Peter Brodnicki: MAB’s journey to becoming a plc

Having decided that a listing on AIM was the right direction for Mortgage Advice Bureau, I spoke to businesses in the property and financial services sectors that had gone through the process to better understand what we were letting ourselves in for.

We received some great advice, as well as being warned it would be a heavily time-consuming, costly and stressful process with no guarantees at the end of it all.

Like the businesses owners we spoke to, the MAB directors were very clear about the future of the business and what we wanted to achieve.

Getting started

Our first meeting was with the Stock Exchange, which talked us through the process and provided advice on how to choose a Nomad, a firm that would effectively take us to market.

A very useful piece of advice was to think about whether you would choose to go out for a beer with the Nomad team you select as you will be spending an incredible amount of time with them. As you can imagine I did not need much convincing of that approach.

They also said the Nomad analyst was crucial to our decision-making process as his/her passion and belief in our business was essential.

In addition, we needed a financial PR company and three non-executive directors (including a chairman), and so the interviews continued until we had a team we were really happy with. I have to say we were lucky enough to meet some fantastic people and, as a result, we had some difficult decisions to make.

I really do not think I could have got through the five months that then followed without my chief operating officer, David Preece. His attention to detail, patience and in depth knowledge of all matters legal was essential. You cannot just rely on external expertise, even though I know many probably have to if they do not have somebody like David in their team.

You have to learn about things you have little or no knowledge of to be able to make the right decisions, and the clock is always ticking. However well you plan, 101 things can happen in the last few weeks when it all comes together.

Telling the market

To cut a long story short, after five months we were ready to make our first public announcement about our intention to float.  

But then came a real hammer blow just as we were due to make the announcement: the stock market had its worst fall for over 18 months, tumbling over 700 points in just three days. Further, Aldermore, Virgin Money and others announced delays to their planned listings.

When we had started our research nine months earlier, new listings on AIM were at an all time high and valuations were strong, but how things had changed. The City was feeling negative about new listings and the market had taken a massive tumble.

So what to do?

We decided to go ahead with planning the 50 or so investor meetings we needed to go through, although we were uncertain of the reactions we would get. But we held back on announcing our intention to float to see how the market performed over the following few days.

Many potential investors were extremely surprised we were listing in such a volatile market, but they seemed to like the story and, as a result, the diary soon filled up. Days later, with the market more stable, we decided to formally announce our decision.

MAB IPO 2

The press reaction we received was generally very positive although some said I must be mad and others that it was a brave move.

Impressing the investors

But the real test was what potential investors would think about our business.

As we were preparing for our first day of presentations, there was a tsunami of negative headlines about the housing and mortgage markets. 

With so much hinging on every meeting, combined with the intensity of having so many meetings over such a short period, it was certainly the toughest two weeks of my life, although also an incredible experience.

I must say I was delighted by the response of the potential investors we met, not only in terms of the MAB model and performance but also because they got why we were so excited and passionate about the future of the intermediary market.

The last few days were the most stressful of all as we watched how the investors we had met were responding to our presentations and price announcement.

It was like an election, seeing the votes come in and trying to predict the likely outcome.

In the end we received great support and the IPO was actually over-subscribed, which is a big vote of confidence for the broker market.

We had our day of celebration at the London Stock Exchange on the official listing day and it was a day that none of my team and their partners will ever forget.

It is now back to the day job, and the next stage of the MAB journey, which I believe will be even more exciting as we enter 2015 as a plc.