When it comes to investing in internet companies, investors are usually asked to pay a high price for the promise of high growth. However, things are somewhat different in the online price-comparison sector. Indeed, market-leader Moneysupermarket.com is showing few signs of breakneck growth but the business is ticking over nicely and the shares boast a tempting yield.
Trading conditions have certainly improved since the financial-product-comparison website’s credit-crunch nadir, but visitor numbers, a key driver of growth, look fairly lacklustre in key divisions - rising 4 per cent in insurance (57 per cent of revenue) and dropping 9 per cent in money (29 per cent of revenue). Overall, first-half revenues were about 10 per cent ahead for the money, insurance and home-services divisions, while the travel division, which accounts for 10 per cent of revenue, experienced a 20 per cent revenue decline.
Divisional performance was boosted by a site redesign and a new advertising campaign featuring a popular comedian, Omid Djalili, although the costs associated with this meant underlying cash profits were down 3 per cent to £18.1m while underlying EPS nudged down from 2.4p to 2.3p.
Broker Investec Securities forecasts full-year underlying pre-tax profits of £34.7m and adjusted EPS of 4.8p (2009: £28.4m/4p).
| Moneysupermarket.com (MONY) | ||||
|---|---|---|---|---|
| ORD PRICE: | 69.5p | MARKET VALUE: | £351m | |
| TOUCH: | 69-70p | 12-MONTH HIGH: | 84p | LOW: 60p |
| DIVIDEND YIELD: | 5.1% | PE RATIO: | 115 | |
| NET ASSET VALUE*: | 37p | NET CASH: | £28m | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2009 | 68.5 | 1.93 | 0.2 | 1.3 |
| 2010 | 71.6 | 2.90 | 0.4 | 1.3 |
| % change | +4 | +50 | +100 | - |
Ex-div:18 Aug Payment:17 Sep *Includes intangibles of £186m, or 37p per share | ||||
