Moneysupermarket keeps divi despite profit slump

Peter Duffy

Shares of Chester-based price comparison website Moneysupermarket Group rose about 7% on Thursday after it maintained its dividend despite revenue falling 11% to £344.9 million in the year to December 31, 2020, “due to exceptional COVID-19 related market conditions” and profit before tax tumbling 24% to £87.8 million.

Full year dividend was maintained at 11.71p “reflecting our confidence in our longer-term growth prospects and continued robust cash generation.”

Excluding travel channels — TravelSupermarket and travel insurance — revenue fell 4%.

On recent performance and outlook, the Chester firm said: “Our end markets continue to be impacted by COVID19 restrictions and the pace of lockdown measures being eased will be a major driver of our 2021 performance.

“The breadth of the consensus range for 2021 adjusted EBITDA (£96.4m to £128.8m) reflects this.

“Reaching the upper end of the consensus range will require strong and rapid recovery in both Money and travel related channels.

“If dynamics within Money were close to Q4 2020 levels and travel restrictions stay in place, adjusted EBITDA will likely be towards the lower end of the consensus range.

“Given the likely shape of the trading recovery, as well as the good 2020 Q1 performance, we expect revenue and profit performance to be firmly weighted to the second half.

“Early 2021 trading reflects lockdown measures and we currently expect Q1 performance for Insurance and Money to be similar to Q2 2020 (in terms of year-on-year % change). 

“Car, home and life insurance have been stronger than in April 2020, but we will shortly lap strong comparables for life and travel insurance. 

“Within Money, tight provider lending criteria have been compounded by a market-wide drop in demand similar to the initial drop in traffic seen during the Q2 2020 lockdown.

“In Home Services, customer savings in energy remain low and we are lapping a strong comparable when savings levels were high.

“Home Services revenue is therefore down significantly year on year although we note the recent price cap increase may improve performance as the quarter progresses.

“Our purpose of ‘Helping households save money’ has never been more relevant and, despite the current uncertainty, the Board remains confident in the group’s long-term growth prospects.”

Moneysupermarket CEO Peter Duffy said: “We have again helped millions of UK households save on their bills, while providing indispensable financial advice throughout the COVID-19 pandemic.

“The business is resilient, and our dividend reflects our confidence for the future.

“Our job now is to encourage consumers to engage with us more and save on more of their bills.

“We will use our data better so consumers find our sites easier to use and are reminded when there are savings available to them.”

 

About the Author

Mark McSherry
Dalriada Media LLC sites are edited by veteran news journalist Mark McSherry, a former staff editor and reporter with Reuters, Bloomberg and major newspapers including the South China Morning Post, London's Sunday Times and The Scotsman. McSherry's journalism has also appeared in The Washington Post, The Guardian, The Independent, The New York Times, London's Evening Standard and Forbes. McSherry is also a professor of journalism and communication arts in universities and colleges in New York City. Scottish-born McSherry has an MBA from the University of Edinburgh and a Certificate in Global Affairs from New York University.