‘The real game isn’t being on the ASX’: Mark Bouris

The group, which was founded by executive chairman Mark Bouris, has been publicly listed since 2008 but halted trading on the Australian Ssecurities Exchange (ASX) on Thursday, 14 September as it revealed that it was applying to be removed from the official list of the ASX.

It confirmed on Monday, 18 September that it would be removing itself from the ASX.

The statement reads that the board “considers the delisting to be in the best interests of the company and its shareholders”.

While the company is listed, it does not have a substantial free float. Instead, it is largely controlled by four substantial shareholder parties: Mark Bouris’s Golden Wealth Holdings; Nine Entertainment Group’s Pink Platypus Pty Ltd; Gabriel Radzyminski’s investment company Sandon Capital Pty Ltd; and Ross Laser’s asset management company Magnetar Financial LLC. These shareholders hold approximately 62 per cent of YBR’s issued capital.

As such, the board has long believed that its share price ($0.058 per share at the time of the trading halt on Thursday) is not a true reflection of the company’s value and restricts it from being able to deliver value to shareholders. Moreover, it provides "very limited trading opportunities for shareholders to exit their positions and for new investors to gain stock", the update to the ASX states.

A general meeting will be held on 24 October to approve the delisting. If approved, it is expected that the company will be removed from the official list on 27 November.

Speaking to The Adviser about the move to delist, YBR executive chairman Mark Bouris said that the decision had been made to ensure the group could “be strategic” by embracing opportunities in the current market and saving money on ASX-related administrative and reporting costs. For example, the company estimates that delisting its 326 million shares would save approximately $350,000 per annum in expenses.

“This does not affect our business in any way. It doesn’t slow our business, it doesn’t speed our business up …

“There’s no negative outcomes in relation to this. Nothing’s changed.”

He added that being a private company may also make the business more attractive to other businesses.

According to YBR, with a current market capitalisation of around $18 million to $20 million, "there is very little to no interest from stockbroking firms and financial analysts to do research on YBR, let alone recommend YBR as "undervalued" or a "buy" to the clients".

However, Mr Bouris emphasised to The Adviser that the move was about “being strategic about what we want to do as a group, as opposed to trying to assist anybody else”.

The executive chairman added that the group would be buying back unmarketable parcels of shares (those valued at less than $500, which are difficult to sell on the ASX).

“We’ll be buying back unmarketable parcels … so buying those back from individuals so they’re not trapped any longer ... We’ve got plenty of cash,” he said.

‘I don’t want to be second place’ – Mark Bouris

Mr Bouris told The Adviser that the group had reassured brokers at its annual conference (which it held last week in Hamilton Island), that it was business as usual and that business was going to “continue on with the same staff that they deal with, whether it’s the COO, the CFO, the head of distribution, or the business development managers (BDMs) or commissions team”.

He added that the group was pushing forward with its strategy of being ‘the best’ broking group.

He explained: “For YBR, our biggest focus is to have the best-branded franchise broking business in the country. We’re probably already close in that category in terms of being recognizable and we want to be number one in terms of our franchise offering. So, if you want to become a franchise or branded broker, we want to have the best offer in the marketplace. That’s not just about commission and the ability to make money, it’s also about the products that we offer – which is where Resi comes in – and it’s also about our service proposition how we look after you with our BDMs and our distribution platform.

“In terms of VOW, we also want to have the best aggregation platform in the marketplace. We use Salestrekker and we consider that to be the best platform in the market. And we want to have the best product range and the best BDMs.”

Mr Bouris acknowledged that while bigger groups may supersede it on volume (having more brokers than its 118 YBR franchisees and 1,102 Vow brokers), it is positioning itself to become “the leading non-bank lender and mortgage broking services company in Australia”.

“I don’t want to be second place,” Mr Bouris said.

“I’m talking about being the best. That’s my big emphasis. We want to have the best brand, the best-known brand, the best reputation, have the best people working for us, have the best franchise model, and have the best aggregation model. I want to be number one in every category.”

He concluded: “Sometimes your attention can get distracted from the real game. And, for us, the real game isn’t being on the ASX. For us, the real game is being the best in every category. And I don’t want to spend any money on anything else other than those pillars.

“I don’t want to be worried about this [ASX] report or that report etc ... I’m only interested in hitting every one of those pillars That’s our game.”

Changing market, changing focus

The group has been impacted by the recent softening in new mortgage demand in Australia. According to the Australian Bureau of Statistics (ABS), the value of new loan commitments dropped by around 20 per cent in FY23 and the number of owner-occupier first home buyer loans fell 12 per cent.

YBR’s most recent financial results show that its settlements dropped 7.2 per cent from the record $21.4 billion in FY22 to $19.9 billion in FY23.

Despite the drop, the FY23 settlement result still reflected a 48 per cent increase over its FY21 result of $13.4 billion.

The results also showed that YBR Group’s loan book grew 6.8 per cent, reaching $63 billion, up from $59 billion in FY22.

Speaking to The Adviser last month, YBR’s chief financial officer, Stephen McKenzie, said that the group’s focus was to grow broker numbers and leverage the group’s recent investments.

It continues the group’s repositioning after selling off its stake in wealth investment service (Smarter Money Investment) in 2019 and its financial planning arm (YBR Wealth) in 2020 before launching its lending arm, Resi Wholesale Funding, a joint venture with Magnetar Capital (which has a white-label and warehouse offering).

[Related: YBR looks to grow broker numbers in FY24]