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GoCo profits stumble

AutoSave revenues grew by more than two-thirds
GoCo profits stumble

GoCo’s (GOCO) adjusted operating profit fell by just over a tenth in the six months to June 2020, as strong trading in the early part of the year was constrained by the coronavirus outbreak. 

IC TIP: Buy at 97p

The price comparison division held revenues steady at £69.7m, although the number of consumers turning to price comparison websites (PCWs) dropped during the pandemic. The national lockdown prompted the group to remove travel insurance from its websites for most of the second quarter – although management was quick to note that it typically accounts for a small part of the overall top line, worth just £1.7m in the first half last year.

AutoSave led the group’s turnover growth, as the division saw sales climb by more than two-thirds compared with the first six months of 2019. The company noted that the pandemic had not had a significant impact on demand – not hard to believe given that the number of customers more than doubled in the past year, up to 483,000 as at the end of June.

Broker Peel Hunt forecasts adjusted pre-tax profits of £25.2m and EPS of 4.7p for the current year, rising to £37.4m and 7p in 2021. 

GOCO GROUP (GOCO)   
ORD PRICE:97pMARKET VALUE:£406.8m
TOUCH:96-97p12-MONTH HIGH:105pLOW: 42.8p
DIVIDEND YIELD:0.8%PE RATIO:23
NET ASSET VALUE:*NET DEBT:£71.5m**
Half-year to 30 JunTurnover (£m)Pre-tax profit (£m)Earnings per share (p)Dividend per share (p)
201976.07.61.500.40
202082.86.11.100.40
% change+9-20-27-
Ex-div:10 Sep   
Payment:02 Oct   
*Negative shareholder equity **Includes lease liabilities of £3.4m