Home services boosts Moneysupermarket's Q1 revenues
By Michele Maatouk
Date: Thursday 18 Apr 2019
(Sharecast News) - Moneysupermarket posted a 19% jump in first-quarter revenue on Thursday thanks to a solid performance from its home services business.
Total revenue for the quarter ending 31 March 2019 rose to £104.9m from £88.3m in the first quarter of 2018, with revenue in the home services segment up 70% to £19.6m. Revenue from the money business was up 9% at £25.3m and other revenue surged 80% to £11.7m.
Motor insurance benefitted from improved conversion, partially offset by subdued trading in life insurance as competitors spent more on their customer incentives. Meanwhile, the combination of attractive offers and the announcement of the price cap increase meant energy switching was exceptionally strong in the quarter.
The group said the performance of its home services division was "exceptional" in the first quarter and is expected to moderate through the year. It added that the outlook for the year remains unchanged and it's confident of meeting current market expectations.
The company also confirmed that it will return £40m to shareholders via a special dividend of 7.46p, which will be paid on 21 May.
Chief executive officer Mark Lewis said: "The reinvent strategy continues with a strong first quarter of trading, notably helping a record number of customers beat the rising energy price cap.
"MoneySuperMarket innovation continues, we have new branding and advertising to remind everyone how we can help them with their finances and 'get money calm' and new products like Credit Monitor are on the site."
Broker Liberum said: "We would expect consensus revenues to tick up but the company has said it is happy with current market consensus, suggesting adjusted profit numbers will stay the same." It reiterated its 'buy' rating and 520p target price.
Shore Capital analyst Roddy Davidson said: "We are encouraged by the positive momentum and special dividend payment flagged in this update and view Moneysupermarket.com as a well-managed business that has made tangible progress in strengthening its ability to capitalise on a positive outlook for medium-term growth across the online property sector.
"We would particularly cite strong brand awareness, the breadth of its inventory and the very substantial investment that it has made in technology/mobile functionality as important factors in this regard and are also drawn to the group's cash generative qualities."
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