief Executive Officer are

Independent Director.

distinct with clear division of responsibilities. The

Chair’s role is to ensure good corporate governance,

and her responsibilities include leading the Board,

■ Induction, training and performance evaluation

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

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:

conflict of interest procedures.

• their contribution is relevant and effective;

All Executive and Non-Executive Directors retire and

• they are committed; and

put themselves forward for re-election annually at each

• where relevant, they have maintained their

Annual General Meeting.

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.

independence.

Board evaluation

In 2023 a Board evaluation was undertaken. This assessed

the progress made since the 2020 assessment and

areas for further improvement in the operation and

performance of the Board, and of the Board Committees.

A summary of the findings of the review of the Board’s,

Committee’s and Chair’s performance and overall

effectiveness is detailed below. 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. The Schedule of Matters

Reserved for the Board was reviewed and approved with

minor changes.

Governance | Corporate governance (continued)

The effectiveness evaluation process focused on the

Induction programme

following areas:

The Board has an induction programme so that new

• composition, mix of skills and experience, diversity

directors receive a formal induction on their appointment

and inclusion;

• procedures and operation of the Board and

Committees;

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

• culture and tone from the top;

information. The induction programme includes meetings

• stewardship and governance; and

• strategy.

with the Executive Directors, Company Secretary,

members of the Executive board and other members of

management, meetings with external advisers including

The evaluation confirmed that the Board understands

our Nominated Adviser and auditors as appropriate, and

its strengths and weaknesses, and can respond

access to Board and Committee papers and minutes.

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.

■ Meetings and attendance

■ 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 reviewed annually. The Chair of each committee

provides a report to the Board of any matters that are

considered significant and that lie outside the scope of the

committee’s delegated responsibility and authority.

All directors are expected to attend all Board meetings and meetings of Committees of which they are members.

In 2023, the number of Board meetings held was higher than scheduled as the Group faced the challenges

caused by the difficult trading conditions. 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

Mike Jones
Stephen Smith1
David Preece2

Board

Audit

Remuneration

Nomination

GRC

13 (13)

12 (13)

13 (13)

12 (13)

13 (13)

5 (7)

13 (13)

6 (6)

–

6 (6)

2 (3)

–

6 (6)

3 (5)

–

2 (2)

0 (2)

–

2 (2)

1 (1)

2 (2)

7 (7)

5 (7)

7 (7)

2 (3)

7 (7)

Notes:
1.

Stephen Smith stood down as a director at the 2023 AGM on 24 May 2023 and his attendance is shown up to that date.

David Preece stood down as a member of the Audit and Remuneration Committees following the Company’s 2020 AGM. He is invited to
attend these Committees but in the event of a vote, does not participate.

■ Audit Committee

Activities during the year

The Audit Committee comprises Nathan Imlach (Chair),

The Audit Committee met five times during the year,

Katherine Innes Ker and Mike Jones. Nathan Imlach

where it considered the significant financial and audit

is a Chartered Accountant and the Board is satisfied

issues, the judgements made in connection with the

that all members of the committee have recent and

financial statements and reviewed the narrative within

relevant financial experience. We have considered

the Annual Report and the Interim Report.

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.

During the year the Audit Committee continued to

monitor the operation of 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 Group access to greater skills externally, while

The responsibilities of the Audit Committee are

having the ability to expand or reduce our internal audit

outlined in the Committee’s Terms of Reference, with

activities to meet the ongoing demands of the business.

its key responsibilities being:

The Audit Committee also considered the appointment

• to review the reporting of financial and other

of, and fees payable to, the external auditor and

information to the shareholders of the Company and

discussed with them the scope of the interim review

to monitor the integrity of the financial statements;

and annual audit.

• to review the Group’s accounting procedures and

provide oversight of significant judgement areas;

• to review the effectiveness of the Group’s internal

financial systems and controls;

• 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.

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;

• Fraud risk in recognition of revenues;

• Review of 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

Committee meetings are normally attended by

units tested for impairment;

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.

• Review of the valuation of put and call options

associated with recent business combinations;

• 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 and approval of the internal audit plan for the

There is a cross membership with the Group Risk

year; and

Committee, to help ensure that agendas are aligned,

and key information is shared appropriately across the

Board Committees.

• Monitoring the progress of previous issues raised

by the internal and external auditors, to ensure a

satisfactory completion and assurance level.

Governance | Corporate governance (continued)

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 2023 and other matters considered by the committee included:

Goodwill and intangible assets

As set out in Note 14 to the Group financial

The committee considered the impairment reviews

statements, at 31 December 2023, the Group had

carried out by management. These reviews focused

goodwill of £53.9m (2022: £53.9m). Under IAS 36,

on the assumptions underlying the calculation of the

these balances are assessed annually for impairment.

value in use of the cash generating units tested for

Impairment testing requires the application of

impairment. The underlying cash flow assumptions

judgement, largely around the assumptions that are

were challenged by management and the

built into the calculation of the value in use of the

committee, having regard to historical performance.

cash generating unit being tested for impairment.

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.

Valuation of put and call options

In the year ended 31 December 2022, the Fluent

For investments in subsidiaries with put and call

and Auxilium business combinations had put and

options attached to them, the committee reviewed

call options associated with the acquisition of the

the most recent valuation report and considered

minority interest at a future date.

whether the impact had been correctly recognised.

The valuation of the put and call options gives rise

The committee concluded that the present values

to key inherent risks with respect to management

of the put and call options included in the financial

judgements and estimates, such as discount rates

statements are appropriate and the impact of

and projected financial results.

changes in valuation have been correctly recognised.

Clawback provision

As detailed in Note 23, the Group recognises

The committee considered and challenged the

a provision for the estimated cost of repaying

nature of the provision, the potential outcomes and

commission income received upfront on protection

the prior history of cancellations to assess whether

policies that may lapse in the four years following

the provision recorded is prudent and appropriate.

issue. This provision is an estimate and the actual

amount and timing of future cash flows are

dependent on future events.

The committee discussed with management the

key elements of judgement to assure themselves

as to the adequacy and appropriateness of the

Management reviews this provision at each reporting

provision. Following this discussion, the committee

date to ensure it is measured at the current best

was satisfied that the judgements exercised were

estimate of the expenditure required to refund the

appropriate and that the provision was fairly stated

liabilities. Any difference between the amounts

in the financial statements.

previously recognised and the current estimate

is recognised immediately in the statement of

comprehensive income.

Use of alternative performance measures

The Group has identified certain measures that

The committee considered the measures and felt

it believes will assist in the understanding of the

that these alternative performance measures are

performance of the business. These measures are

those considered by management to be important

not defined under IFRS but can be used, subject

comparables and key measures used within the

to appropriate disclosure in the Annual Report and

business for assessing performance. They are not

Accounts. These alternative performance measures

substitute for, or superior to, any IFRS measures.

are net revenue, administrative expenses ratio,

The committee was also satisfied that the disclosure

adjusted operating profit, adjusted profit before tax,

of the alternative performance measures was

adjusted EBITDA, adjusted EBITDA margin, adjusted

appropriate.

fully diluted EPS adjusted earnings per share,

headline cash conversion, adjusted cash conversion,

and net debt, as set out on pages 190 to 193.

Governance | Corporate governance (continued)

Other matters

In addition to the above matters, the committee

The committee considered whether the forecast

assessed whether each entity and the Group as a

financial performance would result in an adequate

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’.

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 Financial Crime control framework, preparedness for the

new Consumer Duty rules, how material IT change programmes are being managed, migration of the MIDAS

Pro platform to the cloud, cyber security, complaints handling and oversight of Appointed Representatives; and

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

key risks facing the business and its sector as a whole in 2024 and 2025, including training and competence

and outsourcing. 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

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

The Committee met six times during the year, with key

management letter and detailed presentations are

items considered including:

made to the Committee by the Company’s auditor at

least once a year.

The QCA published an updated version of its Corporate

Governance Code (QCA Code 2023) in November

2023. On auditor tendering, while there are no specific

requirements for smaller quoted companies, larger

listed companies are required to put their audit out

to tender every ten years with an external auditor’s

tenure being limited to twenty years. In this light,

• The Group’s remuneration policy and its operation;

• Annual review of the Executive Directors’ and Senior

Managers’ base salaries and bonus arrangements;

• The impact of the continuing cost of living crisis and

support for employees, with a focus on the lower paid,

maintaining for those employees a minimum excess of

£1,000 per annum over the National Minimum Wage

and the National Living Wage;

the Committee intends to decide on a policy on the

• Benchmarking of Executive directors’ base salaries

frequency of tendering and the length of tenure of

and total potential compensation by an external

external auditors to ensure that the independence of

remuneration consultant on behalf of the Committee;

the external auditor is, and is seen to be, safeguarded.

■ Remuneration Committee

• Awards to be granted under the share option and share

incentives schemes operated by the Company; and

As at 31 December 2023, the Remuneration Committee

• Vesting of executive share options.

comprised Katherine Innes Ker (Chair), Nathan Imlach,

and Mike Jones.

The Committee continues to review the Group’s

long-term incentive plans to ensure it can continue to

The Committee meets not less than twice a year,

attract, retain and incentivise appropriately qualified

and more frequently as required. It is responsible for

staff to achieve its goals.

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,

Further information about the Committee and the

Group’s remuneration policy is as set out on pages 98

to 104 in the Directors’ Remuneration Report.

including performance-related bonuses and share

■ Nominations Committee

options. The Committee administers the operation

of the share option and share incentive schemes

established by the Company.

The Nominations Committee comprises Katherine

Innes Ker (Chair), Nathan Imlach, David Preece, Mike

Jones and Peter Brodnicki.

The members of the Remuneration Committee

have no personal interest in the outcome of

The Committee is responsible for:

their decisions and seek to serve the interests of

• reviewing the size, structure and composition

shareholders to ensure the continuing success of

(including the skills, knowledge, experience and

the Company. All members of the Remuneration

diversity) of the Board and to make recommendations

Committee are independent Non-Executive Directors.

to the Board with regard to any changes;

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.

• 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.

Governance | Corporate governance (continued)

The Committee works in close consultation with the

Independent Non-Executive Director

Executive Directors, with its main priorities being

the Board structure and composition, ensuring that

we have the right skills and experience to fulfil our

responsibilities, and management development and

succession planning.

The Nominations Committee met twice during the

year, to consider succession planning for the Executive

Directors, to note appointments to and succession

A search consultant was appointed by the Nominations

Committee to conduct a search for an additional

independent Non-Executive Director. The intention is to

identify and appoint a suitable candidate as soon as is

reasonably possible and ideally by the time of the 2024

AGM so that the balance of the Board between executive

and Non-Executive directors is maintained. The new Non-

Executive would chair the Remuneration Committee.

planning for the executive team, and to consider

■ Group Risk Committee, and Risk and Compliance

the development of succession planning for the

Committee

Non Executive Directors. The criteria for assessing

the level of diversity at the Board and in the senior

management team were broadened to include

socio-economic background, nationality, educational

attainment, gender and age, reflecting key principles

within the QCA Code.

The Group Risk Committee (GRC) comprises Mike

Jones (Chair), Katherine Innes Ker, Nathan Imlach,

David Preece, Peter Brodnicki, Ben Thompson and

Lucy Tilley. In 2022 the Group appointed Paul Gill as

Chief Risk Officer (CRO) who attends GRC.

The GRC met seven times in 2023 to review and

The current Board has an equal number of Executive

consider the following:

Directors and Independent Non Executive Directors,

including the Chair.

Board changes

Chief Financial Officer

• 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;

Following the resignation of the Chief Financial Officer

• The preparation for and implementation of

(CFO) in January 2024, a search for a successor was

Consumer Duty regulation;

initiated, and a search consultant with a specialism in

• Regulatory consultation papers and impending

Financial Services was appointed. The CFO is currently

legislation changes;

serving her six-month notice period and a further

announcement will be made in due course.

Chair succession

After nearly ten years as Chair, Katherine Innes Ker will

retire at the conclusion of the AGM on 22 May 2024.

• Senior Managers and Certification Regime (SM&CR);

• General Data Protection Regulation (GDPR);

• Cyber Security;

• Operational Resilience;

Katherine joined the Board in October 2014 and led it

• M&A activity

through the successful IPO in November of that year.

• Environmental, Social and Governance (ESG),

Katherine will be succeeded by Mike Jones, who joined

vulnerable clients, diversity, and any other relevant

the Board in March 2021. The Nominations Committee,

regulatory themes;

led by Nathan Imlach as Senior Independent Director,

performed an assessment of Mike Jones’ suitability as

Chair. An external consultant was commissioned to

conduct the assessment, and as a result, the Nominations

Committee was able to recommend to the Board that

Mike Jones be appointed as Chair Elect to succeed

• The effectiveness of the Group’s procedures on

whistleblowing, anti-bribery and corruption, and anti

money-laundering;

• Restructuring undertaken following the Fluent

acquisition; and

Katherine as Chair at the conclusion of the 2024 AGM.

• Other major risk considerations and relevant

upcoming legislation.

The Risk and Compliance Committee (RCC) is chaired

MAB. This is enabled by an automated solution that will

by the Chief Risk Officer. The RCC is a management

support more proactive identification of key controls,

committee and meets monthly and reports into the

control gaps and enable Control Owners to annual

GRC. The remit of the RCC include reviewing the

attest to the design and operational effectiveness of

adequacy and effectiveness of the Company’s internal

controls across MAB.

controls, compliance and risk management systems,

ensuring that the Company is fulfilling its regulatory

responsibilities. As and when required, the RCC

escalates major risk events and seeks guidance from

the GRC.

During 2023, two new management committees were

established to focus on system resilience and the ability

to recover from any incidents, and on product and

pricing activity across the business.

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

• The Resilience and Recovery Committee (RRC) is

revisions where risks exceed risk appetite; and

chaired by the Head of Operational Risk and meets

regularly assessing of risks within their remit.

bi-monthly, reporting into the RCC. The remit of the

RRC is to review the adequacy and effectiveness

of the Company’s resilience, internal systems and

controls and ensuring that it is fulfilling the relevant

regulatory responsibilities in relation to resilience.

• 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.

• The Product and Pricing Committee (PPC) is chaired

They are responsible for providing oversight and

by the Chief Transformation Officer. The PPC meets

challenge of the first line’s day-to-day management,

monthly and reports into RCC on a quarterly basis

monitoring and reporting of risks to both senior

and enables MAB to meet our regulatory obligations

management and in RCC.

under the Consumer Duty in relation to product and

pricing activity.

Risk Management Framework

• Third line: our external audit partners and Internal

Audit Manager are responsible for providing

independent assurance to both senior management

The Group’s risk framework is designed to ensure

and the Audit Committee as to the effectiveness

that risks are identified, managed and reported

of the Group’s governance, risk management and

effectively. Since the appointment of the Chief Risk

internal controls. Internal Audit is managed and

Officer (CRO) in 2022 there has been continued

delivered by the Internal Audit Manager who manage

investment from MAB to further enhance the Group’s

the relationship with MAB’s co-source internal audit

risk management framework. This includes the

supplier.

adoption and development of TriLine Governance,

Risk and Compliance solution (TGRC), which offers an

effective portal for the tracking of risk-related activity,

the appointment of a Risk Data Analyst and the newly

developed role of the Risk and Resilience Manager

Output from the three lines of defence model is

reported into the Risk & Compliance Committee on a

monthly basis.

Statement of Risk Appetite (SORA)

reporting into the Head of Operational Risk.

The Statement of Risk Appetite outlines the amount

Following the re-design of the risk taxonomy in

September 2022, we have developed and are

implementing an enhanced control framework across

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

Governance | Corporate governance (continued)

the Statement of Risk Appetite is formally reviewed and

Under the new rules, MAB is required to ensure that

approved by the Risk & Compliance Committee, Group

customers receive products that provide “fair value”

Risk Committee and the Board.

and to challenge product providers where required.

The Group retains a balanced overall appetite for

Good customer outcomes have always been central

risk, ensuring that its internal controls support

to MAB’s strategy. MAB created workstreams based

business growth expectations and mitigate risk to

on the four consumer outcomes, with an additional

appropriate levels.

Risk assessment

one focused on customer vulnerability in order to

ensure that area had appropriate focus throughout the

project work.

All risk owners within MAB are required to identify and

assess their departmental risks on a quarterly basis.

The MAB team made good progress against the

TriLine has been configured to align with MAB’s risk

planned activities, which includes reviewing our

taxonomy and supports risk owners with the following:

processes, policies, communications, and customer

• Risk identification

journey, to ensure we achieve good customer

outcomes through our interactions and engagement

• Assessment of risks and the potential consequences

with customers and that where changes were required,

• Management of significant risks

• Reporting and monitoring of risks

these were implemented across the business ahead of

the 31 July 2023 implementation date.

