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Moneysupermarket in so-so third quarter performance

Published: 10:40 17 Oct 2017 BST

Moneysupermarket.com
"We are on track for another record year"

A strong performance in the Insurance vertical compensated for a decline in revenue from the Money and Home Services sectors at Moneysupermarket.com Group PLC (LON:MONY).

Third quarter revenue from the flagship Moneysupermarket.com price comparison web site rose 6% from a year earlier to £80.3mln, with insurance revenue up 11% to £47.2mln, Money revenue down 2% at £19.2mln and Home Services revenue down 1% at £13.8mln.

READ: Moneysupermarket hit by slowdown in energy supplier switching

Its MoneySavingExpert.com web business grew revenue 18% from a year earlier to £10.8mln but the TravelSupermarket.com business's revenue dipped 1% to £6.8mln.

Revenue for the whole group rose 6% year-on-year (yoy) to £90.2mln, taking revenue for the first nine months of the year to £255.5mln, up 5% on last year.

On track for full year

The board remains confident of meeting full-year expectations.

"We are on track for another record year because we are helping more people save more money across their household bills: from insurance and credit cards to holidays, broadband and energy,” said Mark Lewis, chief executive officer of Moneysupermarket.com.

"We're particularly encouraged by the continued growth of insurance, and momentum in energy switching, as families look to find better deals," he added.

Numis Securities described it as a “solid” update, but not impressive enough to persuade it to change its full-year estimates.

“Home Services at -1% in the quarter stood out, a material improvement on H1 and better than we had feared, illustrating the benefit of proactive measures taken by management are coming through already. Ultimately the statement confirms confidence for the year,” Numis said.

The broker said the performance of the Insurance vertical was good but the showing by Money was “a touch disappointing” and was affected by few attractive offers from providers in the reporting period.

“Management note good growth in core energy switching. It is good to see the benefits of proactive measures put in place at the time of the H1 results coming through this quickly,” Numis said, as it reiterated its 'add' recommendation and 390p price target.

Liberum Capital Markets was more equivocal.

“Performance across verticals was mixed and to deliver our FY’17 revenue estimate of £348.9mln Q4 revenues would need to increase 26% yoy, which we believe is a stretched target,” the broker said.

“The Home Services vertical has been the most disappointing vertical YTD [year-to-date]; we estimate 20% yoy growth for the FY, but revenues declined 1% yoy for Q3 and revenues are down 21% YTD. This decline is primarily driven by the smaller collective switches this period and the lack of pricing actions by the large energy companies,” Liberum opined.

“The shares look fairly valued at 19.2x FY’17 P/E, but they look expensive on a PEG of 1.8x relative to other online portals which trade on a sector average of 1.4x,” Liberum said as it stuck with its 'hold' rating and price target of 345p.

The shares currently trade at 314.5p, down 4p on the day.

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