As the credit crunch bites, Moneysupermarket is finding it tough to convert customers searching for the likes of credit cards, mortgages and loans. The UK website still makes up the bulk of the company's sales, but the move by customers towards lower-margin savings products from loans as well as the impact of falling discretionary spend is hurting. The loss of business from the closure by Barclays of its First Plus home loans division also hit hard.
A £70m goodwill charge was the main reason for the swing to losses last year, but even after stripping this out, underlying EPS fell from 7.5p to 6.9p and this trend is set to continue, with Numis Securities expecting EPS to fall to 5.7p in 2009.
In an effort to win new business, particularly in the insurance sector, Moneysupermarket hiked its television advertising spend last year with total distribution costs up 10 per cent to £21.6m. The move helped the group retain its leading market position as total visitors to its site jumped a third to 120m while transactions increased 23 per cent to 71.4m. However, business in the travel arm tailed off in the second half as customers cut spending, which impacted sales from car hire and package holidays.
Current trading is 'well below' last year with sales in recent weeks down a hefty 30 per cent. To mitigate against this Moneysupermarket is reviewing its cost base, having already cut 14 per cent of its workforce last year.
| ORD PRICE: | 46p | MARKET VALUE: | £ 232m | |
| TOUCH: | 46-46.5p | 12-MONTH HIGH: | 138p | LOW: 43p |
| DIVIDEND YIELD: | 7.6% | PE RATIO: | NA | |
| NET ASSET VALUE: | 51p** | NET CASH: | £73.5m | |
| Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2007* | 163 | 16.7 | ** | ** |
| 2008 | 179 | -51.0 | -11.8 | 3.5 |
| % change | +10 | - | - | - |
Ex-div:25 Mar Payment:01 May *proforma **includes intangible assets of £224m, or 44p a share ** prior to listing | ||||
