Price comparison site sees half year sales and profits decline

Moneysupermarket, the price comparison website, experienced a fall in revenues and pre-tax profits in the half year to June 30.

The business, based in Ewloe, near Chester, said revenues fell eight per cent to 183.2m, while pre-tax profits of £51.4m compared with £60.4m the previous year.

The board is recommending an interim dividend of 3.1p per share, the same as last year.

It said its revenues grew by two per cent in the first quarer, but exceptional market conditions caused by COVID-19 led to revenue falling eight per cent in the half with a mixed outcome across its vertical.

Insurance was affected in April and May with performance improving during June.

Money was heavily impacted by a significant tightening in lending criteria throughout the second quarter.

However, there was strong growth in Home Services in the half year.

The group reported robust cash conversion – £41.7m operating cash in the half, net cash £7.5m at June 30.

Chief executive, Mark Lewis, said: “I’m pleased the group has been able to help our users save over £1bn already this year when so many households are facing unprecedented financial strain.

“COVID-19 and the lockdown measures have significantly impacted our core markets, but our brands MoneySavingExpert and MoneySuperMarket have risen to the challenge providing useful advice and savings tips to millions.

“Our business model has proved resilient, generating good cashflow throughout the crisis and giving us confidence for the future.”

The group said motor and home insurance have recovered to year-on-year growth, which may moderate as pent-up demand runs its course.

Life insurance remains below 2019 levels and the group has not seen any significant recovery in travel insurance (or TravelSupermarket) despite some relaxation of travel restrictions.

Money performance remains highly suppressed with tight lending criteria and virtually no promotional banking products.

It is not expecting provider credit appetite to improve until there is greater visibility of underlying macroeconomic trends.

Home Services continues to trade well, though the anticipated price cap reduction in the Autumn may dampen the level of customer savings.

Moneysupermarket said it remains committed to plans for an additional £5m marketing investment, which will be second-half weighted.

Operating expenditure will continue to be well controlled with admin costs in the second half slightly ahead of the first.

The group said: “While the uncertainty now inherent in some of our markets makes it difficult to provide financial guidance, we believe we are likely to face greater earnings pressure in H2 than in H1, given our good Q1 performance and the phasing of costs through the year.”