• Ownership of the risk management framework

To drive these changes, we appointed a Board

Champion and also an Executive Champion for

The Group’s risk assessment process includes the

Consumer Duty, the latter is the ultimate sponsor,

assessment of the inherent and residual likelihood and

promoter, and supporter of the new regulation. This

impact of a risk materialising. Reporting is presented

was a significant project for MAB, but one we believe

to the Risk and Compliance Committee following

furthered strengthen the Group and also the housing

quarterly reviews with relevant information being

and mortgage markets in which we trade.

presented to GRC and the Board.

Consumer Duty

Since implementation, GRC has received regular

updates from the CRO in relation to the on-going

The Financial Conduct Authority published its final

Consumer Duty activity within the business, including

rules on the Consumer Duty in July 2022, with rules

agreeing the plan in place with regard to the

taking effect on 31 July 2023. The MAB Board approved

submission and approval of the Annual Consumer Duty

the Group’s Consumer Duty Implementation Plan in

Board Report.

2022 which set out the intended plan and approach

to enable MAB to meet the requirements of the duty

by the deadline as established by the FCA. Progress

against the plan was overseen by GRC.

The enhanced customer outcomes focus principally

encompasses the following four areas:

MAB has been actively engaged throughout in the

work of the Association of Mortgage Intermediaries

(AMI) trade body on Consumer Duty and its

requirements.

■ Communications with shareholders

The Board is committed to maintaining

• products and services;

communication with the Company’s shareholders.

• price and value;

• consumer understanding; and

• consumer support.

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/

The Directors believe that the Group has internal

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

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 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 89 and 94.

The Group maintains appropriate insurance cover

and reviews the adequacy of the cover regularly, in

conjunction with the Group’s insurance brokers.

The Board is ultimately responsible for the Group’s

On behalf of the Board

system of internal control and for reviewing its

effectiveness. Such systems are designed to manage

Lucy Tilley

rather than eliminate risks and can only provide

reasonable not absolute assurance against material

Chief Financial Officer

misstatement or loss.

19 March 2024

Governance | Directors’ remuneration report

■ Remuneration committee

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 annual bonus performance targets for 2023 were

based 90% on adjusted profit before tax, and 10% on

personal business objectives (PBOs), including ESG

measures related to good customer outcomes. These

are detailed below. In 2024 the proportion of the annual

bonus linked to PBOs will increase to 20%, with the

remaining 80% based on adjusted profit before tax.

The Remuneration Committee will consider including

further meaningful ESG-related metrics within the

incentive arrangements including the LTIP performance

criteria from 2025 onwards.

The members of the Committee as at 31 December

■ Remuneration activity in response to the continuing

2023 were Katherine Innes Ker (Chair), Nathan Imlach,

cost-of-living crisis

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

In 2023 the average pay rise awarded to employees across

MAB was 6%. In response to the continuing cost of living

crisis and the sustained high rates of inflation, salary raises

were weighted towards the lowest paid employees and

the premium over the National Minimum Wage and the

National Living Wage was maintained.

through participation in short and long term incentive

■ Salaries and fees

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.

Salaries for Executive Directors are reviewed

annually, taking into account increases in base pay

for employees, and the effective date for changes in

Directors’ remuneration is 1 January.

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 Non-Executive Directors. No

Director is permitted to participate in decisions about

The Committee agreed that from 2023 onwards the

his or her own remuneration.

Executive Directors’ remuneration structure would be

rebalanced in favour of longer term objectives. The

maximum potential payout under the annual bonus

was reduced from 200% to 150% of base salary and the

maximum annual award under the LTIP was increased

from 100% to 150% of base salary. This structure better

aligns the remuneration with best practice and with

shareholder interests, and will be maintained in 2024.

In Q4 2023 the Committee commissioned an

independent review of the current levels of

remuneration and benchmarked these against other

companies of similar size and complexity. This was

the first external benchmarking study that had been

commissioned by the Company since IPO.

This review was commenced prior to Lucy Tilley’s

These new performance targets reflect the importance

resignation but this did further highlight the

to the Group of a robust governance framework

importance of ensuring that the levels of remuneration

that puts the customer first and the work that has

are appropriately set within the Company to ensure

been carried out towards the implementation of the

management is fully motivated and retained, especially

Consumer Duty, as well as our sustainability goals. They

given the outstanding growth track record of the

were recommended by and measured with input from

Company and in a highly competitive talent market.

the Group Risk Committee.

Following the review of the current levels of

The performance against the PBOs was assessed

remuneration the following changes to the base

and the payout on those elements was 12.5% of

salaries of the Executive Directors were proposed and

base salary (out of a maximum of 15% of base salary)

implemented with effect from 1 January 2024:

for both the CEO, Peter Brodnicki, and the Deputy

• Peter Brodnicki, CEO - £450,000, an increase of 9.7%;

and

• Ben Thompson, Deputy CEO - £360,000 an increase

of 32.1%.

Following the review of roles and responsibilities

it was determined that setting a salary for Ben

Thompson that equated to 80% of Peter Brodnicki’s

CEO, Ben Thompson. No bonus was paid to the

CFO, Lucy Tilley in consequence of her resignation,

submitted in January 2024.

The adjusted profit before tax element of the annual

bonus was based on certain adjusted Profit before Tax

targets. These were missed and no bonus was paid for

this element.

was appropriate. It should be noted that although

2023

the benchmarking data was used to inform the

Committee’s deliberations it only formed one part of

a much broader consideration when determining the

appropriate salary levels.

Percentage
of annual
bonus

Percentage
of Base
Salary at
Maximum
Bonus

Bonus paid
as
percentage
of Base
Salary

Annual base fees for the Non-Executive Directors were

increased from 1 January 2024 by 6% in line with the

average salary increase across MAB.

■ Annual bonus

Adjusted

PBT

PBOs

Total

90%

10%

100%

135%

15%

150%

12.5%

More details are set out in the single total figure of

In 2023, the Remuneration Committee introduced

remuneration table below.

Personal Business Objectives (“PBOs”) to the Executive

Directors’ annual bonus structure, in line with best

practice. The annual bonus for 2023 was based

on adjusted PBT for 90% of the bonus and on the

achievement of five PBOs for the remaining 10%.

Annual Bonus 2024

The balance between the financial objectives and the

Personal Business Objectives was changed with more

emphasis placed on the achievement of the PBOs, with

a weighting of 80% and 20% respectively. The financial

Out of the five PBOs, three were ESG criteria linked to

objectives are again based on adjusted Profit before

good customer outcomes, the implementation of the

Tax and the PBOs include objectives derived from ESG

Consumer Duty regulation, and the Group’s overall ESG

metrics and reflect again the importance of continuing

score improvement against the B-Corp framework.

progress and improvement in key areas relating to

Two PBOs were based on the achievement of essential

good customer outcomes and sustainability measures.

elements of the Group’s technology roadmap.

Governance | Directors’ remuneration report (continued)

■ 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 31 May 2023, 296,375 options over ordinary shares

of 0.1 pence each in the company were granted to the

Executive Directors and Senior Management of MAB

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

under the Mortgage Advice Bureau Executive Share

MAB is committed to the provision of an inclusive

Option Plan. The exercise of the options is subject to

working environment and ensuring the fair reward

the achievement of a performance condition based

of all employees, regardless of seniority across the

on earnings per share (EPS) criteria. Subject to the

business. In addition to the Executive Directors and

achievement of the performance condition, these

senior management, the Committee considers wider

options will vest on 2 April 2026. The exercise price for

workforce remuneration and reward.

these options is 0.1 pence, being the nominal cost of

■ Share Incentive Plan

ordinary shares.

The 2020 LTIP award vested in April 2023. 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. Both the TSR and EPS

performance conditions were fully achieved, and the

award therefore vested in full.

■ Service contracts

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 continuing to be popular

among our employees despite the cost-of-living crisis,

It is the Group’s policy for all Executive Directors to have

with MAB employee participation standing at 47%

contracts of employment that contain a termination

(2022: 48%). The average monthly contribution in 2023

notice period not exceeding twelve months. The

was £107 (2022: £111).

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, continues until terminated by

either party giving not less than six months’ notice to

the other party.

100

101

■ Single total figure of remuneration for each director

The Directors’ remuneration payable in respect of the year ended 31 December 2023 was as follows:

Basic salary and fees

Annual
bonus

Pension
contributions1

Benefits2

Long-term
incentive plan3

Total

2023
£000s

2022
£000s

2023
£000s

2022

2022
£000s £000s £000s

2023

2022
£000s £000s

2023
£000s

2022
£000s

2023
£000s

2022
£000s

Executives
Peter Brodnicki
Ben Thompson
Lucy Tilley

Sub-Total

Non-Executives
Katherine Innes Ker
Nathan Imlach
Stephen Smith4
David Preece5
Mike Jones

Sub-Total

Total

410
272
268

950

100
49
17
42
49

257

1,207

373
248
239

860

89
44
42
68
42

286

1,145

51
34
–

–
–
–
–
–

–

282
282
242

806

–
–
–
–
–

–

41
32
32

106

–
–
–
–
–

–

37
25
24

–
–
–
–
–

–

806

106

2
3
2

–
–
–
–
–

–

2
7
5

–
–
–
–
–

–

263
263
205

732

–
–
–
–
–

–

298
298
232

827

–
–
–
–
–

–

769
606
506

993
859
741

1,881

2,593

100
49
17
42
49

257

89
44
42
68
42

286

732

827

2,138

2,878

Notes:
1.

Pension includes the cash value of Company contributions to defined contribution pension plans and cash payments in lieu of pension
contributions. In previous years we included payments in lieu of pension contributions as part of basic salary and fees, so 2022 has been
restated.
The benefit package of each Executive Director includes the provision of life assurance, a travel allowance, the option of private medical
assurance under a Group scheme, and the option to participate in the Group's Share Incentive Plan which includes a matched element.

3. Total market price of shares under option vesting during the year at their vesting date, less any option exercise price payable.
4. Stephen Smith stepped down after the 2023 AGM on 24 May 2023.
5.

For 2022, basic salary and fees figure included Non-Executive Director fees of £38,400 and an additional consultancy fee of £30,000. No consultancy fee
was paid in 2023.

■ Directors’ interests in shares

As at 31 December 2023, 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

Ordinary shares of 0.1p

10,401,472
924,800
89,474
29,576
22,096
16,304
3,000

18.21
1.62
0.16
0.05
0.04
0.03
0.01

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

100

101

Governance | Directors’ remuneration report (continued)

■ 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. The interests of

the Directors during 2023 were as follows:

Director
Peter
Brodnicki

Ben
Thompson

Lucy Tilley

Date
granted

May-23
Jun-22
Apr-21
Jul-20
Jul-19
Apr-18

May-23
Jun-22
Apr-21
Jul-20
Jul-19

May-23
Jun-22
Apr-21
Jul-20
Jul-19
Apr-18

(1)
(2)
(3)
(4)
(5)
(6)

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

(1)
(2)
(3)
(4)
(5)
(6)

Exercise
price
£

At 1 Jan
2023
No.

Forfeited/
Granted Exercised Not vested
during
during
the year
the year
No.
No.

during
the year
No.

At 31 Dec
2023
No.

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
0.001
0.001
0.001

–
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

83,146
–
–
–
–
–

55,230
–
–
–
–

54,236
–
–
–
–
–

–
–
–
–
–
–

–
–
–
–
–

–
–
–
–
–
–

–
–
–
–
–

–
–
–
–
–
–

83,146
36,262
19,766
37,108
33,717
9,957

219,956

55,230
24,097
19,766
37,108
33,717

169,918

54,236
23,231
17,570
28,862
26,223
9,957

160,079

Notes:
(1) Unapproved Option scheme - first date exercisable is 2 April 2026, last date exercisable is 31 May 2031.
(2) Unapproved Option scheme - first date exercisable is 6 April 2025, last date exercisable is 6 June 2030.
(3) Unapproved Option scheme - first date exercisable is 1 April 2024, last date exercisable is 1 April 2029.
(4) Unapproved Option scheme - first date exercisable is 22 April 2023, last date exercisable is 22 July 2028.
(5) Unapproved Option scheme - first date exercisable is 1 July 2022, last date exercisable is 1 July 2027.
(6) Unapproved Option scheme - first date exercisable is 11 April 2021, last date exercisable is 10 April 2026.

All the LTIP awards are subject to a three-year performance period. For the 2021 and 2022 awards, 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). The 2023 award is based solely on an

EPS performance condition. Vested and unvested LTIP awards are subject to a formal malus and clawback

mechanism.

102

103

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

between threshold and maximum.

2021 award:

Metric

Vesting (% of maximum)

Weighting Performance
(% of award) condition

Threshold Maximum

25%

100%

Adjusted EPS

50%

Absolute growth in adjusted earnings

Total shareholder return (TSR) 50%

Average absolute annual growth in TSR

over the three years from grant

15%

per share over the three-year

performance period

40%

70%

2022 award:

Metric

Vesting (% of maximum)

Weighting Performance
(% of award) condition

Adjusted EPS

Total shareholder return

50%

Compound annual growth rate in EPS

Compound annual growth rate in

Threshold Maximum

25%

15%

100%

26%

(TSR)

2023 award:

shareholder value

10%

20%

Metric

Vesting (% of maximum)

Weighting Performance
(% of award) condition

Adjusted EPS

100%

Compound annual growth rate in EPS

Threshold Maximum

25%

100%

10%

Note 30 to the financial statements contains details of all options granted to directors and employees as at

31 December 2023. All of the share options were granted for nil consideration.

102

103

Governance | Directors’ remuneration report (continued)

■ Total shareholder return performance graph

The graph below illustrates the total shareholder return (TSR) for the period from 1 January 2015 to 31 December

2023 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.

£1,200

£1,000

£800

£600

£400

£200

£0
Jan-15 Jan-16 Jan-17 Jan-18 Jan-19 Jan-20 Jan-21 Jan-22 Jan-23 Jan-24

Mortgage Advice Bureau Plc

FTSE AIM All-Share index (rebased)

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 29 December 2023 was 820 pence and the

range during the financial year was 500 pence to 880 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 2023 AGM, 55.4% of the votes cast were in favour of accepting the

Remuneration Report. Following the AGM we consulted with a number of shareholders and understand that

there were concerns with the payment of transaction-related bonuses in 2022. We have set out in the revised

remuneration structure adopted from 2023 onwards, a rebalancing of incentives in favour of longer-term

objectives, and confirm that in future, bonuses directly related to the completion of a transaction will not be

offered.

This Remuneration Report will be subject to an advisory vote at the 2024 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

19 March 2024

104

105

Governance | Directors’ responsibilities for the financial statements

The Directors are responsible for preparing the

The Directors are responsible for keeping adequate

Directors’ report, strategic report and the financial

accounting records that are sufficient to show and

statements in accordance with applicable law and

explain the Group’s and the Company’s transactions

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

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

International Accounting Standards in conformity with

the requirements of the Companies Act 2006 that

irregularities.

are applicable to companies that prepare financial

The Directors are responsible for ensuring the annual

statements in accordance with IFRSs.

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.

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.

104

105

Governance | Independent auditor’s report to the members of

Mortgage Advice Bureau (Holdings) plc

Opinion on the financial statements

statements section of our report. We believe that the

In our opinion:

audit evidence we have obtained is sufficient and

appropriate to provide a basis for our opinion.

• the financial statements give a true and fair view of

Independence

the state of the Group’s and of the Parent Company’s

affairs as at 31 December 2023 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;

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

• the Parent Company financial statements have been

with these requirements.

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.

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

We have audited the financial statements of Mortgage

Directors’ assessment of the Group and the Parent

Advice Bureau (Holdings) plc (the ‘Parent Company’)

Company’s ability to continue to adopt the going

and its subsidiaries (the ‘Group’) for the year ended

concern basis of accounting included:

31 December 2023 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 material

and significant accounting policy information.

• 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 financial reporting framework that has been

the Going concern assessment which included

applied in the preparation of the Group's financial

assumptions about the potential impact this could

statements is applicable law and UK adopted

have on revenue (mainly from purchase mortgages)

international accounting standards. The financial

and possible cost saving measures.

