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Network Data

  • BY: Andrew Hore |
  • POSTED: 01/04/2008 |

Network Data slumped into loss because of delays in launching Home Information Packs. 

The mortgage broker network had geared up its cost base for a full launch of HIPs last summer but they weren’t compulsory for all homes until December. The poor housing market exacerbated the problem. Costs needed to be cut but Network Data’s HIPSTAR business is still in a strong position to help boost group revenues.

Network Data lost £1.1m on revenues of £32.4m in 2007. HIPSTAR lost £3.6m during the year because it only generated revenues of £742,000. Net debt is £3.5m.

The core mortgage network business is expected to report sharply lower profits this year. That shortfall could be more than made up for by a turn around to a small positive contribution from HIPSTAR. Edison Investment Research believes that Network Data could make profits of £1.7m this year.

The slump in the share price from a high of 80.5p to 20p has been exacerbated by the lack of liquidity of the shares. That values the shares on less than five times prospective earnings for 2008.

The uncertainty of the housing market is likely to make people cautious about these forecasts especially as the original forecasts for 2007 proved far too optimistic.

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