It wasn't headline numbers from Moneysupermarket.com (MONY) that sent the group's shares down, but the fact it won't pay a special dividend this year. Instead, management will use surplus cash - the result of £106m-worth of operating cash flow - to buy back £40m-worth of shares.
There's still a lot to like in these results. In 2016 the group added new providers to its site and new customers to its personalised MyProfile service. It's also diversifying revenue streams, with the original insurance business now contributing less than half of MoneySupermarket.com sales. Home Services and MoneySavingExpert.com both reported double-digit revenue increases, while TravelSupermarket.com returned to growth in the final quarter.
The influence of the digital age, a weak consumer economy and anticipation of higher insurance premiums are all likely to send more customers to services provided by Moneysupermarket and its peers. That said, competition is fierce and an increased marketing spend in 2016 sent group gross margins down by 5 percentage points to 75 per cent.
The forthcoming departure of chief executive Peter Plumb is a minor cause for concern for Numis. Even so, the brokerage has raised forecasts for the year to December 2017: pre-tax profit is now expected at £117m, giving EPS of 17p (from £108m and 15.7p in FY2016).
MONEYSUPERMARKET.COM (MONY) | ||||
|---|---|---|---|---|
| ORD PRICE: | 320p | MARKET VALUE: | £1.75bn | |
| TOUCH: | 320-321p | 12-MONTH HIGH / LOW: | 354p | 226p |
| DIVIDEND YIELD: | 3.1% | PE RATIO: | 24 | |
| NET ASSET VALUE: | 34p* | NET CASH: | £44.6m | |
| Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2012 | 205 | 31.5 | 4.8 | 5.74 |
| 2013 | 226 | 43.1 | 6.4 | 7.28 |
| 2014 | 248 | 66.0 | 9.7 | 8.00 |
| 2015 | 282 | 79.8 | 11.6 | 9.15 |
| 2016 | 316 | 91.3 | 13.5 | 9.85 |
| % change | +12 | +14 | +16 | +8 |
Ex-div: 6 Apr Payment: 12 May *Includes intangible assets of £158m, or 29p a share | ||||
