Mortgage Choice questioned over share price

The broking group received a letter from the ASX today about a change in the price of its securities.

“Is the entity aware of any information concerning it that has not been announced to the market, which, if known by some in the market, could explain the recent trading in its securities?” the letter read.

In response, Mortgage Choice said it was “not aware of any information that its earnings for the 12-month period ending on 30 June 2016 are likely to come as a surprise to the market either by reference to analyst forecasts for the period or its earnings for the prior corresponding period”.

Mortgage Choice’s share price has surged by 24.7 per cent since last Thursday morning, 16 June. As of 2pm today, the company’s share price was sitting at $2.12, up more than 6 per cent since the start of trading.

John Flavell, CEO of Mortgage Choice, said the company's recent share price growth is simply reflective of its strong performance over the last 12 months.

“At the half-year financial results, we reported a 12.4 per cent increase in cash net profit after tax in comparison to the prior corresponding period," he said.

Since then, Mr Flavell said Mortgage Choice has continued to deliver exceptionally strong business results.

“In March, we reported that continued revenue growth and prudent expense management had resulted in the Mortgage Choice Financial Planning division delivering its first profitable monthly result,” he said.

“Since then, the proportion of recurring revenue coming from ongoing advice fees and insurance renewal premiums has continued to grow strongly, allowing the financial planning business to turn its second monthly profit result.

Mr Flavell is confident Mortgage Choice’s positive results “are repeatable” due to the continued growth in new business across the company.

“I think it is also important to note that in recent years, Mortgage Choice’s share price has tracked well in excess of our current pricing.”