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

• We examined the existing agreement of the

Revolving Credit Facility and reviewed the nature of

the facility, repayment terms, covenants and attached

conditions. We assessed its continued availability

to the Group through the going concern period

and checked the completeness of management’s

covenant assessment;

• We verified the mathematical accuracy of the going

concern model for the period to 31 December 2025;

International Standards on Auditing (UK) (ISAs

• We considered whether there were any indicators of

(UK)) and applicable law. Our responsibilities

other sources of finance not considered by Directors

under those standards are further described in the

in their assessment;

Auditor’s responsibilities for the audit of the financial

106

107

Conclusions relating to going concern
(continued)

• 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.

The Directors’ assessment forecasts that the Group

will maintain sufficient liquidity throughout the going

concern assessment period in the base case scenario

and will not breach banking covenants. Under the

Group's severe but plausible scenario, which includes

a significant reduction in performance throughout the

going concern period, liquidity remains and there is no

• We assessed the appropriateness of the duration

of the going concern assessment period to

breach of covenants.

31 December 2025 and considered the existence

We have not identified any climate related risks that

of any significant events or conditions beyond this

would materially impact the Group’s forecasts to

period based on our procedures on the Group’s cash

31 December 2025.

flow forecasts and from knowledge arising from other

areas of the audit;

• We have reviewed publicly available information on

the housing 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.

• We reviewed the disclosures made relating to going

Controllable mitigating actions available to

management over the going concern assessment

period include reductions to non-declared dividend

payments.

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.

concern included in the financial statements in order

Our responsibilities and the responsibilities of the

to assess the appropriateness of the disclosures and

Directors with respect to going concern are described

conformity with reporting standards.

in the relevant sections of this report

Overview

Coverage

99% (2022: 99.1%) of Group profit before tax
100% (2022: 99.9%) of Group revenue
99.8% (2022: 99.4%) of Group total assets

Key audit matters (KAM)

2023

2022

Revenue Recognition

Clawback Liability

Valuation of put/call options over the purchase of minority

Interests in subsidiaries

Acquisition of subsidiaries

Goodwill Impairment assessment in relation to Fluent CGU

Acquisition of subsidiaries is no longer considered a KAM because

there were no subsidiary acquisitions made during the year.

✔

✘

✔

Materiality

Group financial statements as a whole

£1,036,000 (2022: £1,006,000) based on 5% of average profit before tax for the last

three years (2022: 5% Profit before tax).

✔

✘

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106

Governance | Independent auditor’s report to the members of

Mortgage Advice Bureau (Holdings) plc (continued)

An overview of the scope of our audit

• Review of the minutes of Board and Audit Committee

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

meetings and any other relevant party and other

papers related to climate change and performed a

risk assessment as to how the impact of the Group’s

commitment as set out in the Strategic report may

affect the financial statements and our audit.

management override of internal controls, including

The Group has explained in the Strategic report how

assessing whether there was evidence of bias by the

they have reflected the impact of climate change in

Directors that may have represented a risk of material

their financial statements. The Group did not identify

misstatement.

The Group is made up of the Parent Company and

its subsidiaries. The significant components were

determined to be MAB Limited and MAB Derby Limited

together ‘(MAB Core’), First Mortgage Direct Limited

(‘FMD’) and Project Finland Topco Limited and its

subsidiaries (‘Fluent Group’). 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.

Climate change

Our work on the assessment of potential impacts of

climate-related risks on the Group’s operations and

financial statements included:

• Enquiries and challenge of management to

any climate risk that would materially impact the

carrying values of the Group’s assets or have any other

impact on the financial statements. These disclosures

also explain where governmental and societal

responses to climate change risks are still developing,

and where the degree of certainty of these changes

means that they cannot be taken into account when

determining asset and liability valuations under the

requirements of UK adopted International Accounting

Standards. Our audit effort in considering the impact

of climate change on the financial statements was

focused on evaluating management’s assessment of

the impact of climate risk, physical and transition, and

their climate commitments. As part of this evaluation,

we performed our own risk assessment to determine

the risks of material misstatement in the financial

statements from climate change which needed to

be considered in our audit. We also challenged the

Directors’ considerations of climate change risks in

understand the actions they have taken to identify

their assessment of going concern and viability and

climate-related risks and their potential impacts on

associated disclosures. Where considerations of climate

the financial statements and adequately disclose

change were relevant to our assessment of going

climate-related risks within the annual report;

concern, these are described above.

• Our own qualitative risk assessment taking into

Based on our risk assessment procedures, we did not

consideration the sector in which the Group operates

identify there to be any Key Audit Matters materially

and how climate change affects this particular sector;

impacted by climate-related risks.

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109

An overview of the scope of our audit (continued)

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.

• We assessed whether the Group’s revenue

recognition policies are in accordance with the

applicable accounting standards.

The Group’s revenue comprises of commissions

(including procuration fees), client fees, protection

and general insurance and other income.

Group total revenue £240m (2022: £231m).

Revenue recognition is a significant audit risk as it

• We performed walkthroughs of each significant

stream of revenue and confirmed the existence of

key controls around the recognition of revenue.

• For a sample of transactions, we independently

obtained direct confirmations of the revenue and

transactions amounts from third party providers.

is a key driver of the return to investors and there

• For a sample of commission income, we obtained

is a risk that there could be manipulation, fraud or

the third-party reports supporting the transactions

omission of amounts recorded in the system. This risk

and traced back to cash receipts.

is applicable for all revenue streams across the Group

as detailed above.

For these reasons we considered revenue a key audit

matter.

• We recalculated a sample of the procuration fees

using third party reports obtained independently

and agreed to cash received.

• We agreed a sample of client fees to providers’

statements and cash receipts.

• We performed cut-off testing for the period before

and after the year end with reference to underlying

documents such as rebate reports, reclaims files

and evidence of management’s assessment of the

point of revenue recognition.

• We performed full and specific scope audit

procedures over this risk area in components

which have revenue.

Key observations:

Based on the procedures performed, we have

not identified any material misstatements in the

revenue recognised in the year.

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108

Governance | Independent auditor’s report to the members of

Mortgage Advice Bureau (Holdings) plc (continued)

An overview of the scope of our audit (continued)

Key audit matters (continued)

Key audit matter

How the scope of our audit addressed the key
audit matter

Clawback liability

Our procedures included the following:

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 23 to the

financial statements.

• We assessed whether the accounting treatment

adopted for the clawback liability was in line with

the applicable accounting standard requirements.

• We evaluated the design and implementation of

the financial reporting process relevant for the

The clawback liability is an estimate of the commission

determination of the clawback liability.

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.

• We tested the appropriateness of the model and

its logical application and then independently

recalculated the results.

The Group has recognised a clawback liability of

• We compared the data relating to unearned

£10.3m (2022: £8.0m).

There is significant risk of material misstatement due

commission and assumptions such as future lapse

rates and lapse rate history to third party reports.

to fraud or error as result of the estimation uncertainty

• For other inputs and assumptions such as age

inherent in the valuation of the clawback liability.

profile of the commission received, the success

The valuation of clawback liability is subject to

significant judgements and estimates with specific

reference to the determination of the Lapse and

Recovery rate applied.

The risk is over the clawback liability recorded in the

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.

three significant components: MAB Core, FMD and

• We reviewed the historic payback patterns and

performed testing on the historical accuracy of

management’s estimate by comparing clawbacks

during the current financial year to the prior year

provision raised.

Key observations:

Based on the work performed we have not identified

any material misstatement in the clawback liability.

Fluent.

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111

An overview of the scope of our audit (continued)

Key audit matters (continued)

Key audit matter

How the scope of our audit addressed the key
audit matter

Valuation of put/call options over the purchase of

Our procedures included the following:

minority interests in subsidiaries

Refer to note 5 to the financial statements.

The acquisition of Fluent in 2022 had put and call

options attached to the purchase of the minority

interests exercisable at a future date. The valuation of

the put and call is driven by inputs that are subject

to management’s judgement and estimation

uncertainty.

We have identified a significant risk of material

• We evaluated the design and implementation of

the financial reporting process relevant for the

Valuation of put/call options.

• We tested that the valuation methodology is

appropriate.

• With the assistance from our valuation experts, we

assessed the appropriateness of the assumptions

being cash flow projections and discount rate

against the ones adopted by management as part

of the impairment of goodwill assessment where

misstatement due to error over the remeasurement

relevant.

of the redemption liability.

The cash flow projections (including the EBITDA

projections) used in the remeasurement of the

• We assessed the reasonableness of cashflow

forecasts and its assumptions by reviewing the

governance process in light of the potential impact

redemption liability are subject to management’s

of macro-economic factors.

judgements.

The Group had a redemption liability fair value gain

of £4.5m (2022:£nil) of which £4.7m relates to Fluent

• We reviewed the accounting treatment to check

that it is in line with accounting standards (IFRS 2/

IAS 19 and IFRS 9).

(loss of £0.2m relates to Auxilium put and call options).

Key observations:

Based on the work performed we have not identified

any material misstatement in the redemption

liability.

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111

Governance | Independent auditor’s report to the members of

Mortgage Advice Bureau (Holdings) plc (continued)

An overview of the scope of our audit (continued)

Key audit matters (continued)

Key audit matter

How the scope of our audit addressed the key
audit matter

Goodwill impairment assessment in relation to

We performed the following procedures:

Fluent CGU

Refer to note 2 with the detailed disclosure in note 14

to the financial statements.

The Carrying value of Goodwill is £53.9m (2022:

£53.9m). Of this amount, £37.0m relates to the Fluent

cash generating unit (‘CGU').

We identified a significant risk of fraud and error

on the recoverability of the goodwill relating to

Fluent CGU because it’s trading performance was

significantly below budget.

In determining the recoverable amount, the value in

use calculation is subject to estimation uncertainty

due to the significant estimates and judgements

involved in determining the discount rate, Long-

term growth rates (‘LTGR’), and the future cashflows

(including EBITDA projections).

• With the involvement of our valuation experts,

we assessed the appropriateness of the valuation

methodology applied and key assumptions.

• We inspected the Group’s approved strategic

plans.

• We compared the Group’s key assumptions to

externally derived data and other macro-economic

factors such as interest rates and inflation rates.

• We performed a sensitivity analysis which

considered reasonably possible changes in the key

assumptions and their impact on the valuation.

• We independently developed our own estimate

of a range of reasonably possible discount rate,

EBITDA projections and revenue growth rate for

the CGU, based on external market data and our

understanding of the business, and compared this

to what was used in the model.

As a result, we concluded this was a key audit matter.

Key observations:

We have not identified any indicator that would

suggest the assumptions and judgements applied

in the valuation model are unreasonable.

112

113

Our application of materiality

materiality, to determine the extent of testing needed.

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 based on 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

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

2023
£m

2022
£m

2023
£m

2022
£m

Materiality

£1,036,000

£1,006,000

£332,000

£268,000

Basis for determining
materiality

5% of average profit

5% of profit before tax,

5% of Total

before tax for the last

excluding write off of

investments

three years

investment in non-

listed equity shares

Rationale for the benchmark
applied

Average profit before

Profit before tax was

As the Parent

tax was determined

determined to be

Company is a

to be the most

the most appropriate

holding company,

appropriate benchmark

benchmark as the

it was considered

as the Group is listed

Group is listed with

appropriate to

with profitability seen

profitability seen as

determine materiality

as the main interest of

the main interest of

based on Total

investors.

2023

£777,000

investors.

investments.

2022

2023

2022

£754,000

£249,000

£201,000

Performance materiality

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.

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113

Governance | Independent auditor’s report to the members of

Mortgage Advice Bureau (Holdings) plc (continued)

Our application of materiality (continued)

in the Annual Report and Financial Statements other than

Component materiality

the financial statements and our auditor’s report thereon.

Our opinion on the financial statements does not cover

We set materiality for each significant component of

the other information and, except to the extent otherwise

the Group, including the parent company, based on

explicitly stated in our report, we do not express any form

a percentage of between 31% and 95% (2022: 43% and

of assurance conclusion thereon. Our responsibility is

79%) of Group materiality dependent on the size and

to read the other information and, in doing so, consider

our assessment of the risk of material misstatement

whether the other information is materially inconsistent

of that component. Component materiality ranged

with the financial statements or our knowledge obtained

from £237,000 to £738,000 (2022: £436,515 to £792,000).

in the course of the audit, or otherwise appears to

In the audit of each significant component, we further

be materially misstated. If we identify such material

applied performance materiality levels at 75% (2022:

inconsistencies or apparent material misstatements,

75%) of the component materiality to our testing to

we are required to determine whether this gives rise

ensure that the risk of errors exceeding component

to a material misstatement in the financial statements

materiality was appropriately mitigated.

themselves. If, based on the work we have performed,

Reporting threshold

We agreed with the Audit Committee that we would

we conclude that there is a material misstatement of this

other information, we are required to report that fact.

report to them all individual audit differences in excess

We have nothing to report in this regard.

of £51,000 (2022: £20,000). We also agreed to report

differences below this threshold that, in our view,

warranted reporting on qualitative grounds.

Other information

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

The Directors are responsible for the other information.

report on certain opinions and matters as described

The other information comprises the information included

below.

Strategic report
and Directors’
report

In our opinion, based on the work undertaken in the course of the audit:

• 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.

Matters on which
we are required
to report by
exception

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 components 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.

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115

Responsibilities of Directors

our procedures are capable of detecting irregularities,

As explained more fully in the Directors’ responsibilities

including fraud is detailed below:

statement, the Directors are responsible for the

Non-compliance with laws and regulations

preparation of the financial statements and for being

Based on:

satisfied that they give a true and fair view, and for such

internal control as the Directors determine is necessary

• Our understanding of the Group and the industry in

to enable the preparation of financial statements that

which it operates;

are free from material misstatement, whether due to

• Discussion with management and those charged

fraud or error.

with governance, legal counsel and Audit Committee;

In preparing the financial statements, the Directors

• Obtaining and understanding of the Group’s policies

are responsible for assessing the Group’s and the

and procedures regarding compliance with laws and

Parent Company’s ability to continue as a going

regulations.

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

We considered the significant laws and regulations

to be IFRS as adopted by the UK, UK tax legislation,

Companies Act 2006 and the AIM Listing Rules.

operations, or have no realistic alternative but to do so.

The Group is also subject to laws and regulations

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

where the consequence of non-compliance could

have a material effect on the amount or disclosures

in the financial statements, for example through the

imposition of fines or litigations.

are free from material misstatement, whether due

We identified such laws and regulations to be the

to fraud or error, and to issue an auditor’s report that

health and safety legislation and the Anti-Bribery Act

includes our opinion. Reasonable assurance is a high

including fraud, corruption and bribery.

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 based on these

financial statements.

Extent to which the audit was capable of detecting
irregularities, including fraud

Irregularities, including fraud, are instances of

Our procedures in respect of the above included:

• Review of minutes of meetings of those charged with

governance for any instances of non-compliance with

laws and regulations;

• Review of correspondence with regulatory and tax

authorities for any instances of non-compliance with

laws and regulations;

• Review of financial statement disclosures and

agreeing to supporting documentation;

non-compliance with laws and regulations. We design

• Involvement of tax specialists in the audit;

procedures in line with our responsibilities, outlined

above, to detect material misstatements in respect

of irregularities, including fraud. The extent to which

• Review of legal expenditure accounts to understand

the nature of expenditure incurred.

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115

Governance | Independent auditor’s report to the members of

Mortgage Advice Bureau (Holdings) plc (continued)

Auditor’s responsibilities for the audit of the
financial statements (continued)

Fraud

We assessed the susceptibility of the financial

statements to material misstatement, including fraud.

Our risk assessment procedures included:

• Enquiry with management and those charged

with governance also considered Audit Committee

regarding any known or suspected instances of fraud;

• 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

• Obtaining an understanding of the Group’s policies

of non-compliance with applicable laws and

and procedures relating to:

regulations;

• Detecting and responding to the risks of fraud; and

• In addressing the risk of fraud through management

• Internal controls established to mitigate risks

related to fraud.

• Review of minutes of meetings of those charged with

governance for any known or suspected instances of

fraud;

• Discussion amongst the engagement team as to

how and where fraud might occur in the financial

statements;

• Performing analytical procedures to identify any

unusual or unexpected relationships that may

indicate risks of material misstatement due to fraud;

• Considering remuneration incentive schemes

and performance targets and the related financial

statement areas impacted by these;

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

recognition and in accounting estimates such as

the clawback liability and goodwill impairment

assessment 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.

• At a component level, our full and specific scope

component audit team’s procedures included

inquiries of component management, journal entry

testing and focused testing, including in respect of

Based on our risk assessment, we considered the areas

the key audit matter of revenue recognition.

most susceptible to fraud to be revenue, management

override of controls and clawback liability.

