Mortgageforce reports loss in 2009/10
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Mortgageforce says it has recovered this financial year after losses of £239,800 for the year ending March 2010.
The loss compares to a £7,784 profit in 2008/09.
The brokerage saw a 19% fall in total revenue, down from £3m in the previous year to £2.4m in 2009/10 and a 58% fall in gross profit from £1.3m in 2009 to £540,689 in 2009/10.
It also reduced its number of management and administration staff from 27 to 15.
But Kevin Duffy, managing director at Mortgageforce says this was the lowest point in the recessionary cycle.
He says: “The results period straddles the lowest point of the recessionary cycle and features a budgeted and manageable result.
“Revenues fell only 19% against an industry norm of over 45% and the present financial year is showing a 22% increase in revenues and a 30% uplift in brokerage . The business is well-capitalised & is emerging from the downturn in significantly better shape than very many of its peers.”
In May the firm’s parent company West Bromwich Building Society revealed that it was selling its share in the brokerage.
It has agreed in principle to sell Mortgageforce to the management team for a nominal consideration while retaining a small minority interest.
The brokerage’s accounts say: “At the date of approval of these financial statements, the sale and purchase agreement has been agreed, subject to certain conditions being fulfilled, however the sale has not yet completed.”
The accounts go on to say: “The lack of visibility over the company’s future trade under new ownership means there is a material uncertainty which may cast significant doubt on the company’s ability to continue as a going concern, and it may, therefore, be unable to realise its assets and discharge its liabilities in the normal course of business.”
Duffy adds: “The change of ownership is scheduled to be completed in the next few weeks which will see the West Brom remaining as a shareholder in the re-configured business.”
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Readers' comments (6)
Anonymous | 5 Jan 2011 10:21 am
if this was as tough as it got for mortgageforce then these figures arent bad at all . there are networks out there still losing over £100k per mth .
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Anonymous | 5 Jan 2011 11:27 am
That's probably true, anon, but these figures reflect the period to March 2010. It will be interesting to see the 9 month results to the end of December.
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Anonymous | 5 Jan 2011 12:03 pm
During this accounting period I can remember numerous brokerages going bust and taking a lot of good people down with them along with a lot of income owed to those guys. Arguably one of the toughest periods of trading seen in the industry ever and for mortgageforce to have come out with a loss of £240k is paltry compared to the millions that other brokerages and networks collapsed losing. Kevin Duffy and his team have overcome massive challenges and emerged with a fitter leaner company for it. Kevin Duffy will take ownership shortly and an exciting year lies ahead!
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Roger Morris | 5 Jan 2011 1:02 pm
Since Kevin Duffy took charge of Mortgage Force he has turned the company around. He inherited a company that wasn't cost effective and has streamlined this into one of the most cost effective companies around. There is no surprise that the company lost money but nothing like what it could of lost. Owned by a Building Society things take time to change and I think with the future now set for Mortgage Force things can only get better.
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Rob Jupp | 5 Jan 2011 1:50 pm
I think Mortgage Force's stance in reporting this so openly is about as transparent and forthright as I’ve seen for a long while and pretty refreshing. The financial year April 2009 to March 2010 was about as tough as it was possible to get and I think with this in mind these results are entirely understandable. A 19% loss of revenue compared to industry average of 45% seems pretty impressive. The fact remains that in January 2011 Mortgage Force is still in business and trading when a large number of their former peers aren't. Those that can survive will inherit the market and opportunities that will come as a result of their longevity.
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Anonymous | 5 Jan 2011 7:25 pm
The key point in the release is the role of West Brom which itself has made a strong recovery over the past 18 months.
Well done Mortgage Force for seemingly agreeing a deal which keeps the Society involved.
I daresay that mortgage leads from its forty or so branches are being well looked after by Mortgage Force.
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