Moneysupermarket investors get extra £25m despite sales slump

MONEYSUPERMARKET has committed an extra £25m for shareholders in a special dividend despite a sharp drop in annual sales.

The Chester-based price comparison website, which earns money from commission on the sale of mortgages, credits cards, insurance and holidays, said credit supply problems and less consumer spending had contributed to a 23% drop in annual sales.

But the debt free business has cash reserves of £54m and is keen to return some of this to shareholders, confident that the business can generate more cash.

It is adding 4.91p – or a total of £25m – to the final dividend of 2.2p. This comes after a previous special dividend of 4.93p last year and takes total dividends for the year to 13.34p, or £67.8m.

Chairman Gerald Corbett said: “Whilst 2009 was a tough year for the group, it is a measure of the resilience of the business that it was able to maintain its dividend at 2008 levels and declare two special dividends totalling £50m, giving a total dividend for the year of £68m.”

During the 12 months to December 31 the business saw sales tumble 23% to £136.9m. Pre-tax profits came in at £3.1m, compared to a £51m loss last time which reflected an impairment charge of £70m.

Moneysupermarket has four divisions: Insurance, money, travel and home services. Money saw sales fall 44% to £38.1m; Insurance was down 3% to £75.7m; travel dropped 15% to £16.3m; and home services fell 25% to £5.5m.

Nonetheless, the board said they believed the business had stabilised and stated, “the worst is behind us”.

Chief executive Peter Plumb said: “We had two priorities coming in to 2009, which we have successfully achieved. The first was to realign the business with the new economic reality. The second was to begin investing for growth, focusing on site and brand innovation and leveraging our deep insight into our customer base.
 
“We are confident that there is strong growth potential in all our markets and that we are well-placed to capitalise on this.”

He added: “We expect the economy to remain challenging, but I am confident that our clear strategy, as well as the investments we have made, position us well for the future.”