Our procedures in respect of the above included:

We also communicated relevant identified laws and

regulations and potential fraud risks to all engagement

team members who were all deemed to have

appropriate competence and capabilities and remained

• Testing a sample of journal entries throughout the

alert to any indications of fraud or non-compliance with

year, which met a defined risk criteria, by agreeing to

laws and regulations throughout the audit.

supporting documentation;

• Assessing significant estimates made by

management for bias;

• Reviewing the financial statement disclosures and

testing to supporting documentation to assess

compliance with relevant laws and regulations

discussed above;

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

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117

Auditor’s responsibilities for the audit of the
financial statements (continued)

Fraud (continued)

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.

David Gonnelli
(Senior Statutory Auditor)

For and on behalf of BDO LLP, Statutory Auditor

London, UK

19 March 2024

BDO LLP is a limited liability partnership registered in

England and Wales (with registered number OC305127).

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117

Financial statements | Consolidated statement of comprehensive income

for the year ended 31 December 2023

Note

Revenue

Cost of sales

Gross profit

Administrative expenses

Share of profit of associates

Costs relating to First Mortgage, Fluent and Auxilium options

Amortisation of acquired intangibles

Acquisition costs

Restructuring costs

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 contingent consideration

Loss on fair value measurement of derivative financial instruments

Operating profit

Finance income

Finance expenses

Gain on remeasurement of redemption liability

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 122 to 182 form part of these financial statements.

2023
£’000

239,533

(169,371)

70,162

(46,674)

848

(4,277)

(5,160)

(159)

(539)

–

(190)

14,011

291

(2,610)

4,486

16,178

(3,719)

12,459

13,467

(1,008)

12,459

23.6p

23.5p

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

118

119

Financial statements | Consolidated statement of financial position

as at 31 December 2023

Assets
Non-current assets
Property, plant and equipment
Right of use assets
Goodwill
Other intangible assets
Investments in associates and joint venture
Derivative financial instruments
Trade and other receivables
Deferred tax asset

Total non-current assets

Current assets
Trade and other receivables
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
Redemption liability
Lease liabilities
Derivative financial instruments
Loans and other borrowings
Deferred tax liability

Total non-current liabilities

Current liabilities
Trade and other payables
Clawback liability
Lease liabilities
Loans and other borrowings
Corporation tax

Total current liabilities

Total liabilities

Total equity and liabilities

Note

12
13
14
14
15
15
18
24

18
19

25
26
26
26
26

20
5
13
15
21
24

20
23
13
21

2023
£’000

5,799
2,283
53,885
51,474
12,301
302
353
719

127,116

9,321
21,940

31,261

158,377

57
48,155
20
6,045
15,921

70,198
4,211

74,409

2,642
2,793
1,805
183
12,426
11,417

31,266

35,225
10,331
931
5,824
391

52,702

83,968

158,377

The notes on pages 122 to 182 form part of these financial statements.

The financial statements were approved by the Board of Directors on 19 March 2024.

P Brodnicki
Director

L Tilley
Director

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

2,252
7,186
3,014
10
16,598
14,659

43,719

34,397
8,038
933
6,809
452

50,629

94,348

169,793

119

118

Financial statements | Consolidated statement of changes in equity

for the year ended 31 December 2023

Attributable to the holders of the Parent Company

Share
capital premium
£’000
£’000

Note

Capital
redemption
reserve
£’000

Share
option
reserve
£’000

Retained
earnings
£’000

Non–
controlling
interests
£’000

Total
£’000

Total
Equity
£’000

Balance as at 1 January 2022

9,778

3,523

25,408

38,782

2,205

40,987

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

Current and deferred tax
recognised in equity

Reserve transfer

Dividends paid

11, 31

–

Transactions with owners

38,377

–

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

Balance as at 31 December 2022 and
1 January 2023

Profit for the year

Total comprehensive income

Transactions with owners

Issue of shares

Acquisition of minority interests

Share-based payment transactions

Current and deferred tax
recognised in equity

Reserve transfer

Dividends paid

Transactions with owners

9, 24

11, 31

48,155

4,511

15,154

67,897

7,548

75,445

–

13,467

(1,008)

12,459

13,467

(1,008)

12,459

–

942

(1,487)

(545)

3,380

–

3,380

449

101

550

(2,295)

2,295

–

3,380

550

–

(16,038)

(842)

(16,880)

1,534

(12,700)

(11,166)

(2,329)

(13,495)

Balance as at 31 December 2023

48,155

6,045

15,921

70,198

4,211

74,409

120

121

Financial statements | Consolidated statement of cash flows

for the year ended 31 December 2023

Notes

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
Impairment of right of use assets
Amortisation of intangibles
Unwinding of loan arrangement fees
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
Gain on remeasurement of redemption liability
Non-listed equity investment, amount written off
Loss/(gains) on fair value movements taken to profit and loss
Dividends received from associates
Finance income
Finance expense

Changes in working capital
Decrease/(increase) in trade and other receivables
(Decrease)/increase in trade and other payables
Increase in clawback liability

Cash generated from operating activities

Income taxes paid
Acquisition of minority interests

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 contingent consideration for associates

12
13
13
14
34
16
15
12
30
15
5
16
15
15
8
8

18
20
23

12
14
16
18
15

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
Acquisition of minority interests
Dividends paid to Company’s shareholders
Dividends paid to minority interest

Net cash used in financing activities

Net (decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of year

Cash and cash equivalents at the end of the year

21, 34
17, 34
21, 34

34
25
25
5
11

The notes on pages 122 to 182 form part of these financial statements.

2023
£’000

16,178

1,225
857
428
5,470
77
–
–
36
4,429
(848)
(4,486)
–
190
403
(291)
2,610

26,278

1,432
(283)
2,293

29,720

(5,390)
(592)

23,738

(932)
(1,121)
–
–
(469)

(2,522)

–
–
(5,350)
304
(1,312)
(907)
–
–
(593)
(16,038)
(842)

(24,738)

(3,522)
25,462

21,940

2022
£’000

17,353

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

121

120

Financial statements | Notes to the consolidated financial statements

for the year ended 31 December 2023

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 IFRS.

■ Going concern

The Directors have assessed the Group’s prospects

until 31 December 2025, 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.

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

The preparation of financial statements in compliance

revenue mix, which the Directors consider to be severe

with adopted IFRS requires the use of certain

but plausible stress tests on the Group’s cash position,

critical accounting estimates. It also requires Group

banking covenants and regulatory capital adequacy. The

management to exercise judgement in applying

the Group’s accounting policies. The areas where

Group’s financial modelling shows that the Group should

continue to be cash generative, maintain a surplus on its

significant judgements and estimates have been

regulatory capital requirements and be able to operate

made in preparing the financial statements and their

within its current financing arrangements.

effect are disclosed in note 2.

Based on the results of the financial modelling,

The financial statements have been prepared on

the Directors expect that the Group will be able to

a historical cost basis, except for investments in

continue in operation and meet its liabilities as they

non-listed equities and derivative financial instruments

fall due over this period. Accordingly, the Directors

relating to investments in associates that have been

continue to adopt the going concern basis for the

measured at fair value.

preparation of the financial statements.

The Group’s business activities, together with

■ The impact of climate risk on accounting

the factors likely to affect its future development,

estimates

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 also set out in the Strategic

Report as set out earlier in these financial statements.

In preparing the financial statements, the Directors

have considered the impact of climate change, taking

into account the relevant disclosures in the Strategic

Report, including those made in accordance with

the framework of the Taskforce on Climate-Related

The Group made an operating profit of £14.0m during

Financial Disclosures (TCFD).

2023 (2022: £18.5m) and had net current liabilities of

£21.4m as at 31 December 2023 (31 December 2022:

£14.9m) and equity attributable to owners of the Group

of £70.2m (31 December 2022: £67.9m).

The Group has assessed climate-related risks, covering

both physical risks and transition risks.

Many of the effects arising from climate change will

be longer term in nature with an inherent level of

uncertainty and have limited impact on accounting

estimates for the current period.

122

123

1 Accounting policies (continued)

New standards, interpretations, and amendments not

■ The impact of climate risk on accounting

yet effective

estimates (continued)

Future new standards and interpretations

Climate change may also have an impact on the

A number of new standards and amendments to

carrying value of goodwill but the potential impact

standards and interpretations will be effective for

of climate related risks on the Group’s impairment

future years and, therefore, have not been applied in

assessment is considered sufficiently remote at this

preparing these Consolidated Financial Statements.

point in time and therefore no sensitivity analysis has

These standards are not expected to have a material

been performed.

impact on the Group in the current or future reporting

■ Changes in accounting policies

New standards, interpretations and amendments

effective for the year ended 31 December 2023

New standards, interpretations and amendments

applied for the first time

The Group applied a number of standards and

interpretations for the first time in 2023 but these

did not have an impact on the consolidated

financial statements of the Group. The Group has

periods, on foreseeable future transactions or

disclosures other than as identified below:

Standard or Interpretation

Periods
commencing on or
after

IFRS S1 - General Requirements

1 January 2024

for Disclosure of Sustainability-

related Financial Information

IFRS S2 - Climate-related

1 January 2024

Disclosures

not early adopted any standards, interpretations or

IFRS S1 and IFRS S2 are not expected to have a

amendments that have been issued but are not yet

material impact on the results of the Group other than

effective.

■ New standards with an impact on the Group

to expand on climate related disclosures within the

financial statements. It is anticipated that transition

reliefs for comparative information prior to the first

• Amendments to IAS 1 and IFRS Practice Statement

year of adoption will be utilised.

2 – Disclosure of accounting policies (Effective

1 January 2023) The amendments to IAS 1 and

■ Current versus non-current classification

IFRS Practice Statement 2 Making Materiality

The Group presents assets and liabilities in the

Judgements provide guidance and examples to help

consolidated statement of financial position based on

entities apply materiality judgements to accounting

current/non-current classification. An asset is current

policy disclosures. The Group has ensured that

when it is:

material accounting policy disclosures have been

made in the financial statements in line with the

amendments to IAS 1 & IFRS Practice Statement 2.

■ New standards with no impact on the Group

• IFRS 17 Insurance contracts (Effective 1 January 2023)

• Amendments to IAS 8 – Definition of accounting

estimates (Effective 1 January 2023)

• Amendments to IAS 12 – Deferred tax related to

assets and liabilities arising from a single transaction

(Effective 1 January 2023)

• 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.

Due to their short-term nature, the carrying value of

cash and cash equivalents, trade and other receivables

approximates their fair value.

122

123

1 Accounting policies (continued)

■ Associates

■ Basis of consolidation

Subsidiaries

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.

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 where

the Group holds between 20% and 49% of the voting

rights. 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

The consolidated financial statements present the

an obligation to make good those losses).

results of the Company and its subsidiaries as if they

formed a single entity. Intercompany transactions and

balances between Group companies are therefore

eliminated in full.

Accounting policies for equity-accounted investees

have been adjusted to conform the accounting policies

of the associate to the Group’s accounting policies.

Profits and losses arising on transactions between the

The consolidated financial statements incorporate the

Group and its associates are recognised only to the

results of business combinations using the acquisition

extent of unrelated investors’ interests in the associate.

method. In the consolidated statement of financial

The investor’s share in the associate’s profits and losses

position, the acquiree’s identifiable assets, liabilities

resulting from these transactions is eliminated against

and contingent liabilities are initially recognised at

the carrying value of the associate.

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.

■ Non-controlling interests

The Group recognises non-controlling interests

in an acquired entity either at fair value or at the

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.

non-controlling interest’s proportionate share of the

■ Joint ventures

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. There are no other non-controlling interests.

See note 1 for the Group’s accounting policies for

business combinations.

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.

124

125

Financial statements | Notes to the consolidated financial statements (continued) for the year ended 31 December 20231 Accounting policies (continued)

■ Other intangible 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, except freehold land 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

not depreciated

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.

Software development can include both third party

costs and internally generated costs. Internally

generated costs are only capitalised once development

of the intangible has commenced, where technical

Freehold buildings

36 years

feasibility of the project has been confirmed, and

Fixtures and fittings

5 and 10 years

where it is probable the asset will generate future

Computer equipment

3 years

Gains and losses on disposal are determined by

comparing the proceeds with the carrying amount

and are recognised in the consolidated statement of

economic benefits. All costs prior to this are expensed

in the period. Software development assets that are

not in use are tested for impairment on an annual

basis.

comprehensive income. The Directors reassess the

Amortisation is charged to the consolidated statement

estimated residual values and useful economic lives of

of comprehensive income on a straight-line basis over

the assets at least annually.

■ Goodwill

the period of the licence agreements or expected

useful life of the asset and is charged once the asset is

in use. The Group reviews the expected useful lives of

Goodwill represents the excess of a cost of a business

assets with a finite life at least annually.

combination over the Group’s interest in the fair

value of identifiable assets under IFRS 3 Business

Combinations.

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

Goodwill is allocated to cash-generating units for

the purpose of impairment testing. The allocation is

made to those cash-generating units or groups of

cash-generating units that are expected to benefit

follows:

Licences

Website

from the business combination in which the goodwill

Software development

arose. The units or groups of units are identified at the

Acquired technology

lowest level at which goodwill is monitored for internal

Customer relationships

management purposes.

Trademarks and brands

6 years

3 years

10 years

5 to 9 years

3 to 11 years

Goodwill is capitalised as an intangible asset with any

Lender and introducer relationships 14 years

impairment in carrying value being charged to the

Member relationships

3 years

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.

124

125

1 Accounting policies (continued)

■ Loans and trade receivables

■ Impairment of non-financial assets

Loans and trade receivables are non-derivative

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

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.

fair value less costs to sell), the asset is written down

Impairment provisions for trade receivables are

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 consolidated

statement of comprehensive income except to the

extent that they reverse gains previously recognised in

other comprehensive income. An impairment loss for

goodwill is not reversed.

■ Financial assets

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 on an individual

receivable balance. 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.

Impairment provisions for loans to associates

In the consolidated statement of financial position, the

and other parties are recognised based on a

Group classifies its financial assets as at amortised cost

forward-looking expected credit loss model. The

only if both of the following criteria are met:

• the asset is held within a business model whose

objective is to collect the contractual cash flows; and

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 contractual terms give rise to cash flows that are

the credit risk has not increased significantly since

solely payments of principal and interest.

initial recognition of the financial asset, twelve month

All other financial assets are classified as fair value

through profit or loss.

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.

126

127

Financial statements | Notes to the consolidated financial statements (continued) for the year ended 31 December 20231 Accounting policies (continued)

The Group adopted the modified transition approach

■ 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

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

comprehensive income.

• leases with a duration of 12 months or less.

■ Derivative financial instruments

Payments associated with short-term leases and leases

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

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.

changes in fair value taken directly to the statement

Assets and liabilities arising from a lease are initially

of comprehensive income. Fair values of derivatives

measured on a present value basis. Lease liabilities

are determined using valuation techniques, including

include the net present value of the following lease

option pricing models.

■ Financial liabilities

Trade and other payables are recognised initially at fair

payments:

• fixed payments (including in-substance fixed

payments), less any lease incentives receivable;

value and subsequently carried at amortised cost.

• variable lease payments that are based on an index

■ 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.

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.

After initial recognition, loans and other borrowings

Lease payments to be made under reasonably

are subsequently carried at amortised cost using the

certain extension options are also included in the

effective interest rate method.

measurement of the liability. The lease payments are

■ Leases

The Group’s leasing activities and how they are

accounted for

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

The Group leases a number of properties from which

that the Group would have to pay to borrow the funds

it operates and office equipment. Rental contracts are

necessary to obtain an asset of similar value to the

typically made for fixed periods of five to ten years, with

right of use asset in a similar economic environment

break clauses negotiated for some of the properties.

with similar terms, security and conditions.

Contracts may contain both lease and non-lease

To determine the incremental borrowing rate, the Group:

components. The Group allocates the consideration in

the contract to the lease and non-lease components

based on their relative stand-alone prices.

• 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;

126

127

1 Accounting policies (continued)

termination options held are exercisable only by the

■ Leases (continued)

• 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

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

• makes adjustments specific to the lease, e.g. term,

in the lease term if the lease is reasonably certain to be

country and security.

extended (or not terminated).

Lease payments are allocated between principal and

For leases of property, the following factors are

finance cost. The finance cost is charged to profit or

normally the most relevant:

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:

• 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

• the amount of the initial measurement of lease liability,

reasonably certain to not terminate.

