Numbers

The Numbers

MAB is a small, cash-generative UK financial-distribution business with structurally high returns on equity (about 20%) and a 10y revenue CAGR near 17%, but the share price is two-thirds below its 2021 peak because reported pre-tax profit has been stuck around £22M for four years while the company spent £50M+ on acquiring Fluent Money in 2022. The headline that matters in the FY2025 results is adjusted pre-tax profit of £36M (+50% YoY) and 121% cash conversion — i.e., the underlying operating engine reaccelerated after a multi-year mortgage-market drought, but reported earnings still carry £8–14M of acquisition amortisation and exceptional drag. The single metric most likely to rerate or derate the stock is whether adjusted PBT margin recovers from 11.3% back toward the 12–15% band the company sustained pre-Fluent and explicitly targets by 2029.

A. Snapshot — what you're buying at 535.5p

MAB is the UK's largest mortgage intermediary network — about 2,135 advisers across roughly 200 Appointed Representative firms, arranging more than £32B of mortgages a year and holding 8.4% share of new UK mortgage lending. The business earns procuration fees from lenders (largest), protection commissions from insurers, and consolidates revenue from "Invested Businesses" — most importantly Fluent Money, acquired in 2022.

B. Quality scorecard — small, sticky, cash-generative

The quality picture is genuinely good on returns and cash conversion, but two flags need tracking: goodwill plus intangibles equal 163% of equity (a Fluent Money legacy — £70M goodwill, £54M intangibles), and the dividend is barely 1.2× covered by reported earnings, leaving little buffer if the housing cycle turns again.

C. Revenue and earnings power — 16-year view

Two stories live in these two charts. Revenue has compounded for sixteen years with only one mild dip (2020 Covid). But pre-tax margin has not recovered: 16% peak (FY2016) collapsed to 6.8% in FY2023 and is still only 6.9% on a reported basis in FY2025. That gap is partly Fluent Money's lower-margin specialist-lending mix being consolidated since 2022, and partly amortisation of acquisition intangibles (£8M+ a year). The company-reported adjusted PBT margin of 11.3% strips those out and is the truer operating-margin reading.

D. Half-yearly trend — the FY24/FY25 reacceleration

The half-year shape tells the cycle story cleanly. Revenue jumped in H2 FY2022 partly because Fluent Money was consolidated mid-year, then growth flatlined through FY2023 as the UK mortgage market collapsed under sharp BoE rate hikes. Both halves of FY2025 grew ~20% YoY — the strongest underlying half-yearly growth since the Fluent acquisition. Pre-tax pattern is noisier because acquisition amortisation and one-offs land unevenly between halves.

E. Cash flow — earnings convert to real cash

Operating cash flow has exceeded net income every year for a decade — the structural advantage of the network model is no inventory, minimal receivables risk, and procuration fees that settle quickly. FCF/NI has averaged 1.6× over the last 5 years (the spike vs reported NI is partly the £8M+ of non-cash amortisation flowing through net income post-Fluent). FY2025 FCF of £33.1M is the highest in MAB's history. Dividends paid (£12.8M) used 39% of FCF, leaving roughly £20M of unallocated cash even after the Fluent earn-out and small bolt-ons.

F. Capital allocation — Fluent dwarfs everything

The £50M Fluent Money cheque in FY2022 is the only thing on this chart that is not a dividend or a small bolt-on. Outside that single transaction, MAB's playbook for ten years has been a near-mechanical "earn it, pay most of it out". Cumulative dividends since the FY2014 IPO total roughly £135M versus cumulative M&A of about £85M (mostly Fluent-related) and capex of just £10M.

G. Balance sheet — small, intangible-heavy

Two facts to note. First, equity barely moved from £75M to £76M between FY2022 and FY2025 — three years of retained profit was largely matched by dividends, intangible amortisation, and a small FY2025 bolt-on (which lifted goodwill by £16M to £70M). Second, MAB went into FY2022 with £25M cash and £20M debt to fund the Fluent deal, and has steadily delevered: long-term debt is now £5.6M against £26.6M cash, leaving the firm with about £21M of net cash heading into FY2026.

H. Returns on capital — durable mid-teens / low-twenties

Pre-Fluent, MAB ran on a tiny equity base and reported ROE between 50% and 90% — a textbook capital-light network. The 2022 deal added £55M of intangibles and £55M of equity-like consideration, halving ROE structurally. The 18–21% range it has settled into since is still very good for a UK financial-services company; it just is no longer extraordinary.

I. Valuation — current vs its own history

The chart on the left is the valuation conversation in one image. P/E ranged 20–40× through 2014–2021 when MAB was a capital-light compounder; the multiple compressed to 22× during the 2022–2024 mortgage drought, and at 535.5p the stock now trades at roughly 20.8× trailing reported EPS and 8–9× trailing adjusted PBT. P/B has rebased from 15× pre-Fluent to about 4–5× because the equity base is now four times larger.

A 10.6% trailing FCF yield with a 4.1% dividend yield, on a balance sheet with £21M of net cash, is comfortably more attractive than the bare 21× P/E suggests. The FCF gap matters because amortisation of Fluent intangibles depresses GAAP earnings without affecting cash returns to the parent.

J. Peer comparison — the closest direct comp is Tatton

The honest answer is that there is no clean public comp for MAB. Tatton (TAM) is closest — a UK adviser-distribution platform with similar revenue-share economics and equally high ROE — but its discretionary fund management franchise commands a 28× P/E versus MAB's 21×. The true-direct comp Property Franchise Group screens cheaper (13.5× P/E) on better growth and similar margins; that is the gap MAB's CFO will be asked about every quarter. OSB and MNG are not really peers — they're balance-sheet financials whose multiples reflect different capital structures.

K. Fair value — bear / base / bull

The bear case is the cycle repeating — UK BoE rate cycle runs the wrong way, mortgage approvals soften again, advisers' productivity slips. The base case is mechanical: 12× a £42M adjusted PBT (12% margin × £350M revenue, both inside management's targets) gets you ~600p. The bull case requires the 2029 plan to land — double revenue and market share, adjusted PBT margin north of 15% — and a re-rating to the 15× the multiple compounders earn.

What the numbers say

The numbers confirm the structural quality of the network model — sixteen straight years of revenue compounding (15.5% 10y CAGR), 121% cash conversion, 20% ROE, an essentially ungeared balance sheet with £21M of net cash. They contradict the bearish "MAB is a small, cyclical, post-acquisition value-trap" framing — adjusted PBT just grew 50% YoY, both halves of FY2025 grew 20%, the dividend has been maintained through the worst UK mortgage market in a decade, and the £70M of goodwill has not impaired despite three years of pressure. The two things to watch into FY2026 results are: (1) whether adjusted PBT margin steps up toward 12% on the way to management's 15% 2029 target, and (2) whether the £100M+ goodwill-and-intangibles line stays clean — any Fluent-related impairment would be the single biggest negative surprise the company could produce.