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Yellow Brick Road has forecast that it will finally post a profit in 2014/2015, following $29 million of losses over seven years.
The mortgage and wealth group posted an $8.8 million loss for the 12 months to 30 June 2014, which marked a 33.2 per cent decline on the $6.6 million loss from the previous year.
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However, that result was affected by more than $2.8 million of one-off costs, including $2 million of impairment charges and $830,000 of acquisition-related costs.
Revenue jumped 27.3 per cent to $31.7 million, while expenses rose 1.2 per cent to $16.8 million.
Branch numbers grew 22.6 per cent, from 168 to 206, while settlements climbed 23 per cent to $1.5 billion.
The loan book increased 49.4 per cent to $2.7 billion and funds under management jumped 55.3 per cent to $427 million.
Yellow Brick Road’s recent acquisitions of Vow Financial and Resi Mortgage Corporation have now been officially completed after being approved by shareholders.
The group has recorded successive annual losses since 2007/2008, which have now reached a cumulative total of $29.3 million.
However, Yellow Brick Road said it had now completed its “establishment phase” and would use the scale it had accumulated to “track toward ongoing and sustainable profitability”.
“Notwithstanding the acquisitions and the opportunities they represent in relation to the broader strategy of the group, the focus for Yellow Brick Road as a standalone business will be to continue the growth path of the branch network,” it said.
“The culmination of this strategy is to get the group to profitability in 2014/2015.
“Yellow Brick Road’s current trajectory, combined with the existing profitability that both Resi and Vow bring to the organisation, means that the group will have scope for strong growth well into the future.”
The three businesses will operate independently, but will benefit from having “vastly improved economies of scales” alongside a “multi-channel and multi-product capability”.
Meanwhile, Yellow Brick Road has announced that it has entered into a new five-year consultancy agreement with executive chairman Mark Bouris until 2019.
[Related: Vow acquisition ‘ticks all the boxes’]
