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Moneysupermarket downgrades guidance again

A tough end to the year has created a gloomy outlook for the price comparison website. But does the weakness present a buying opportunity?
February 22, 2018

Moneysupermarket.com (MONY) saved its customers £2bn in 2017, “more than ever before”, according to chief executive Mark Lewis. But that was not enough to placate shareholders. Shares fell by around 16 per cent on results day, following news that revenues in 2018 will grow more slowly than the wider market, and that adjusted cash profits will be flat on 2017, well adrift of broker Numis’s previous 9 per cent growth forecasts. Management also intends to fork out between £6m and £9m on reorganisation costs during this year, while Numis has placed its forecasts under review as a result of the turbulence.

IC TIP: Buy at 273p

It comes as little surprise that the new chief executive has decided it’s time to refresh the business. Mr Lewis wants to focus on refining the mobile site and creating a more personalised experience – both improvements that could help Moneysupermarket stand out above its peers in a fiercely competitive marketplace.

But a deceleration of the strong revenue growth the group has experienced over the past few years is very disappointing. In the final quarter of 2017, insurance revenue growth – the single largest division – slowed to just 1 per cent while the home services business suffered a 25 per cent decline.

MONEYSUPERMARKET.COM (MONY) 
ORD PRICE:273pMARKET VALUE:£1.46bn
TOUCH:273p-274p12-MONTH HIGH / LOW:369p241p
DIVIDEND YIELD:3.8%PE RATIO:19
NET ASSET VALUE:31.7p*NET CASH:£35.1m
Year to 31 DecTurnover (£m)Pre-tax profit (£m)Earnings per share (p)Dividend per share (p)
201322631.54.85.74
201424843.16.47.28
201528266.09.78.00
201631691.313.59.85
201733096.114.410.44
% change+4+5+7+6
Ex-div:05 Apr   
Payment:15 May   
*Includes intangible assets of £145m, or 27p a share