• any lease payments made at or before the

• Otherwise, the Group considers other factors

commencement date less any lease incentives

including historical lease durations and the costs

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

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.

straight-line basis. The Group does not revalue its land

and buildings that are presented within property, plant

Remeasurement

and equipment, and has chosen not to do so for the

The Group will remeasure a lease when there has

right of use buildings held by the Group.

been a contractual variation that amends the scope or

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

length of the lease or in cases where there is a change

in the Group’s intention to exercise a break option or

clause that exists in the contract. The lease liability will

be remeasured using the new interest rate implicit in

the lease or a revised incremental borrowing rate if the

interest rate implicit in the lease isn’t readily determined.

When the lease liability is remeasured, an equivalent

adjustment is made to the right of use asset unless its

carrying amount is reduced to nil, in which case any

remaining amount is recognised within administrative

expenses within the consolidated statement of

operational flexibility in terms of managing the

comprehensive income.

assets used in the Group’s operations. The majority of

128

129

Financial statements | Notes to the consolidated financial statements (continued) for the year ended 31 December 20231 Accounting policies (continued)

recognised at the acquisition date. If the reassessment

■ 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 the fair value on

acquisition date, 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.

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

still results in an excess of the fair value of net assets

acquired over the aggregate consideration transferred,

then the gain is recognised in the consolidated

statement of comprehensive income.

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 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.

Instruments, is measured at fair value with the changes

Where a business combination is for less than the entire

in fair value recognised in the statement of profit or

issued share capital of the acquiree and there is an

loss in accordance with IFRS 9. Other contingent

option for the acquirer to purchase the remainder of

consideration that is not within the scope of IFRS 9

the issued share capital of the business and/or for the

is measured at fair value at each reporting date with

vendor to sell the rest of the entire issued share capital

changes in fair value recognised in profit or loss.

of the business to the acquirer, then the acquirer will

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

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.

of the net assets acquired is in excess of the aggregate

Options that are not within the scope of IFRS 9 and

consideration transferred, the Group re-assesses

are linked to service will be accounted for under IAS

whether it has correctly identified all of the assets

19 Employee Benefits and/or IFRS 2 Share-based

acquired and all of the liabilities assumed and reviews

Payments as appropriate.

the procedures used to measure the amounts to be

128

129

1 Accounting policies (continued)

by the Group in respect of all services provided. The

■ Business combinations and goodwill (continued)

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.

■ Provisions

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 are recognised at a point

in time when commission is approved for payment

by the L&G Mortgage Club or direct from the lender,

which is the point at which all performance obligations

A provision is recognised in the statement of financial

have been met.

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.

■ Share capital

Financial instruments issued by the Group are treated

Insurance commissions are recognised at a point in

time when the policy is accepted by the insurer. Life

insurance commissions are paid on an indemnity basis,

mainly over a four year period. If a policy is cancelled

during the indemnity period, part of the commission

received may have to be repaid to the provider.

as equity only to the extent that they do not meet

A clawback liability is recognised for the expected level

the definition of a financial liability. The Company’s

of commissions repayable with the liability movement

ordinary shares are classified as equity instruments.

recognised as an offset against revenue recognised in

Incremental costs directly attributable to the issue

the period. More information on the clawback liability

of new shares are shown in share premium as a

is included in note 2(e).

deduction from the proceeds.

■ Revenue

The Group recognises revenue from the following

main sources:

• Mortgage procuration fees paid to the Group by

Client fees and Other income is recognised at a point

in time when payment is received or guaranteed to be

received, as until this point it is not possible to be certain

that the performance obligation has been satisfied.

■ Taxation

lenders either via the L&G Mortgage Club or directly.

Income tax comprises current and deferred tax.

• Insurance commissions from advised sales of

protection and general insurance policies.

Income tax is recognised in the consolidated

statement of comprehensive income. Other than if it

relates to items recognised directly in equity in which

• Client fees paid by the underlying customer for the

case it is also recognised directly in equity.

provision of advice on mortgages, other loans and

Current tax is the expected tax payable on the

protection.

• Other Income comprising income from services

provided to directly authorised entities, fees in relation

to Later Life lending and Wealth and ancillary services

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.

such as conveyancing and surveying.

Deferred tax is provided using the liability method on

Mortgage procuration fees, insurance commissions

and client fees are included at the amounts received

temporary differences between the tax bases of assets

and liabilities and their carrying amounts for financial

reporting purposes at the reporting date.

130

131

Financial statements | Notes to the consolidated financial statements (continued) for the year ended 31 December 20231 Accounting policies (continued)

reduction in goodwill (as long as it does not exceed

■ Taxation (continued)

Deferred tax assets and liabilities are recognised for all

taxable temporary differences, except for when:

• 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

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.

profit will be available against which the temporary

■ Segment reporting

differences can be utilised.

An operating segment is a distinguishable segment

The carrying amount of deferred tax assets is reviewed

of an entity that engages in business activities from

at each reporting date and reduced to the extent that it

which it may earn revenues and incur expenses and

is no longer probable that enough taxable profit will be

whose operating results are reviewed regularly by the

available to allow all or part of the deferred tax asset to be

entity’s chief operating decision maker (CODM). The

utilised. Unrecognised deferred tax assets are re-assessed

Board reviews the Group’s operations and financial

at each reporting date and are recognised to the extent

position as a whole and therefore considers that it has

that it has become probable that future taxable profits

only one operating segment, being the provision of

will allow the deferred tax asset to be recovered.

financial services operating solely within the UK. The

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

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.

substantively enacted at the reporting date.

Operating profit is the profit measure, as disclosed

Deferred tax relating to items recognised outside profit

or loss is recognised outside profit or loss. Deferred tax

on the face of the consolidated statement of

comprehensive income that is reviewed by the CODM.

items are recognised in correlation to the underlying

■ Dividends

transaction either in OCI or directly in equity.

Dividends are recognised when they become legally

Tax benefits acquired as part of a business

payable. In the case of interim dividends to equity

combination, but not satisfying the criteria for separate

shareholders, this is when they are paid. In the case of

recognition at that date, are recognised subsequently

final dividends, this is when they are approved by the

if new information about facts and circumstances

shareholders.

change. The adjustment is either treated as a

130

131

1 Accounting policies (continued)

2 Critical accounting estimates and judgements

■ Share-based payments

The Group makes certain estimates and assumptions

(a) Equity-settled transactions

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

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

into the fair value of the options granted. As long as all

When an acquisition arises, the Group is required

other vesting conditions are satisfied, a charge is made

under UK-adopted International Accounting Standards

irrespective of whether the market vesting conditions

to calculate the Purchase Price Allocation (“PPA”).

are satisfied. The cumulative expense is not adjusted for

The PPA requires companies to report the fair value

failure to achieve a market vesting condition or where a

of assets and liabilities acquired and it establishes

non-vesting condition has been satisfied.

useful lives for identified assets. The identification

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

and the valuation of the assets and liabilities acquired

involves estimation and judgement when determining

whether the recognition criteria are met.

the modification, is also charged to the statement of

Subjectivity is also involved in the PPA with the

comprehensive income over the remaining vesting

estimation of the future value of relationships,

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.

(b) Acquisition related Cash-settled transactions

technology, brand and goodwill. The fair value of

separately identifiable intangible assets acquired

during the year was £nil (2022: £55.4m), 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

A liability is recognised for the fair value of cash-settled

relationships and technology and the appropriate

transactions. The fair value is measured initially at the

discount rate to be used to discount these cash flows

date of the grant and is subsequently remeasured

to their present value. Residual goodwill totalling £nil

at each reporting date up to and including the

(2022: £38.7m) has been accounted for during the year.

settlement date. The fair value is expensed over the

period until the vesting date with a corresponding

increase in liabilities. The fair value is determined using

a discounted net present value model, with estimates

over service and performance conditions updated to

reflect management’s best estimate of the awards

expected to vest at each reporting date.

132

133

Financial statements | Notes to the consolidated financial statements (continued) for the year ended 31 December 20232 Critical accounting estimates and judgements (continued)

(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. The fair value of the

options are recognised as either a Redemption Liability in Note 5 or within accruals in Note 20.

The carrying value of the liabilities relating to acquisition options, recorded within Note 20 under accruals, are as

follows:

2023

IAS19 Service
Charge
Accrual
(£’000)

IFRS 2 Option
Charge
Accrual
(£’000)

IAS19 Service
Charge
Accrual
(£’000)

2022
IFRS 2 Option
Charge
Accrual
(£’000)

1,925

–

1,925

–

441

138

579

1,477

–

1,477

–

491

498

First Mortgage Direct Ltd

Project Finland Topco Ltd

Aux Group Ltd

Total

(c)

Impairment of intangible assets

For the purposes of impairment testing, acquired relationships, technology, brands, goodwill and other

intangibles 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).

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. The recoverable amount of the assets

is the higher of an asset’s or CGU’s fair value less cost of disposal and its value in use.

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

3.5% (2022: 5.0%), which management considers reasonable given the Group’s historic growth rates and its market

share growth model.

132

133

2 Critical accounting estimates and judgements

calculation, the age profile of the commission received,

(continued)

(c)

Impairment of intangible assets (continued)

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

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 £0.5m change in

the liability. A 2% change (absolute) in the recoveries

rate causes a £0.2m change in the liability. More

information is included in note 23.

(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:

balances, and the Group uses the simplified approach

• Net Present Value of the next 5 year’s projected free

for trade receivables within IFRS 9 using the

cash flow and terminal value; and

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

taken into account the effect of geopolitical and

macroeconomic uncertainty and inflationary pressures

and their impact on the UK property and lending

markets, and considered different scenarios for

• 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.

repayments of these loans and have also estimated

The Group continues to make investments in

percentage probabilities assigned to each scenario for

associates, with elements of contingent consideration

each associate where applicable. More information is

in some cases, as well as enter into commitments or

included in note 18.

(e) Clawback liability

The liability relates to the estimated value and

timing of repaying commission received up front on

protection policies that may lapse in a period of up

to four years following inception. The liability balance

is calculated using a model that has been developed

over several years. The model uses a number of factors

including the total ‘unearned’ commission (i.e. that

could still be subject to clawback) at the point of

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

contingent consideration likely to be payable and also

the future performance and value of these businesses

in determining the fair value of the options.

134

135

Financial statements | Notes to the consolidated financial statements (continued) for the year ended 31 December 20232 Critical accounting estimates and judgements (continued)

(g) Share options, employer’s National Insurance Contributions and Deferred Tax

Under the Group’s equity-settled share-based remuneration schemes (see note 30), 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 2023 was £1.4m (2022: £1.0m). This has been presented net of other Group deferred tax liabilities in

the consolidated statement of financial position.

3 Revenue

The Group operates in one segment being that of the provision of financial services in the UK. Revenue is derived

as follows:

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

2023
£’000

98,033

93,144

43,325

5,031

2022
£’000

106,615

82,095

36,257

5,853

239,533

230,820

2023
£’000

130,934

14,481

(22)

1,214

22,764

169,371

2022
£’000

142,769

8,000

102

601

16,401

167,873

135

134

4 Cost of sales (continued)

Wages and salary costs

Gross wages

Employers’ national insurance

Defined contribution pension costs

Other direct costs

2023
£’000

19,633

2,046

734

351

2022
£’000

14,001

1,530

570

300

22,764

16,401

5 Acquisition related costs, acquisition of minority interests and redemption liability

First Mortgage Direct Limited

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 (2022: £367,000) in the year

ended 31 December 2023. There is a put and call option over the remaining 20% of the issued share capital of

First Mortgage which 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.

The costs relating to this acquisition for the year are made up as follow:

Amortisation of acquired intangibles

Option costs (IAS 19)

Option costs (IFRS 2)

Total costs

The Fluent Money Group Limited

2023
£’000

367

448

409

1,224

2022
£’000

367

436

409

1,212

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”).

Further acquisitions of minority interests

April 2023

On 11 April 2023, Mortgage Advice Bureau Ltd acquired a further 0.8% of the ordinary share capital of Project

Finland Topco Limited for £188,967 taking its shareholding to 76.2%. This resulted in a reduction in the redemption

liability of £94,484 relating to the consideration element of the transaction. The equity settled remuneration

element resulted in an acceleration of equity settled option costs of £151,674 and reduction in parent equity

of £47,242. The cash settled remuneration element resulted in additional option costs of £36,549. Further to this,

£140,067 of accumulated non-controlling interest was transferred to retained earnings representing the relevant

proportion of non-controlling interest at the purchase date.

136

137

Financial statements | Notes to the consolidated financial statements (continued) for the year ended 31 December 2023

5 Acquisition related costs, acquisition of minority interests and redemption liability (continued)

The Fluent Money Group Limited (continued)

Further acquisitions of minority interests (continued)

December 2023

On 19 December 2023, Mortgage Advice Bureau Ltd acquired a further 8.1% of the ordinary share capital of Project

Finland Topco Limited for £1,991,616 taking its shareholding to 84.3%. Half of the payment was made in 2023,

with the balance deferred, split equally and payable in December 2024 and December 2025. This resulted in a

reduction in the redemption liability of £995,808 relating to the consideration element of the transaction. The

equity settled remuneration element resulted in an acceleration of equity settled option costs of £1,598,566 and

reduction in parent equity of £497,904. The cash settled remuneration element resulted in additional option costs

of £385,205. Further to this, £1,346,893 of accumulated non-controlling interest was transferred to retained earnings

representing the relevant proportion of non-controlling interest at the purchase date.

A summary of the cash flows and deferred elements relating to the acquisition of minority interests in the year is as

follows:

Consideration – financing activities

Remuneration – operating activities

Total costs

Paid in cash
£’000

Deferred
£’000

593

592

1,185

498

996

Total
£’000

1,091

1,090

2,181

The deferred amounts are recognised in accruals within trade and other payables.

Put and call options

There is a put and call option over the remaining 15.7% of the issued share capital of Fluent which has been

accounted for under IAS 32 Financial Instruments 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. There is also a put and call option over certain

growth shares that have been issued to Fluent’s wider management team that has been accounted for under IFRS

2 Share-based Payments as exercise is solely contingent upon continued employment.

The costs relating to this acquisition for the period are made up as follow:

Amortisation of acquired intangibles

Option costs (IFRS 2)

Acquisition related costs

Total costs

2023
£’000

4,399

3,289

159

7,847

2022
£’000

2,127

1,147

2,610

5,883

137

136

5 Acquisition related costs, acquisition of minority interests and redemption liability (continued)

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.

The costs relating to this acquisition for the period are made up as follow:

Amortisation of acquired intangibles

Acquisition related costs

Total costs

Aux Group Limited

2023
£’000

–

2022
£’000

On 3 November 2022 Mortgage Advice Bureau (Holdings) plc acquired 75% of the entire issued share capital of

Aux Group Limited (“Auxilium”).

Put and call options

There is a put and call option over the remaining 25% of the issued share capital of Aux Group Limited which

has been accounted for under IAS 32 Financial Instruments 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.

The costs relating to this acquisition for the period are made up as follow:

Amortisation of acquired intangibles

Option costs (IFRS 2)

Acquisition related costs

Total costs

2023
£’000

329

131 7

–

460

2022
£’000

130

192

138

139

Financial statements | Notes to the consolidated financial statements (continued) for the year ended 31 December 2023

5 Acquisition related costs, acquisition of minority interests and redemption liability (continued)

Redemption liability

At 31 December 2023, the expected cash flows relating to the redemption liability were remeasured resulting in

gain of £4.5m included within the consolidated statement of comprehensive income. £1.2m has been included

within finance expenses relating to the unwinding of the redemption liability from the end of the prior year.

Carrying value of redemption liability

Balance as at 1 Jan

Redemption liability arising on acquisition

Purchase of additional minority interest in Fluent

Gain on remeasurement

Unwinding of redemption liability

Balance as at 31 Dec

2023
£’000

7,186

–

(1,090)

(4,486)

1,183

2,793

2022
£’000

–

6,540

–

646

7,186

Redemption liabilities are in respect of the put and call options relating to the Fluent and Auxilium acquisitions

and are £2.4m (2022: £7.0m) and £0.4m (2022: £0.2m) respectively.

Total acquisition costs

The total costs relating to the four acquisitions above that are included in the consolidated statement of

comprehensive income are as follows:

Amortisation of acquired intangibles

Option costs (IFRS 2 and IAS 19)

Acquisition related costs

Total costs

2023
£’000

5,160

4,277

159

9,596

2022
£’000

2,582

1,999

2,755

7,336

The Fluent minority interest purchase during the year resulted in £1.8m accelerated equity settled option costs

and £0.4m additional cash settled option costs.

