Most UK television owners will be familiar with Gio Compario, the annoying opera singer who fronts adverts for GoCompare.com (GOCO). But it appears that Gio is not just a bit of a loud-mouth: "He's a more effective communicator than meerkats or the man with the fat bottom", said GoCompare's chief executive Mark Crummack, referring to the adverts of competitors Comparethemarket.com and Moneysupermarket.com (MONY). The polls seem to agree. A Hall and Partners report found GoCompare generated the most responses to the question: which price comparison website can you think of?
But Gio doesn't come cheap. In 2016, GoCompare spent £88m on marketing - 62 per cent of total revenue. Even so, after stripping out £8m of one-off costs associated with the group's demerger from esure (ESUR) and subsequent IPO, adjusted operating profits rose 30 per cent to £30m.
The majority of revenues come from insurance products which saw sales rise 17 per cent in 2016. But the group is now marketing a wider range of products (Gio now sells loans to a lady on a gondola in Venice), and revenue from non-insurance products rose more than two-thirds to £8.4m.
Broker Peel Hunt expects pre-tax profits and EPS of £30m and 5.6p, respectively, for the year to December 2017, largely flat on last year (£29.6m and 5.7p in FY2016).
GOCOMPARE.COM (GOCO) | ||||
|---|---|---|---|---|
| ORD PRICE: | 97p | MARKET VALUE: | £405m | |
| TOUCH: | 96-97p | 12-MONTHHIGH: | 100p | LOW: 57p |
| DIVIDEND YIELD: | nil | PE RATIO: | 25 | |
| NET ASSET VALUE: | * | NET DEBT: | £54.7m | |
| Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2013** | 110 | 25.5 | na | na |
| 2014** | 113 | 25.8 | na | na |
| 2015** | 119 | 23.3 | 4.6 | na |
| 2016 | 142 | 21.6 | 3.8 | nil |
| % change | +20 | -7 | -17 | - |
Ex-div: na Payment: na *Negative shareholder equity **Pre-IPO figures | ||||
