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Bouris delivers maiden profit, readies YBR for growth

Yellow Brick Road executive chairman Mark Bouris has explained how the group will drive productivity through its network after posting its first profit this week.

In a trading update on Monday, YBR announced a net profit after tax of $0.4 million, a $4.5 million improvement on the first half of FY17, when the group made a loss of $4.1 million.

“The wealth business gained strong momentum with revenue growth of 25 per cent, including a 29 per cent improvement in recurring revenues. Recurring revenue growth was derived from a 28 per cent increase in underlying Funds Under Management (FUM) and a 20 per cent increase in Premiums Under Management (PUM) since 30 June 2016,” the group said.

Meanwhile, the YBR network saw a 20 per cent increase in settlement growth over the period. The group’s loan book is now valued at $41 billion.

The first half of FY17 has been a period of transition for the company, with three new general managers responsible for Yellow Brick Road lending, Yellow Brick Road wealth management and Vow Financial appointed.


Speaking to Mortgage Business at the YBR annual conference in Hobart last week, executive chairman Mark Bouris explained his decision to become more involved in the business, and outlined the key tasks of his new leadership team.

“I was never a believer in micromanaging. I spent many years working in the GE environment where you don’t micromanage,” he explained.

“I tried to put that in practice in YBR. But I think in these seriously competitive environments you have to micromanage. That is something I’ve become aware of. Because you can have a plan, and we did – we had a plan in 2015 going into the 2016 financial year. But when you have volatility, in other words, the regulator coming in and changing the amount of money you can lend, when that volatility hits your plan you need to be able to move very quickly,” he said.

“What I learned is that in those environments micromanagement works best. I am assuming we still have those volatile times ahead of us for some time. An organisation like ours doesn’t have the balance sheet of the major banks. That means we can’t afford to make changes midstream and then ride it out. We have to actually act really quickly. That’s what I did in 2016 – I made changes and jumped on board myself.”

Mr Bouris went on to explain how former Aussie Home Loans state manager Andrew Rasby, who joined YBR late last year, has been tasked with driving productivity across the network.

“He comes out of an environment where an Aussie branch will do $4 or $5 million a month to our environment where we do $1.6 million on average, across the business. We get branches that do far more than $5 million a month, but it’s about averages; it’s about getting everyone productive,” he said.

In its trading update this week the group outlined how it will train and enable branches to improve lending productivity. In addition to improving lead conversion through new technology investments, Yellow Brick Road has changed its recruitment strategy as it prepares for growth.

“In the refreshed business direction, we have increased our focus on recruiting people with experience and business acumen to operate successful branches and leverage the brand, product and cross selling opportunities in a timely and productive manner,” the company said.

“Our training resources are now applied to upskilling and cross selling, not tied up teaching the basics of running a business.”

To further enhance the productivity and effectiveness of its franchise operation the group is also adopting stricter performance guidelines.

“We have reviewed the productivity of all branches during the last six months and replaced a number of underperformers,” it said.

YBR has undertaken a managed reduction in operating overheads over the half and says the business is now operating with a sustainable, scalable cost base.

[Related: Bouris delivers $40bn book following restructure]

Bouris delivers maiden profit, readies YBR for growth

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