Yellow Brick Road revealed in a disclosure to the ASX that Macquarie Group had sold more than 4 million shares on 22 May, dropping its holding from 6.6 per cent to 5.15 per cent. The banking group now owns a little over 14.5 million shares in YBR.
Macquarie began offloading its stake in YBR in April, prior to which it owned more than 51 million shares. On 24 April, the banking group decreased its stake from 18.4 per cent to 7.8 per cent; then on 15 May, its holding dropped further to 6.6 per cent.
The equity reduction comes despite YBR turning around years of significant losses into profits. In FY17, it posted a net profit after tax of $1 million, up from a loss of $9.5 million in FY16.
Yellow Brick Road’s underlying EBITDA increased from negative $3.9 million in FY16 to $5.2 million in FY17, and the value of its underlying loan book grew from $37.8 billion in FY16 to $44.1 billion in the last financial year.
As of 30 June 2017, the firm’s underlying funds under management totalled nearly $1.5 billion, more than double the $703 million recorded in the previous corresponding period.
Yellow Brick Road executive chairman Mark Bouris told InvestorDaily sister title Mortgage Business that the firm’s relationship with Macquarie “remains the same and is still as strong as ever”, adding that the reduction in ownership is a result of corporate raider Sir Ron Brierley’s Mercantile Investment Company increasing its stake from 9.1 per cent to 19.9 per cent.
“We aren’t the only company Macquarie Group has reduced its shareholder stake in, and we won’t be the last,” Mr Bouris said.
While there have been no disclosures around a potential takeover by Mercantile, Yellow Brick Road shares are trading at a record low of around 11 cents, taking its market capitalisation to around $31 million.
