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Moneysupermarket in throes of recovery

After two profit warnings from two sets of financial results, a positive set of interim numbers from the price comparison website came as a pleasant surprise
July 19, 2018

After 15 months as chief executive of Moneysupermarket.com (MONY), Mark Lewis finally has some good news to report. Revenues rose in all four of the group’s branches in the first six months of 2018, sending operating profits up 7 per cent to £52m – a stark contrast to this time last year when dismal results from the home services subsidiary forced Mr Lewis to cut annual guidance.

IC TIP: Buy at 331p

What makes the turn-around all the more impressive, is that the wider market remains subdued. The first fall in car insurance premiums for two years reduced the number of visitors to Moneysupermarket’s largest site, while a lack of promotional financial products tapered demand for credit card switching. Instead, the group’s growth has been driven by improvements in the website and mobile platform which sent revenue per active user up 4 per cent to £15.40.

The group is also in the process of widening its product portfolio and, alongside its results, announced a joint venture to build a new mortgage comparison tool. Broker Numis thinks this will help Moneysupermarket achieve pre-tax profit growth of 9 per cent in 2019, although strategic investment in the portfolio means pre-tax profits and EPS are expected to fall to £112m and 16.6p this year (from £115m and 16.8p in 2017).

MONEYSUPERMARKET.COM (MONY)  
ORD PRICE:331pMARKET VALUE:£ 1.77bn
TOUCH:330.5-331p12-MONTH HIGH / LOW:369p241p
DIVIDEND YIELD:3.2%PE RATIO:22
NET ASSET VALUE:31.9p*NET CASH:£24.4m
Half-year to 30 JunTurnover (£m)Pre-tax profit (£m)Earnings per share (p)Dividend per share (p)
201716549.57.42.84
201817451.77.92.95
% change+5+4+7+4
Ex-div:02 Aug   
Payment:14 Sep   
*Includes intangible assets of £145m, or 27p a share