138

139

6 Operating profit

Operating profit is stated after the following items:

Depreciation of property, plant and equipment

Depreciation of right of use assets

Impairment of right of use assets

Amortisation of acquired intangibles

Amortisation of other intangibles

Costs related to acquisition options

Costs related to acquisitions

Costs related to restructuring

Impairment and amounts written off non-listed equity
investments

Gain on fair value measurement of contingent
consideration

Loss on fair value measurement of derivative financial

instruments

Note

5, 14

2023
£’000

1,225

857

428

5,160

310

4,277

159

539

–

2022
£’000

591

563

–

2,582

284

1,999

2,755

–

2,783

(884)

190

Profits from associates are disclosed as part of the operating profit as this is the operational nature of the Group.

2023
£’000

2022
£’000

Auditor remuneration:

Fees payable to the Group’s auditor for the audit of the Group’s financial statements

571

Fees payable to the Group’s auditor and its associates for other services:

Audit of the accounts of subsidiaries

Audit-related assurance services

133

312

288

140

141

Financial statements | Notes to the consolidated financial statements (continued) for the year ended 31 December 2023

7 Staff costs

Staff costs, including executive and non-executive Directors’ remuneration, are as follows:

Wages and salaries

Share-based payments (see note 30)

Social security costs

Defined contribution pension costs

Other employee benefits

2023
£’000

42,753

4,429

4,585

1,736

738

2022
£’000

32,204

2,983

3,608

1,373

730

54,241

40,898

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:

2023
£’000

22,764

31,477

54,241

2022
£’000

16,401

24,497

40,898

2023
Number

2022
Number

Executive Directors

Advisers

Compliance

Sales and marketing

Operations

Total

285

106

110

497

1,001

216

106

367

790

141

140

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

2023
£’000

1,387

159

181

11 2

4 4

1,742

2,774

During the year retirement benefits were accruing to 2 Directors (2022: 2) in respect of defined contribution

pension schemes.

The total amount payable to the highest paid Director in respect of emoluments was £580,161 (2022: £858,176).

The value of the Group’s contributions paid to a defined contribution pension scheme in respect of the highest

paid Director amounted to £nil (2022: £nil).

8 Finance income and expenses

Finance income

Interest income

Interest income accrued on loans to associates

Finance expenses

Interest expense

Interest expense on lease liabilities

Unwinding of redemption liability

2023
£’000

291

– 6

291

2023
£’000

1,320

107

1,183

2,610

2022
£’000

102

108

2022
£’000

515

646

1,238

During the year, interest accrued in previous years of £426,000 was paid (2022: £nil).

The interest expense mainly relates to the term loan and the revolving credit facility (see note 21).

142

143

Financial statements | Notes to the consolidated financial statements (continued) for the year ended 31 December 2023

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 24)

Total tax expense

2023
£’000

5,434

(1,766)

–

(1,715)

3,719

2022
£’000

4,184

291

128

(29)

390

4,574

The reasons for the difference between the actual charge for the year and the standard rate of corporation tax in the

United Kingdom of 23.52% (2022: 19.00%) 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

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 contingent consideration

Redemption liability movements

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

Adjustments to prior years

Total tax expense

2023
£’000

16,178

3,805

115

(48)

(89)

1,099

–

(777)

(199)

–

(207)

(22)

–

(22)

2022
£’000

17,353

3,297

495

(139)

(27)

652

(5)

(70)

(168)

123

(135)

529

(54)

(4)

–

3,719

4,574

143

142

9 Income tax (continued)

Options exercised during the period resulted in a current tax credit of £0.1m (2022: nil) recognised directly in equity

relating to the current tax deduction in excess of the cumulative share-based payment expense relating to these

options.

For the year ended 31 December 2023 the deferred tax credit relating to unexercised share options recognised in

equity was £448,826 (2022: £783,556 - charge). A charge of £nil (2022: £16,568) was recognised in deferred tax in

equity as a result of remeasurements arising from changes to UK corporation tax rates.

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

2023
£’000

13,467

2022
£’000

12,237

Weighted average number of shares in issue

57,090,793

56,081,853

Basic earnings per share (in pence per share)

23.6p

21.8p

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

2023
£’000

13,467

2022
£’000

12,237

Weighted average number of shares in issue

57,434,053

56,528,515

Diluted earnings per share (in pence per share)

23.5p

21.6p

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

2023

2022

57,030,995

53,204,620

59,798

2,877,233

Basic weighted average number of shares

57,090,793

56,081,853

Potential ordinary shares arising from options

343,260

446,662

Diluted weighted average number of shares

57,434,053

56,528,515

144

145

Financial statements | Notes to the consolidated financial statements (continued) for the year ended 31 December 2023

10 Earnings per share (continued)

The reconciliation between the basic and adjusted figures is as follows:

2023
£’000

13,467

2022
£’000

12,237

2023
Basic
earnings
per share
pence

2022
Basic
earnings
per share
pence

2023
Diluted
earnings
per share
pence

2022
Diluted
earnings
per share
pence

23.6

21.8

23.5

21.6

Profit for the year

Adjustments:

Amortisation of acquired

intangibles

3,575

2,582

6.3

4.6

6.2

4.6

Costs relating to the First

Mortgage, Fluent and

Auxilium options

3,477

1,715

6.1

3.1

6.1

Costs relating to Fluent and

Auxilium acquisitions

159

2,755

0.3

4.9

0.3

3.0

4.9

Gain on contingent

consideration

Loss on derivative financial

–

(891)

–

(1.6)

–

(1.6)

instruments

190

0.3

–

0.3

Amount written off non–listed

equity investment

Restructuring costs

–

412

Unwinding of redemption

liability

(3,303)

Profit on sale of assets

–

Tax effect of adjustments

(966)

2,783

–

646

(19)

(609)

–

0.7

(5.8)

–

(1.7)

Adjusted earnings

17,012

21,217

29.8

5.0

–

1.1

–

(1.1)

37.8

–

0.7

(5.8)

–

(1.7)

29.6

–

4.9

–

1.1

–

(1.1)

37.4

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

and one-off restructuring 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.

144

145

11 Dividends

Dividends paid and declared on ordinary shares during the year:

Final dividend for 2022: 14.7p per share (2021: 14.7p)

Interim dividend for 2023: 13.4p per share (2022: 13.4p)

Equity dividends on ordinary shares:

Proposed for approval by shareholders at the AGM:

Final dividend for 2023: 14.7p per share (2022: 14.7p)

2023
£’000

8,384

7,654

16,038

2023
£’000

8,398

2022
£’000

8,381

7,642

16,023

2022
£’000

8,384

The record date for the final dividend is 26 April 2024 and the payment date is 29 May 2024. The ex-dividend date

will be 25 April 2024. The Company statement of changes in equity shows that the Company had positive reserves

as at 31 December 2023 of £5.7m. 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 2023 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.

146

147

Financial statements | Notes to the consolidated financial statements (continued) for the year ended 31 December 2023

12 Property, plant and equipment

Freehold
land and
building
£’000

Fixtures &
fittings
£’000

Computer
equipment
£’000

Cost

As at 1 January 2023

Additions

Disposals

As at 31 December 2023

Depreciation

As at 1 January 2023

Charge for the year

Eliminated on disposal

As at 31 December 2023

Cost

As at 1 January 2022

Additions

Acquisition of subsidiaries

Disposals

2,536

–

2,536

407

–

461

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

As at 31 December 2023

As at 31 December 2022

As at 31 December 2021

Office refurbishment

349

–

407

2,075

2,129

2,187

3,681

535

(55)

4,161

404

666

(20)

1,050

1,515

397

(262)

1,650

793

505

(261)

1,037

Fixtures &
fittings
£’000

Computer
equipment
£’000

1,050

2,903

348

(620)

3,681

823

164

(583)

404

3,111

3,277

227

1,417

326

513

(741)

1,515

1,164

369

(740)

793

613

722

253

Total
£’000

7,732

932

(317)

8,347

1,604

1,225

(281)

2,548

Total
£’000

5,003

3,229

861

(1,361)

7,732

2,336

591

(1,323)

1,604

5,799

6,128

2,667

During the prior 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.

146

147

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:

Right of use assets

As at 1 January 2023

Additions

Remeasurement

Impairment

Depreciation

As at 31 December 2023

Lease liabilities

As at 1 January 2023

Additions

Remeasurement

Interest expense

Lease payments

As at 31 December 2023

Right of use assets

As at 1 January 2022

Additions

Acquisition of subsidiary

Depreciation

Disposals

As at 31 December 2022

Land and
Buildings
£’000

Office
equipment
£’000

3,747

–

(317)

(423)

(821)

2,186

Land and
Buildings
£’000

3,822

–

(317)

102

(973)

2,634

125

–

(5)

(36)

Office
equipment
£’000

125

–

(41)

102

Land and
Buildings
£’000

Office
equipment
£’000

2,457

950

919

(546)

(33)

3,747

–

142

(17)

–

125

Total
£’000

3,872

(317)

(428)

(857)

2,283

Total
£’000

3,947

(317)

107

(1,014)

2,736

Total
£’000

2,457

950

1,061

(563)

(33)

3,872

148

149

Financial statements | Notes to the consolidated financial statements (continued) for the year ended 31 December 2023

13 Right of use assets (continued)

Leases (continued)

Lease liabilities

As at 1 January 2022

Additions

Acquisition of subsidiary

Interest expense

Lease payments

Disposals

As at 31 December 2022

Land and
Buildings
£’000

2,596

919

874

(604)

(37)

3,822

Office
equipment
£’000

–

142

(20)

–

125

The present value of the lease liabilities is as follows:

31 December 2023

Lease payments (undiscounted)

Finance charges

Net present values

31 December 2022

Lease payments (undiscounted)

Finance charges

Net present values

Within 1
year

997

(66)

931

Within 1
year

1,048

(115)

933

1-2
years

792

(37)

755

1-2
years

994

(83)

911

2-5
years

1,005

(36)

969

2-5
years

1,857

(94)

1,763

After 5
years

–

After 5
years

345

(5)

340

The consolidated statement of comprehensive income shows the following amounts relating to leases:

Depreciation of right of use assets

Impairment of right of use assets

Interest expense

Short term lease expense

Low value lease expense

The total cash flow for leases during the period was £1.1m (2022: £0.7m).

2023
£’000

857

428

107

Total
£’000

2,596

919

1,016

(624)

(37)

3,947

Total

2,875

(139)

2,736

Total

4,244

(297)

3,947

2022
£’000

563

–

149

148

13 Right of use assets (continued)

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 £1,000.

Extension and termination options

During the year, a break clause was exercised on one property. This resulted in a remeasurement of the associated

lease liability of £317,000. An impairment assessment of the impacted right of use asset resulted in an impairment of

£428,000 recognised in the consolidated statement of comprehensive income.

As at 31 December 2023, the carrying amounts of all other 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 £85,320 are potentially avoidable

were the Group to exercise break clauses at the earliest opportunity.

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

•

Aux Group Limited, and in particular its main operating subsidiary 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

2023
£’000

54,038

–

54,038

2022
£’000

15,308

38,730

54,038

153

53,885

150

151

Financial statements | Notes to the consolidated financial statements (continued) for the year ended 31 December 2023

14 Intangible assets (continued)

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

Total
£’000

As at 1 January and 31 December 2023

4,267

11,041

36,974

1,756

54,038

Accumulated impairment

As at 1 January and 31 December 2023

153

–

153

Net book value

At 31 December 2023

4,114

11,041

36,974

1,756

53,885

‘Other’ comprises Vita and Auxilium.

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 2023 concluded that there had been no further impairment of goodwill.

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 3.5% 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 (2022: £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, which are based on extrapolated budget

models which have been approved by the Board, and applied a discount rate of 13.2% (2022: 11.3%) and then applied

a terminal value calculation, which assumes a growth rate of 3.5% (2022: 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.

150

151

14 Intangible assets (continued)

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 (2022: £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, which are

based on extrapolated budget models which have been approved by the Board, and applied a discount rate of 13.2%

(2022: 20.7%) and then applied a terminal value calculation, which assumes a growth rate of 3.5% (2022: 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 five-year period, which are based on extrapolated

budget models which have been approved by the Board, and applied a discount rate of 13.2% and then applied a

terminal value calculation, which assumes a growth rate of 3.5% 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
base
assumption

(Decrease)
in value
in use,
£m

13.2%

+1.0% (absolute)

Various

-5.0% (proportionate)

3.5%

-1.0% (absolute)

(26.8)

(42.3)

(19.9)

152

153

Financial statements | Notes to the consolidated financial statements (continued) for the year ended 31 December 2023

14 Intangible assets (continued)

Other intangible assets

Internally

Generated

Technology/ Technology/

Customer Trademarks

Other

Licences

Website

Software

contracts

and brands relationships

£’000

Total

£’000

Cost

As at 1 January 2023

Additions

Disposals

108

–

223

133

988

(140)

(554)

1,105

16,824

2,337

5,089

34,568

60,254

–

1,121

(694)

As at 31 December 2023

108

216

1,539

16,824

2,337

5,089

34,568

60,681

Accumulated Amortisation

As at 1 January 2023

Charge for the year

Disposals

108

–

140

610

258

842

1,683

(140)

(554)

–

797

273

–

680

483

–

1,254

4,431

2,722

5,470

–

(694)

As at 31 December 2023

108

314

2,525

1,070

1,163

3,976

9,207

Other intangible assets

Internally

Generated

Technology/ Technology/

Customer

Trademarks

Other

Licences

Website

Software

contracts

and brands relationships

£’000

Total

£’000

Cost

As at 1 January 2022

108

Additions

Acquisition of subsidiaries

Disposals

–

140

–

571

534

–

16,824

–

1,980

1,470

–

4,269

617

–

3,619

34,568

55,368

–

357

–

As at 31 December 2022

108

223

1,105

16,824

2,337

5,089

34,568

60,254

Accumulated Amortisation

As at 1 January 2022

108

140

Charge for the year

Disposals

–

As at 31 December 2022

108

140

399

211

–

610

–

842

–

842

550

247

–

797

368

312

–

1,565

1,254

2,866

–

680

1,254

4,431

Net book value

As at 31 December 2023

As at 31 December 2022

As at 31 December 2021

–

165

1,225

14,299

1,267

3,926

30,592

51,474

–

495

15,982

1,540

4,409

33,314

55,823

172

–

1,430

1,102

–

2,704

152

153

14 Intangible assets (continued)

Assets which are internally generated are solely within asset categories; Website and Internally Generated

Technology/Software. Technology/software contains only acquired technology assets. Other relationships include

lender and introducer relationships and member relationships assets.

Individually Material Intangible Assets

Asset Description

NBV as at

NBV as at
31 December 31 December

Asset
Category

2023
£’000

2022 Amortisation
End Date

£’000

Fluent Money Limited – Technology

Technology/Software

14,305

15,988

July 2032

Fluent Mortgages Limited – Introducer Relationships

Other relationships

11,149

12,041

July 2036

Fluent Lifetime Limited – Introducer Relationships

Other relationships

6,985

7,543

July 2036

Fluent Money Limited – Lender Relationships

Other relationships

6,254

6,754

July 2036

Fluent Bridging Limited – Introducer Relationships

Other relationships

5,614

6,063

July 2036

Fluent Money Limited – Brand

Trademarks and brands 2,997

3,313

July 2033

First Mortgage Direct Limited –
Customer Relationships

Customer contracts

990

1,210

July 2028

First Mortgage Direct Limited – Brand

Trademarks and brands 809

956

July 2029

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

Registered
office

Profile House, Stores Road,
Derby DE21 4BD

Percentage
of ordinary
shares held

Description

49 Property surveyors

Burdsall House, London Road,
Derby DE24 8UX

43.25

Conveyancing
services

NSB & RC Lydiard Fields,
Great Western Way, Swindon SN5 8UB

Provision of

financial services

Clear Mortgage Solutions Limited

114 Centrum House, Dundas Street,
Edinburgh EH3 5DQ

Provision of

financial services

MAB Broker Services PTY Limited

Level 5, 2 Elizabeth Plaza,
North Sydney, NSW 2060

48.05

Provision of

financial services

The Mortgage Broker Group Limited

Prospect House 1, Prospect Place,
Derby, DE24 8HG

Provision of

financial services

Meridian Holdings Group Limited

68 Pullman Road, Wigston,
Leicester, LE18 2DB

Provision of

financial services

154

155

Financial statements | Notes to the consolidated financial statements (continued) for the year ended 31 December 2023

15 Investments in associates and joint venture (continued)

Company name

Evolve FS Ltd

Heron Financial Limited

Registered
office

Unit 26-28 Brightwell Barns,
Waldringfield Road, Brightwell,
Ipswich, Suffolk, IP10 0BJ

Moor Park Golf Club, Moor Park,
Rickmansworth, Hertfordshire,
England, WD3 1QN

Percentage
of ordinary
shares held

Description

Provision of
financial services

Insurance agent
and broker

M & R FM Ltd(1)

14 Kensington Terrace,
Gateshead, NE11 9SL

Provision of
financial services

The reporting date for the Group’s associates, as listed in the table above, other than Clear Mortgage Solutions

Limited and MAB Broker Services PTY Ltd, 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)

37% of the ordinary share capital of M & R FM Ltd is held by First Mortgage Direct Ltd.

