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Further industry consolidation may be around the corner after Yellow Brick Road revealed it is in talks to buy three companies.
The franchise group announced it had targeted an aggregator, a mortgage manager and a “consumer product rating and lead generation group”. Their names were not disclosed.
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“We have started this calendar year in earnest and have currently executed three confidentiality and exclusivity agreements to acquire accretive businesses in the financial services sector,” Yellow Brick Road said.
“These are currently subject to due diligence investigations and, whilst there is no guarantee that these acquisitions will be completed, there are strong strategic imperatives behind them for our group.”
Yellow Brick Road said the potential acquisitions would “broaden our capability in mortgages, investment and insurance products and advice”.
They are also expected to add scale, generate efficiencies and be “highly complementary to our current platform and product suite”.
Yellow Brick Road said its “strong” balance sheet could support the acquisitions.
The group posted a $3.6 million loss for the six months to 31 December 2013, a four per cent improvement on the previous year’s result.
Loan book exceeded $2 billion, revenue jumped 59.4 per cent year-on-year to $15.3 million, while operating expenses rose 19.5 per cent to $9.3 million.
Yellow Brick Road has forecast it is on track to deliver its first annual profit in 2014/15.
