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Failed TrigoldCrystal takeover cost Mortgage Brain more than £400,000

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Mortgage Brain lost £418,000 as a result of the Office of Fair Trading terminating its merger plans with TrigoldCrystal.

Mortgage Brain revealed last December that it was in discussions with the board of TrigoldCrystal and had agreed terms to buy the business for £6.8m.

However, the deal was scuppered by the OFT in March this year over concerns that it would lead to Mortgage Brain being too dominant.

Instead of allowing the deal, the OFT referred the decision to the Competition Commission to investigate further, which led to Mortgage Brain abandoning its plans.

The accounts of MBL Holdings, the parent of Mortgage Brain, show as a result, the company made a loss of £442,000, compared with a profit of £305,232 the previous year.

However  the accounts include two one-off costs, the first being the £418,000 from the failed merger and £419,520 relating to costs from share options offered to employees and directors.

Had it not been for these charges MBL Holdings would have made a profit of £395,5200.

The accounts also show the company increased its turnover by 4 per cent to £6.1m in the year ending March 31 2011.

Cash balances also increased by £76,000 to £2.9m

Mortgage Brain chief executive Mark Lofthouse says: “To achieve an increase in revenue of 4 per cent in a declining market is excellent.

“If the two one-off charges are not taken into account we would have made a reasonable profit.”

Lofthouse says he expects turnover to increase even more next year as a result of more brokers choosing to use its system.

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