Moneysupermarket.com (MONY) pledged a £40m return of capital to shareholders in addition to a decent dividend hike, after a year which saw growth across the business. The company’s insurance and money segments experienced revenue growth of 4 per cent and 3 per cent respectively, while revenues from home services grew 15 per cent. This fed through to an 11 per cent rise in net earnings to £86.6m, but there were further improvements on the operating front, evidenced by record switching levels by the comparison site's customers. However, margins have been sacrificed in order to secure market share – presumably a temporary effect.
The mechanism for the payout is undecided, and Moneysupermarket is consulting with major shareholders over this process. Chief executive Mark Lewis gave the company’s “very cash-generative business model” as justification for the payout. The company was indeed adept at generating cash last year, with an operating cash conversion ratio of 99 per cent, supporting the shareholder return.
Peel Hunt forecasts 2019 full-year pre-tax profits and earnings per share of £124m and 18.3p respectively, compared to £114m and 17.3p in FY2018.
| MONEYSUPERMARKET.COM (MONY) | ||||
| ORD PRICE: | 326p | MARKET VALUE: | £1.75bn | |
| TOUCH: | 325-326p | 12-MONTH HIGH: | 348p | LOW: 241p |
| DIVIDEND YIELD: | 3.4% | PE RATIO: | 20 | |
| NET ASSET VALUE: | 37.4p* | NET CASH | £29.8m | |
| Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2014 | 248 | 43 | 6.4 | 7.28 |
| 2015 | 282 | 66 | 9.7 | 8.00 |
| 2016 | 316 | 91 | 13.5 | 9.85 |
| 2017 | 330 | 96 | 14.4 | 10.44 |
| 2018 | 356 | 107 | 16.2 | 11.05 |
| % change | +8 | +11 | +13 | +6 |
| Ex-div: | 4 Apr | |||
| Payment: | 16 May | |||
| *Includes intangible assets of £184m, or 34.3p a share | ||||
