Firstfolio still dealing with legacy issues

The restructure in progress at mortgage company Firstfolio continues to have an impact on its financial performance. After reporting a loss of A$4.1 million for the year to June, the company yesterday reported that it made a loss of $2.6 million for the December half.

The company said the result included a $4.9 million non-cash adverse movement in the net present value of its assets.

On a cash basis, Firstfolio made a profit of $2.3 million for the half - down from $2.5 million for the previous corresponding period.

Loan settlement volume was steady, compared with the previous corresponding period, at $1.6 billion. The value of the loan book fell by $500 million to $17.7 billion.

After coming through a debt crisis that occupied it for a couple of years, the company re-emerged late last year with a new chief executive and a new business strategy.

The company expects the driver of growth to be its eChoice division, which is an online aggregation and broking business.

Firstfolio chief executive Peter Andronicos said in a statement that eChoice was well placed to take advantage of the growing demand for online marketing and distribution of mortgages and other financial products.

Aggregation and broking volumes contributed 94.9 per cent of settlements during the half.

One problem for the company is that the change in the business mix from wholesale origination to aggregation and broking has cut into its margin. Revenue was down 6.4 per cent to $35.1 million - most of that due to a fall in fee and commission income.