Yellow Brick Road gambles on growth
Yellow Brick Road doubled its revenue during the December half but none of the increase flowed through to the bottom line, which showed yet another loss for the mortgage broking and investment advisory business.The company reported a loss of A$4.05 million for the six months to December, compared with a loss of $4.2 million in the previous corresponding period.Revenue was $116 million during the half - up from $59.2 million.YBR executive chairman Mark Bouris said the company had increased its marketing budget to take advantage of what it saw as an opportunity to build market share.Bouris said: "The decision to invest in future growth, rather than short-term return, is an integral part of the company's strategy to become Australia's leading non-bank financial services company by 2020."The company is taking a gamble. It suffered a net cash outflow from operating activities of $3.2 million. Cash and cash equivalents fell from $10.7 million to $6.6 million during the half.On the other hand, loan settlements grew 41 per cent to $8.4 billion and the loan book grew 24 per cent to $32.3 billion.In the wealth division, funds under management grew by 35 per cent to $699 million.The group has 1263 advisers, compared with 960 a year earlier, and 276 financial advisers (up from 153).The company has made changes to its business structure. It now has two "strategic verticals" - lending and wealth management. The change marks the completion of the integration of two recent acquisitions, Vow Financial and Resi Mortgage Corp.The chief executive of the lending division is Tim Brown, who was the head of Vow Financial. The chief executive of wealth management is Matt Lawler. Scott Graham is the chief commercial officer.