The investment in associates and the joint venture at the reporting date is as follows:

As at 1 January

Additions

Disposals

Credit to the consolidated statement of comprehensive income:

Share of profit

Dividends received

As at 31 December

2023
£’000

11,387

469

–

848

(403)

12,301

2022
£’000

12,433

–

(848)

712

(910)

11,387

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 2023 is £nil

(2022: £nil). In the year ended 30 June 2023, MAB Broker Services PTY Limited reported a profit of AUD0.01m (2022:

loss of AUD0.38m).

154

155

15 Investments in associates and joint venture (continued)

Acquisitions and disposals

2023

On 26 May 2023, First Mortgage Direct Limited, an 80% owned subsidiary of the Group, acquired a further 12% of M & R

FM Limited for a consideration of £469,454, bringing its total stake to 37%.

2022

On 14 April 2022, Mortgage Advice Bureau Limited paid a further £277,600 in contingent consideration in respect of

its acquisition of a 49% stake in Heron Financial Limited in November 2021.

On 27 April 2022, Mortgage Advice Bureau Limited paid a further £179,252 in contingent consideration in respect of

its acquisition of a further 29% interest in Vita Financial Limited in May 2021.

On 21 July 2022, Mortgage Advice Bureau Limited paid a further £625,567 in contingent 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

contingent 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.

A total net gain of £884,000 was recognised in the consolidated statement of comprehensive income in respect of

the actual contingent consideration paid or expected to be paid on the above associate businesses in 2022.

156

157

Financial statements | Notes to the consolidated financial statements (continued) for the year ended 31 December 202315 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:

2023

Evolve FS
Ltd
£’000

Meridian
Heron Holdings
Group
Ltd
£’000

Financial
Ltd
£’000

Sort
Group
Limited
£’000

Clear
Mortgage
Solutions M & R FM
Limited
£’000

Ltd
£’000

Non-current assets

Cash balances

Current assets

(excluding cash balances)

Current liabilities

420

349

(614)

221

522

1,974

649

1,076

2,295

1,097

1,073

873

675

567

384

485

(455)

(652)

(642)

(404)

(377)

Non-current liabilities and provisions

(8)

(419)

(380)

(84)

(600)

(410)

Revenue

4,237

2,409

7,129

11,794

4,974

3,874

Profit before taxation

Total comprehensive income

Carrying value of investment

600

497

385

289

788

673

507

416

1,000

802

As at 1 January 2023

2,882

2,638

1,497

1,936

864

Increase in investment

Profit attributable to Group

Dividends received

–

244

(125)

–

259

–

213

(56)

906

469

249

(222)

As at 31 December 2023

2,905

2,757

1,566

2,195

1,021

1,402

156

157

15 Investments in associates and joint venture (continued)

Summarised financial information for associates (continued)

2022

Non-current assets

Cash balances

Evolve
FS Ltd
£’000

502

Current assets (excluding cash balances)

356

Current liabilities

(493)

Non-current liabilities and provisions

(7)

Heron
Financial
Ltd
£’000

Meridian
Holdings
Group ltd
£’000

Sort
Group
Limited
£’000

183

409

266

(150)

(161)

1,927

1,700

166

(868)

(740)

592

2,003

605

(1,134)

(93)

Pinnacle
Surveyors
(England
& Wales)
Limited
£’000

316

708

(569)

(49)

Revenue

4,792

2,576

6,873

12,042

5,838

(Loss)/profit before taxation

Total comprehensive (loss)/income

(26)

275

209

(78)

976

820

Carrying value of investments

As at 1 January 2022

3,143

2,536

1,541

1,628

(Loss)/profit attributable to Group

Dividends received

(16)

(245)

102

–

(44)

–

438

(130)

As at 31 December 2022

2,882

2,638

1,497

1,936

424

345

464

165

(348)*

281

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.

158

159

Financial statements | Notes to the consolidated financial statements (continued) for the year ended 31 December 2023

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:

2023

2022

2023

2022

Associates

Associates Joint Venture

Joint Venture

£’000

Non-current assets

Cash balances

Current assets (excluding cash balances)

£’000

991

680

1,295

£’000

413

3,287

1,561

Current liabilities

(1,202)

(2,155)

Non-current liabilities and provisions

(794)

(1,366)

1,127

(53)

(111)

Revenue

8,893

14,470

406

(Loss)/profit before taxation

Total comprehensive (loss)/ income

(Loss)/profit attributable to Group

Dividends received

(645)

(675)

(210)

–

424

146

188

–

1,167

(74)

(109)

486

(267)

(213)

–

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 profits in the year of £44,186 (2022: losses of £75,948) and

cumulative unrecognised losses of £757,458 (2022: 801,644).

158

159

15 Investments in associates and joint venture (continued)

Derivative financial instruments

The put and call options are carried at fair value through profit or loss. The carrying values for the call options at

31 December 2023 have resulted in a financial asset of £302,319 (2022: £255,994) for Evolve FS Limited (“Evolve”) and

£112 (2022: £64,114) for Heron Financial Limited (“Heron”). The carrying value for the put option has resulted in a

financial liability of £182,984 (2022: £10,280) for Heron at 31 December 2023.

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.

Contingent Consideration

The fair value of contingent consideration at 31 December 2023 was £nil (2022: £nil). During the year, no contingent

consideration was paid (2022: £1.3m) and a gain of £nil (2022: £0.9m) 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

2023
£’000

–

2022
£’000

2,783

–

(2,783)

–

The investment at the start of the prior year represented a shareholding of 2.92% in PD Innovations Limited, trading

as Boomin, at a value of £2.8m. This investment was 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 lead 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.

In 2022, contingent consideration of £115,000 was received relating to the sale of Yourkeys Technology Limited on

23 April 2021. This was £58,000 higher than estimated, resulting in a gain recognised in the consolidated statement

of comprehensive income.

160

161

Financial statements | Notes to the consolidated financial statements (continued) for the year ended 31 December 2023

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

Percentage
of ordinary
shares held
(effective
holding)

Nature of business

Mortgage Advice Bureau Limited

England and Wales

100

Provision of financial services

Mortgage Advice Bureau (Derby) Limited

England and Wales

100

Provision of financial services

Capital Protect Limited

England and Wales

100

Provision of financial services

Mortgage Talk Limited

England and Wales

100

Provision of financial services

MABWM Limited

England and Wales

100

Provision of financial services

First Mortgage Direct Limited

First Mortgage Limited

Property Law Centre Limited

Scotland

Provision of financial services

Talk Limited

England and Wales

100

Intermediate holding company

Mortgage Advice Bureau Australia
(Holdings) PTY Limited

Australia

100

Intermediate holding company

Mortgage Advice Bureau PTY Limited

Australia

100 Holding of intellectual property

Vita Financial Limited

England and Wales

BPR Protect Limited

England and Wales

Provision of financial services

Company Protection Limited

England and Wales

56.3

Provision of financial services

Aux Group Limited

England and Wales

Auxilium Partnership Limited

England and Wales

Provision of financial services

Project Finland Topco Limited

England and Wales

84.3

Intermediate holding company

Project Finland Bidco Limited

England and Wales

84.3

Intermediate holding company

The Fluent Money Group Limited

England and Wales

84.3

Intermediate holding company

Fluent Mortgages Holdings Limited

England and Wales

84.3

Intermediate holding company

Fluent Mortgages Limited

England and Wales

84.3

Provision of financial services

Fluent Mortgages Horwich Limited

England and Wales

84.3

Provision of financial services

Fluent Lifetime Limited

England and Wales

84.3

Provision of financial services

Fluent Money Limited

England and Wales

84.3

Provision of financial services

Fluent Loans Limited

England and Wales

84.3

Provision of financial services

Fluent Bridging Limited

England and Wales

84.3

Provision of financial services

160

161

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

England and Wales

L&P 137 Limited

England and Wales

Mortgage Talk (Partnership) Limited

England and Wales

Financial Talk Limited

England and Wales

Survey Talk Limited

England and Wales

L&P 134 Limited

England and Wales

Loan Talk Limited

England and Wales

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.

162

163

Financial statements | Notes to the consolidated financial statements (continued) for the year ended 31 December 2023

17 Subsidiaries (continued)

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.

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.

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. On 11 April 2023 Mortgage Advice Bureau Limited increased its stake in Project Finland Topco Limited

to 76.2% and further increased its stake on 19 December 2023 to 84.3% (see note 5). 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 and 75% of the ordinary share capital of

Company Protection 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.

162

163

18 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

Total non-derivative financial assets other than cash and cash equivalents
classified at amortised costs

Prepayments and accrued income

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 cashflow

Movement per trade receivables

Accrued interest movement

Accrual of contingent consideration for Yourkeys disposal

Acquired trade and other receivables

Intercompany arising on acquisitions

Total movement per cash flow

2023
£’000

2,028

(454)

1,574

–

924

201

(18)

2,681

6,993

9,674

(77)

(276)

9,321

2023
£’000

(1,445)

–

(1,432)

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

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.

164

165

Financial statements | Notes to the consolidated financial statements (continued) for the year ended 31 December 2023

18 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 22.

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 2023 the

lifetime expected loss provision for trade receivables is £0.5m (2022: £0.5m). 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

2023
£’000

476

–

(22)

454

2022
£’000

374

106

–

(4)

476

165

164

18 Trade and other receivables (continued)

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

2023
£’000

2022
£’000

–

As at 31 December 2023 the lifetime expected loss provision for loans to associates is £0.0m (2022: £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 22.

19 Cash and cash equivalents

Unrestricted cash and bank balances

Bank balances held in relation to retained commissions

Cash and cash equivalents

2023
£’000

3,022

18,918

21,940

2022
£’000

7,219

18,243

25,462

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 20).

20 Trade and other payables

Appointed Representatives retained commission

Other trade payables

Trade payables

Social security and other taxes

Other payables

Accruals

Current

Non-current

166

2023
£’000

18,918

7,644

26,562

2,116

169

9,020

37,867

2023
£’000

35,225

2,642

37,867

2022
£’000

18,243

8,658

26,901

2,190

208

7,350

36,649

2022
£’000

34,397

2,252

36,649

167

Financial statements | Notes to the consolidated financial statements (continued) for the year ended 31 December 2023

20 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 liability for its share of any such repayment as set out in note 23.

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 19.

The non-current portion of trade and other payables relates to Appointed Representative retained commission and

accruals (See note 22).

As at 31 December 2023 and 31 December 2022, 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

Contingent consideration on associates

Fair value measurement of contingent consideration

Share-based payment accruals

Accrued amounts relating to minority interest purchase

Acquired trade and other payables

Intercompany arising on acquisition

Total movement per cash flow

21 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

2023
£’000

1,218

–

(505)

(996)

–

(283)

2023
£’000

18,250

(12,426)

5,824

2023
£’000

5,824

3,750

8,676

18,250

2022
£’000

4,723

1,327

884

(656)

–

(5,192)

(253)

833

2022
£’000

23,407

(16,598)

6,809

2022
£’000

6,809

3,750

12,848

23,407

167

166

21 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.

22 Financial instruments – risk management

The Group is exposed through its operations to the following financial risks:

• Credit risk

• Liquidity risk

• Market 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

• Trade and other receivables

•

Investments in non-listed equity shares

• Derivative financial instruments

• Cash and cash equivalents

• Trade and other payables

• Loans and other borrowings

A summary of financial instruments held by category is provided below:

Financial assets

Cash and cash equivalents

Trade and other receivables (amortised cost)

Derivative financial instruments (FVTPL)

Total financial assets

2023
£’000

21,940

2,681

302

24,923

2022
£’000

25,462

4,101

320

29,883

168

169

Financial statements | Notes to the consolidated financial statements (continued) for the year ended 31 December 2023

22 Financial instruments – risk management (continued)

Principal financial instruments (continued)

Financial liabilities

Trade and other payables (amortised cost)

Loans and borrowings (amortised cost)

Accruals (amortised cost)

Redemption liability (FVTPL)

Clawback liability (FVTPL)

Lease liabilities (amortised cost)

Derivative financial instruments (FVTPL)

Appointed representative retained commission

Total financial liabilities

2023
£’000

7,812

18,250

9,020

2,793

10,331

2,736

183

18,918

70,043

2022
£’000
(restated*)

8,866

23,407

7,350

7,186

8,038

3,947

18,243

77,047

The disclosure of financial liabilities incorrectly excluded the clawback liability, which is a financial instrument, and included £2.2m 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 18.

Financial assets - maximum exposure

Cash and cash equivalents

Trade and other receivables (amortised cost)

Derivative financial instruments (FVTPL)

Total financial assets

2023
£’000

21,940

2,681

302

24,923

2022
£’000

25,462

4,101

320

29,883

169

168

22 Financial instruments – risk management (continued)

Credit risk (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 Appointed Representative retained commission amounts due to the same trading partners that are

included in trade receivables; this collateral of £0.2m (2022: £0.7m) 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+).

Market risk

Interest rate risks

The Group’s main interest rate risk arises from borrowings, both short term facilities and long-term debt, with

floating interest rates that are linked to SONIA. The Group manages the risk by continually reviewing expected

future volatility in UK interest rates and will consider entering into hedges as deemed appropriate to fix the floating

interest rate. A maturity analysis of loans and borrowings is set out in Note 21.

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.

170

171

Financial statements | Notes to the consolidated financial statements (continued) for the year ended 31 December 202322 Financial instruments – risk management (continued)

Liquidity risk (continued)

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 2023
(£’000)

Within 1
year

1 - 2
years

2 -5
years

After 5
years

Trade and other payables
(amortised cost)

Loans and borrowings
(amortised cost)

Accruals (amortised cost)

Redemption liability (FVTPL)

Clawback liability (FVTPL)

Lease liabilities
(amortised cost)

Derivative financial
instruments (FVTPL)

Appointed representative
retained commission
(amortised cost)

31 December 2022
(£’000) (restated*)

Trade and other payables
(amortised cost)

Loans and borrowings
(amortised cost)

Accruals (amortised cost)

Redemption liability (FVTPL)

Clawback liability (FVTPL)

Lease liabilities
(amortised cost)

Derivative financial
instruments (FVTPL)

Appointed representative
retained commission
(amortised cost)

7,812

5,825

7,305

–

10,331

997

–

17,991

50,261

Within 1
year

8,866

6,809

5,644

–

8,038

1,048

–

17,697

48,102

–

3,817

1,046

–

792

183

5,887

1 - 2
years

–

3,750

168

–

994

4,952

8,608

669

2,793

–

1,005

–

700

13,775

2 - 5
years

–

12,848

1,538

169

–

1,857

–

440

16,852

–

178

259

After 5
years

–

7,017

–

345

–

7,438

Total

7,812

18,250

9,020

2,793

10,331

2,875

183

18,918

70,182

Total

8,866

23,407

7,350

7,186

8,038

4,244

18,243

77,344

The disclosure incorrectly excluded the clawback liability, which is a financial instrument, and its maturity analysis as at 31 December 2022.

The disclosure is therefore restated to make this correction. The correction has no other impact on these financial statements.

170

171

22 Financial instruments – risk management (continued)

Liquidity risk (continued)

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.

23 Clawback liability

As at 1 January

Acquisition of subsidiary

Charged to the consolidated statement of comprehensive income

As at 31 December

2023
£’000

8,038

–

2,293

10,331

2022
£’000

5,716

935

1,387

8,038

The balance relates to refund liabilities for the estimated cost of repaying 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. While the

exact timing of any future repayments (termed ‘clawbacks’) within the four-year period is uncertain, it has been

estimated based on both data from protection providers and internal commission data that £4.4m (2022: £3.4m) of

the liability would be payable after more than one year. The liability is based on the Directors’ best estimate, using

industry data where available, of the probability of clawbacks to be made.

