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Goco builds Autosave customers

The group is attempting to take advantage of consumer inertia
Goco builds Autosave customers

Goco Group (GOCO) is pivoting from operating as a core price comparison business towards a new, data-driven approach. Chairman Sir Peter Wood said it had “introduced ideas that go against industry norms because they aim to solve greater societal challenges”. What this looks like in practice is focusing on helping customers who are missing out on savings on things like energy bills through sheer inertia via its two ‘autosave’ brands, Look After My Bills and weflip. These products added 125,000 customers in 2019, 37 per cent ahead of market expectations.

IC TIP: Sell at 76p

Autosave's main objective is customer acquisition, although investment in bringing people on board led to a £17.2m reduction in group operating profit to £20.3m last year. Falling car insurance premiums also led to lower switching activity, making the core price comparison market tougher and leading sales to end the period more or less flat on the prior year at £152.4m. Management expects the group’s performance in the coming year to be skewed towards the second half.

House broker Peel Hunt forecasts adjusted pre-tax profits of £29.4m and EPS of 5.5p in 2020, rising to £38.4m and 7.2p the following year.

GOCO (GOCO)   
ORD PRICE:76pMARKET VALUE:£ 317m
TOUCH:75.8-76.5p12-MONTH HIGH:108pLOW: 61p
DIVIDEND YIELD:1.2%PE RATIO:25
NET ASSET VALUE:*NET DEBT:£76m**
Year to 31 DecTurnover (£m)Pre-tax profit (£m)Earnings per share (p)Dividend per share (p)
2015†11923.34.6na
201614221.63.8nil
201714930.75.81.4
201815333.86.51.6
201915215.83.00.9
% change--53-54-44
Ex-div:07 May   
Payment:27 May   
*Negative shareholder equity **Includes lease liabilities of £4.4m †Pre-IPO figures