Mortgage and wealth group Yellow Brick Road (YBR) has delivered its first ever profit, bringing in $0.4m after tax in H1 FY2017.
This is a $4.5m improvement on the $4.1m loss the company experienced in the first half of FY2016 and was backed up by strong performance in the YBR lending business.
Settlement volumes grew by 20% across the YBR network with all lending distribution channels except Vow Flat Fee low margin settlements experiencing positive growth.
The drawn value of the company’s loan book increased by 11% to $41bn from $37bn as of 30 June 2016 while the embedded value of the underlying loan book (capitalised on the YBR balance sheet) grew by 6% to $46.1m in the same time period.
In the first half of FY2017, YBR’s white label settlement penetration was less than anticipated. In response to this, the firm created a centralised group lending function to consolidate the capacity and offerings of the YBR network and recent acquisitions, Resi and Loan Avenue.
YBR listed a number of key strategic priorities to improve efficiency and increase stakeholder value. One of these was a boosted focus on the recruitment of high value brokers who possess experience and business acumen to operate successful YBR branches and leverage the brand.
The company’s training resources now focus on up-skilling and cross-selling as opposed to simply teaching brokers how to run a business.
Finally, YBR has said it will adopt stricter performance guidelines to improve the productivity and effectiveness of franchise operations. In a review of all branches over the past six months, the firm has replaced a number of underperformers.
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