172

173

Financial statements | Notes to the consolidated financial statements (continued) for the year ended 31 December 2023

23 Clawback liability (continued)

A liability is recognised in the financial statements of nine of the Group’s subsidiaries: Mortgage Advice Bureau

Limited, Mortgage Advice Bureau (Derby) Limited, Capital Protect Limited, First Mortgage Limited, Fluent

Mortgages Limited, Fluent Mortgages Horwich Limited, Vita Financial Limited, BPR Protect Limited and Auxilium

Partnership Limited.

The clawback liability was incorrectly presented as a non-current liability in the prior year. This has been restated in

the consolidated statement of financial position as a current liability. The correction has no other impact on these

financial statements.

24 Deferred tax

Deferred tax is calculated in full on temporary differences using tax rates of 25% based on when the temporary

differences are expected to unwind (2022: 19% and 25%).

The movement in deferred tax is shown below:

Net deferred tax (liability)/asset – opening balance

Acquisition of subsidiary

Recognised in the consolidated statement of comprehensive income

Deferred tax movement recognised in equity

2023
£’000

(12,862)

–

1,715

449

2022
£’000

1,114

(12,820)

(389)

(767)

Net deferred tax (liability) – closing balance

(10,698)

(12,862)

The deferred tax balance is made up as follows:

Fixed asset differences

Other timing differences

Tax losses

Share-based payments

Net deferred tax (liability)

Reflected in the statement of financial position as follows:

Deferred tax liability

Deferred tax asset

Net deferred tax (liability)

2023
£’000

(13,355)

295

1,138

1,224

2022
£’000

(14,659)

312

659

826

(10,698)

(12,862)

2023
£’000

(11,417)

719

(10,698)

2022
£’000

(14,659)

1,797

(12,862)

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.

172

173

25 Share capital

Issued and fully paid

Ordinary shares of 0.1p each

Total share capital

2023
£’000

2022
£’000

During the year 96,039 ordinary shares of 0.1p each were issued following partial exercise of options issued in 2019

and 2020 at no premium. As at 31 December 2023, there were 57,127,034 ordinary shares of 0.1p in issue (2022:

57,030,995). See also note 30.

26 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

Description and purpose

Share premium

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.

174

Financial statements | Notes to the consolidated financial statements (continued) for the year ended 31 December 2023

27 Retirement benefits

The Group operates several defined contribution pension schemes for the benefit of its employees and also makes

contributions to self-invested personal pensions (“SIPP”). The assets of the schemes and the SIPP are held separately

from those of the Group in independently administered funds. The pension expense represents contributions

payable by the Group to the SIPP and amounted to £1.7m (2022: £1.4m). There were contributions payable to the

SIPP as at 31 December 2023 of £0.3m (2022: £0.2m).

28 Related party transactions

The following table shows the total amount of transactions that have been entered into with related parties during

year ended 31 December 2023 and 2022, as well as balances with related parties as at 31 December 2023 and

31 December 2022.

Commission
received/(paid)

Balance of
retained commissions*

Loans owed to MAB

31 December 31 December 31 December 31 December 31 December 31 December
2022
£’000

2023
£’000

2022
£’000

Relationship

Buildstore Limited

Associate

(830)

(927)

Sort Limited

Associate

1,512

1,492

Clear Mortgage
Solutions Limited

Associate

(5,227)

(4,550)

Evolve FS Ltd

Associate

(3,976)

(2,949)

–

595

178

–

652

Associate

(1,555)

(1,791)

The Mortgage Broker
Limited

Meridian Holdings
Group Ltd

Associate

(3,541)

(4,481)

M & R FM Ltd

Associate

(3,332)

(2,826)

Heron Financial Limited

Associate

(1,776)

Pinnacle Surveyors
(England & Wales) Ltd

Associate

BPR Protect Limited**

Associate

Vita Financial Limited**

Associate

MAB Broker Services
PTY Limited

Joint venture

–

(4)

–

(223)

(717)

–

* Balances in relation to retained commissions are to cover future lapses.

550

184

–

546

107

–

100

–

218

–

319

–

** Vita Financial Limited and BPR Protect Limited were associated companies of the Group until they became subsidiaries on 12 July 2022 following

Mortgage Advice Bureau Limited’s acquisition of Vita Financial Limited.

175

Financial statements | Notes to the consolidated financial statements (continued)

for the year ended 31 December 2023

28 Related party transactions (continued)

During the year the Group received dividends from associated companies as follows:

M & R FM Ltd

Heron Financial Limited

Clear Mortgage Solutions Limited

CO2 Commercial Limited

Evolve FS Ltd

Sort Group Limited

Total dividends received

29 Ultimate controlling party

There is no ultimate controlling party.

2023
£’000

222

125

–

403

2022
£’000

187

–

348

245

130

910

30 Share-based payments

Mortgage Advice Bureau Executive Share Option Plan

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. For options

granted before 2023, 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. For options granted during

2023, the options 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 2023:
• 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 2023:
• 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 2023:
• 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 2023:
• 100% based on performance to 31 March 2024, exercisable between 1 April 2024 and 31 March 2029.

For options granted during 2022 and outstanding as at 1 January 2023:
• 100% based on performance to 31 March 2025, exercisable between 6 April 2025 and 6 June 2030.

For options granted during the year:
• 100% based on performance to 31 December 2025, exercisable between 1 April 2026 and 30 May 2031.

176

177

30 Share-based payments (continued)

Mortgage Advice Bureau Executive Share Option Plan (continued)

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

2023
WAEP
£

0.001

–

0.001

2023
Number

576,003

296,375

(96,039)

(20,310)

756,029

2022
WAEP
£

0.001

–

0.001

2022
Number

460,380

154,850

(16,851)

(22,376)

576,003

* Due to not fully vesting, retirement or leaving the Group.

As at 31 December 2023, 756,029 options over ordinary shares of 0.1 pence each in the Company were exercisable

with a weighted average exercise price of £0.001.

On 31 May 2023, 296,375 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 fair value of £6.31 per option. Exercise of the Options is subject to the

service conditions and achievement of the performance condition based on earnings per share criteria. Subject to

achievement of the performance condition, the Options will be exercisable 2 years and 10 months 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 6 and 11 April 2023 resulted in respectively 1,498 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 £6.80 and

£7.05 per share.

Options exercised on 19 May 2023 resulted in 93,043 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 £8.50 per share.

For the Options outstanding under the Mortgage Advice Bureau Executive Share Option Plan as at 31 December

2023, the weighted average remaining contractual life is 5.9 years (2022: 5.9 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.

176

177

Financial statements | Notes to the consolidated financial statements (continued)

for the year ended 31 December 2023

30 Share-based payments (continued)

Mortgage Advice Bureau Executive Share Option Plan (continued)

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

2023

2022

Black-Scholes

–

Stochastic

£0.001

n/a(1)

3.98%

n/a(1)

£0.001

41.66%

2.70%

1.78%

(1) For option awards that are not subject to market conditions, expected volatility and the risk-free interest rate have no impact on the valuation

The options granted during 2023 are subject to performance criteria based solely on earnings per share performance.

They have a vesting period of 2 years and 10 months from the date of grant and the calculation of the share-based

payment is based on this vesting period.

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.

MAB AR Option Plan

The Group operates an equity-settled share plan, the AR Option Plan, to reward selected Appointed Representative

(“AR”) 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 2023 and there have been no grants of

options during the year.

178

179

30 Share-based payments (continued)

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

Charge for equity settled acquisition options

Charge for cash settled acquisition options

Total costs

2023
£’000

177

(13)

143

293

3,203

626

4,429

2022
£’000

763

324

147

186

1,064

499

2,983

As a result of Fluent minority interest purchases during the period, accelerated equity settled charges of £1.8m and

additional cash settled charges of £0.4m relating to the acquisition options were recognised in the consolidated

statement of comprehensive income.

Options exercised during the period resulted in a transfer from the Share option reserve to Retained earnings of

£0.4m (2022: £0.1m) reflected in the consolidated statement of changes in equity. In addition, £1.9m was transferred

from the Share option reserve to Retained earnings for the cancelled acquisition options as a result of the Fluent

minority interest purchase.

31 Non-controlling interests (NCI)

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.

2023
Summarised balance sheet

Current assets

Current liabilities

Current net assets/(liabilities)

Non-current assets

Non-current liabilities

Non-current net assets

Net Group assets on consolidation

Net assets

Accumulated NCI

First Mortgage
Direct Limited
(“First Mortgage”)
2023
£’000

Project Finland
Topco Limited
(“Fluent”)
2023
£’000

14,585

(7,125)

7,460

3,281

(1,410)

1,871

1,349

10,680

2,386

2,278

(3,605)

(1,327)

11,021

(1,805)

9,216

35,218

43,107

1,289

Total
2023
£’000

16,863

(10,730)

6,133

14,302

(3,215)

11,087

36,567

53,787

3,675

179

178

Financial statements | Notes to the consolidated financial statements (continued)

for the year ended 31 December 2023

31 Non-controlling interests (NCI) (continued)

2023 (continued)
Summarised statement of comprehensive income

Revenue

£’000

22,602

Profit/(loss) for the period and total comprehensive income

3,731

Profit/(loss) allocated to NCI

Dividends paid to NCI

Summarised cash flows

Cash flows from operating activities

Cash flows used in investing activities

Cash flows used in financing activities

Net (decrease) in cash & cash equivalents

781

692

£’000

3,251

(516)

(3,909)

(1,174)

£’000

37,521

(7,772)

(1,345)

–

£’000

550

(594)

(875)

(919)

£’000

60,123

(4,041)

(564)

692

£’000

3,801

(1,110)

(4,784)

(2,092)

Net Group assets on consolidation included above relate to acquired intangible assets and associated deferred

tax liabilities. The profit/(loss) for the period and total comprehensive income includes the amortisation of these

acquired intangible assets and the associated movements in deferred tax.

2022
Summarised balance sheet (restated*)

Current assets

Current liabilities

Current net assets/(liabilities)

Non-current assets

Non-current liabilities

Non-current net assets/(liabilities)

Net Group assets on consolidation

Net assets/(liabilities)

Accumulated NCI

First Mortgage
Direct Limited
(“First Mortgage”)
2022
£’000

Project Finland
Topco Limited
(“Fluent”)
2022
£’000

12,443

3,721

Total
2022
£’000

16,164

(5,213)

7,230

3,213

(1,838)

1,375

1,630

10,235

2,297

(27,395)

(32,608)

(23,674)

(16,444)

19,094

(764)

18,330

38,478

33,134

4,654

22,307

(2,602)

19,705

40,108

43,369

6,951

180

181

31 Non-controlling interests (NCI) (continued)

2022 (continued)
Summarised statement of comprehensive income

Revenue

£’000

18,220

Profit/(loss) for the period and total comprehensive income

2,534

Profit/(loss) allocated to NCI

Dividends paid to NCI

Summarised cash flows

Cash flows from operating activities

Cash flows used in investing activities

Cash flows used in financing activities

Net increase in cash & cash equivalents

507

415

£’000

6,201

(730)

(1,659)

3,812

£’000

21,883

(8)

(2)

–

£’000

1,261

(1,319)

(1,725)

(1,783)

£’000

40,103

2,526

505

415

£’000

7,462

(2,049)

(3,384)

2,029

The disclosure has been restated to disclose clawback liabilities within current liabilities, which were incorrectly included within non-current

liabilities. The correction has no other impact on these financial statements.

32 Contingent liabilities

The Group had no contingent liabilities as at 31 December 2023 or 31 December 2022.

33 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.

34 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

2023
£’000

3,022

18,918

21,940

2022
£’000

7,219

18,243

25,462

180

181

Financial statements | Notes to the consolidated financial statements (continued)

for the year ended 31 December 2023

34 Notes supporting statement of cash flows (continued)

A reconciliation of liabilities from financing transactions is set out as follows:

Balance as at 1 January 2022

Cash flows:

Principal loan amounts

Loan arrangement fees

Loans and
borrowings
£’000

–

23,200

(282)

Settlement of loan notes and accrued interest on acquisition

(21,891)

Repayment of borrowings

Principal lease payments

Non-cash flows:

Acquisition of subsidiaries

New leases

Accrued interest

Unwinding of loan arrangement fees

Disposals

(1,500)

–

23,391

–

426

–

Balance as at 31 December 2022 and 1 January 2023

23,407

Cash Flows:

Repayment of borrowings

Principal lease payments

Non-cash flows:

New leases

Accrued Interest

Unwinding of loan arrangement fees

Lease remeasurement

(5,350)

–

116

–

Balance as at 31 December 2023

18,250

Leases
£’000

2,596

–

(547)

1,016

919

–

(37)

3,947

–

(907)

–

(317)

2,736

Total
£’000

2,596

23,200

(282)

(21,891)

(1,500)

(547)

24,407

919

426

(37)

27,354

(5,350)

(907)

116

(317)

20,986

182

183

Financial statements | Company statement of financial position

as at 31 December 2023

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 80.

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 £16.0m (2022: £16.0m).

Note

2023
£’000

2022
£’000

Fixed assets

Investments

Current assets

Debtors

Net assets

Capital and reserves

Called up share capital

Share premium account

Capital redemption reserve

Retained earnings

8,565

5,361

45,341

53,906

48,155

5,674

53,906

45,341

50,702

48,155

2,470

50,702

The notes on pages 182 to 187 form part of these financial statements.

The financial statements were approved by the Board of Directors on 19 March 2024.

P Brodnicki

Director

L Tilley

Director

182

183

Financial statements | Company statement of changes in equity

for the year ended 31 December 2023

Share
capital
£’000

Share
premium
£’000

Capital
redemption
reserve
£’000

Balance as at 1 January 2022

9,778

Profit for the year

Total comprehensive income

Transactions with owners

Issue of shares

Share-based payments

Dividends paid

Transactions with owners

–

38,377

–

38,377

–

Balance as at 31 December 2022
and 1 January 2023

48,155

Profit for the year

Total comprehensive income

Transactions with owners

Issue of shares

Share-based payments

Dividends paid

Transactions with owners

–

As at 31 December 2023

48,155

Retained
earnings
£’000

1,406

16,023

–

1,064

(16,023)

(14,959)

2,470

16,038

–

3,204

(16,038)

(12,834)

5,674

Total
Equity
£’000

11,257

16,023

38,381

1,064

(16,023)

23,422

50,702

16,038

–

3,204

(16,038)

(12,834)

53,906

184

185

Financial statements | Notes to the Company statement of financial position
as at 31 December 2023

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.

184

185

Financial statements | Notes to the Company statement of financial position (continued)

as at 31 December 2023

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 2023

Additions

As at 31 December 2023

Net book value

As at 31 December 2023

As at 31 December 2022

Subsidiary
undertakings
£’000

5,361

3,204

8,565

5,361

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

Nature of
business

Mortgage Advice Bureau Limited

England and Wales

100

Provision of financial services

Mortgage Advice Bureau (Derby) Limited

England and Wales

100

Provision of financial services

Capital Protect Limited

England and Wales

100

Provision of financial services

Mortgage Talk Limited

England and Wales

100

Provision of financial services

MABWM Limited

England and Wales

100

Provision of financial services

First Mortgage Direct Limited

First Mortgage Limited

Property Law Centre Limited

Scotland

Provision of financial services

Talk Limited

England and Wales

100

Intermediate holding company

Mortgage Advice Bureau Australia
(Holdings) PTY Limited

Australia

100

Intermediate holding company

Mortgage Advice Bureau PTY Limited

Australia

100 Holding of intellectual property

Vita Financial Limited

BPR Protect Limited

England and Wales

Provision of financial services

Company Protection Limited

England and Wales

56.3

Provision of financial services

186

187

3 Investments (continued)

Company name

Aux Group Limited

Country of
Incorporation

England and Wales

Auxilium Partnership Limited

England and Wales

Percentage
of ordinary
shares held

Nature of
business

Provision of financial services

Project Finland Topco Limited

England and Wales

84.3

Provision of financial services

Project Finland Bidco Limited

England and Wales

84.3

Provision of financial services

The Fluent Money Group Limited

England and Wales

84.3

Provision of financial services

Fluent Mortgages Holdings Limited

England and Wales

84.3

Provision of financial services

Fluent Mortgages Limited

England and Wales

84.3

Provision of financial services

Fluent Mortgages Horwich Limited

England and Wales

84.3

Provision of financial services

Fluent Lifetime Limited

England and Wales

84.3

Provision of financial services

Fluent Money Limited

England and Wales

84.3

Provision of financial services

Fluent Loans Limited

England and Wales

84.3

Provision of financial services

Fluent Bridging Limited

England and Wales

84.3

Provision of financial services

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

187

186

Financial statements | Notes to the Company statement of financial position (continued)

as at 31 December 2023

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.