Listed broking group Mortgage Choice has just announced that it will wind up its comparison website.
As a consequence of a comprehensive strategic and operational review, Mortgage Choice has made the decision to shut down its Help Me Choose business unit.
Mortgage Choice presented its 2014-15 financial results in August and chief executive officer John Flavell made it clear that Help Me Choose’s financial result needed addressing.
“The less than favourable financial result of the Help Me Choose business prompted a comprehensive review of the operation and a decision has been made to close it down in its current form,” Mr Flavell said.
“Mortgage Choice will continue to focus on evolving the Mortgage Choice business by building a compelling and differentiated financial services offering and, in turn, providing sustainable earnings for its shareholders.
“Capitalising on the significant opportunities facing Mortgage Choice requires focus, and continuing to invest in a business that is unlikely to be profitable in the foreseeable future does not make sense.”
At the group’s full-year results last month, the Help Me Choose business results was noted as “a matter of urgency” by Mr Flavell.
An investment was made in headcount in order to capitalise on seasonal uplifts in the second half of the 2015 financial year, but the uplift wasn’t there.
“In hindsight, the headcount was recruited too early and the improved results in May/June did not increase revenue in proportion to the cost increases,” the company said in a statement.
Gross profit from the group’s Help Me Choose business fell sharply from approximately $750,000 in March to below $300,000 in June, its lowest level since the beginning of the year.