Moneysupermarket expects profit to meet market forecasts after solid first half

Analysts at Peel Hunt were hoping for an upgrade to the full-year guidance so downgraded its recommendation on the shares to 'hold' from 'add'

Moneysupermarket is in the second year of its so-called 'Reinvent' strategy

Price comparison website Moneysupermarket.com Group PLC (LON:MONY) said it is on track to meet its market forecasts for the year after revenue jumped 17% in the first half.

In the six months to the end of June, revenue rose to £199.4mln from £173.7mln the same period a year ago and adjusted earnings (EBITDA) rose 17% to £72.9mln in the six months.

The insurance division delivered a 3% increase in revenue to £96.1mln, supported by motor and home insurance demand.

READ: Moneysupermarket.com reports 20% revenue jump as energy price cap causes rush of switching

Revenue from the money arm was up 5% to £46.5mln on strong growth in credit while revenue from the home services business gained 52% to £34.2mln as the increase in the energy price cap in January caused a rush of customers to switch suppliers.

Decision Technologies, the home communications and mobile phone comparison business acquired last year, contributed £11.4mln to other revenue.

Reinvent strategy bears fruit 

The company said it saw benefits from its strategy to reinvent itself to focus on more personalisation, mobile and new products such as mortgages.

Moneysupermarket is in the second year of its so-called ‘Reinvent’ strategy and the company expects the restructuring to cost up to £2mln this year.  

The group expects to meet analysts’ estimates for 2019 adjusted EBITDA of £136.6mln to £145.4mln.

The interim dividend was lifted by 5% to 3.10p.

"We grew the business strongly in the first half, already helping households save over £1bn this year, particularly after the energy price cap came in and then went up,” said chief executive Mark Lewis.

 “Millions of people faced rising energy bills and we helped many of them to find a better deal, saving them hundreds of pounds in just a few minutes on our sites.”

Peel Hunt downgrades in absence of guidance upgrade 

Peel Hunt cut its rating on the stock to 'hold' from 'add' as it was hoping for an update to the full-year guidance. It left its estimates for the year unchanged. 

"The shares have performed very strongly year to date and now trade at a price to earnings ratio of 22.1x 2019 financial year, well above the recent averages."

Shaers fell 1.7% o 395p in morning trading

Quick facts: Moneysupermarket.com

Price: 321.9 GBX

Market: LSE
Market Cap: £1.73 billion

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