Mortgage Choice has slashed its interim dividend after a 44 per cent fall in first-half profit, citing uncertainty over the long-term effects of a final royal commission report that recommended an overhaul of the broking industry.
The mortgage broker said its first-half net profit slumped to $6.39 million after revenue for the six months to December 31 fell nine per cent to $87.19 million.
It cut its interim dividend by two-thirds to three cents and pointed to the recommendation by Commissioner Kenneth Hayne that trailing commissions to mortgage brokers for new loans be banned.
"The company's board of directors have decided it is prudent to retain a proportion of the company's earnings to address the uncertainty arising from the Royal Commission's recommendations regarding broker remuneration," Mortgage Choice said in a statement.
"The half-year results are as we anticipated," chief executive Susan Mitchell said, adding that the fall in profit was largely due to "changes to the broker remuneration model account" and a new set up that started in August.
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Mortgage Choice was forced to overhaul its remuneration structure last year following unrest from franchisees.
"The new broker remuneration model has been in place for five months and pays franchisees more whilst reducing their income volatility when the market slows," Ms Mitchell said.
MORTGAGE CHOICE H1 PROFIT FALLS
* Net profit down 44 pct to $6.39m
* Revenue down 9 pct to $87.19m
* Interim dividend down 6 cents to 3 cents per share, fully franked
