Price-comparison website Moneysupermarket.com (MONY) battled stiff headwinds last year to report a 26 per cent rise in adjusted cash profits. Its acquisition of MoneySavingExpert in 2012 seems to be paying off, with cash profits from Martin Lewis's website growing four-fold.
The new addition improved profitability, helping to expand the company’s gross margin by 370 basis points to 77.8 per cent. But it wasn’t the only star performer: sales at the company’s home-services segment nearly doubled to £22m. That was driven by the company’s new Cheap Energy Club, which alerts members to significant savings from switching, as well as by energy-price hikes that prompted customers to change providers.
The company’s money business fared less well, as the UK government’s Funding for Lending Scheme reduced banks' reliance on consumer savings, depressing deposit rates and thus discouraging customers from switching bank accounts. Rising capital costs may also be a concern. The company plans to double its capital spending this year, partly to invest in its mobile platform.
As only a minority of the UK population uses its services, however, chief executive Peter Plumb expects plenty of further gains. “We have the ambition to keep growing; there’s no reason why our markets won’t have headroom for growth,” he says. Investec analysts expect adjusted pre-tax profit of £78m in the current year, giving EPS of 11.2p, rising to £85m and 12p in 2015.
| MONEYSUPERMARKET.COM (MONY) | ||||
|---|---|---|---|---|
| ORD PRICE: | 186p | MARKET VALUE: | £1bn | |
| TOUCH: | 185-186p | 12-MONTH HIGH: | 214p | LOW: 142p |
| DIVIDEND YIELD: | 3.9% | PE RATIO: | 29 | |
| NET ASSET VALUE: | 25p* | NET DEBT: | 8% | |
| Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2009 | 137 | 3.2 | 0.4 | 3.50† |
| 2010 | 149 | 11.0 | 1.5 | 3.83 |
| 2011 | 181 | 24.3 | 3.3 | 4.53† |
| 2012 | 205 | 31.5 | 4.8 | 5.74 |
| 2013 | 226 | 43.1 | 6.4 | 7.28† |
| % change | +10 | +37 | +33 | +27 |
Ex-div:19 Mar Payment:02 May *Includes intangible assets of £174m, or 32p a share †Excludes special dividends: 9.84p in 2009, 3.93p in 2011 and 12.92p in 2013 | ||||
