Initial strong demand for travel insurance at the start of the first quarter as well as demand for travel deals have both weakened “materially” since the travel ban, with recent weeks also seeing a slowdown in demand and product availability for loans and mortgages.
On the plus side, trading in both insurance and home services has remained “relatively resilient” and the MoneySavingExpert website has seen readership of its news section increase over 200% from the publication of coronavirus financial guides.
Bolstered by these diverse revenues, net cash of £30mln, a £100mln borrowing facility and belief in the long-term attractions of the business, the board has proposed paying a final dividend of 8.61p per share.
This “will not jeopardise our ability to continue to invest into the business and support ongoing operations, including our customers and colleagues”, the FTSE 250 company said in a quarterly statement released earlier than expected.
It will keep dividend policy for the rest of the year “under review”.
Moneysupermarket shares were up 2% to 290p by late morning on Thursday, still down 14% in the year to date.
Analysts at UBS noted that Travel was around 13% of group revenues in the second quarter last year and 10% for the whole year.
“While MONY's limited exposure to travel is well known, the market may be underestimating the supply headwinds faced in some of the other segments - in the context of a well-diversified and broadly resilient business in the current context,” the Swiss bank said.
The UBS view is that the company has “diversified and mostly resilient revenue streams in the current context”, variable costs and a “robust” balance sheet. Its share price target was kept at 415p.
Broker Peel Hunt, which maintained its 375p price target and 'add' rating on the shares, said: “Importantly, the robustness of the balance sheet (including banking facility) has supported the decision to confirm the final dividend.”
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