Price check guru cashes in

Feb 27 2008 by Aled Blake, Western Mail

VOLATILITY in the credit markets will not slow growth plans for price comparison service Moneysupermarket.com, its chief executive said yesterday.

Ewloe-based Moneysupermarket.com yesterday unveiled its first annual results since floating on the London Stock Exchange.

The North Wales firm operates under flagship brands moneysupermarket.com and travelsupermarket.com, allowing consumers to compare prices on products including credit cards, broadband, mortgages, vehicle breakdown cover and package holidays.

It posted underlying earnings of £52.9m for 2007 exceeding forecasts of £51.3m.

The service, which covers the money, insurance and travel sectors, said revenues from its main money arm were up nearly 50% to £78m despite “well documented turbulence in credit markets”.

Simon Nixon, founder and chief executive of the company, said “all areas” of the internet business – which floated last June – performed well, with trading this year remaining strong.

He said, “We remain very confident in our diverse business model and the benefit it brings to consumers and providers.

“Given current trading and the ongoing investment programme, we are confident that we can have another successful year.”

Moneysupermarket.com group revenues grew by 55.9% in 2007 to £162.9m with internet revenues increasing by 63.7% to £152.2m.

Mr Nixon said, “I am delighted to be announcing a strong set of results for the group in a year when we have floated the business and grown revenues by more than 55%. Importantly, our investment in the Moneysupermarket.com brand has continued, as has investment in our consumer offering and marketing engine.

“I believe we have a very strong platform from which to grow the business in the future.

“We have made a strong start to the current financial year. The money vertical has enjoyed double-digit growth year to date, with broadly flat performance in loans and mortgages offset by very strong growth in credit cards and savings products. The other verticals, insurance, travel and home services, have maintained the momentum experienced in the second half of 2007.”

The company’s German business, which was launched last October, initially offered home and motor insurance partnering with a third party which provided the technology.

But Mr Nixon said more work was needed to make “satisfying” progress in its German operation.

He added, “In line with our business plan, we anticipate a step up in costs in the first half of 2008 associated with our continued investment in the business and development of our German subsidiary.”

In a sector which is becoming increasingly competitive, Mr Nixon said Moneysupermarket maintains a “strong market position”. The service is up against the likes of Gocompare.com and Confused.com, both based in South Wales – as well as a newly- launched comparison website by Tesco.

Mr Nixon said, “We have the most complete insurance comparison engine in the UK offering the consumer the widest choice of providers. We have a very strong brand with 73% of online consumers recognising the Moneysupermarket.com brand.

“The travel vertical increased its revenues by 100.9% to £15m. The Travelsupermarket.com brand is recognised in its own right and is the clear market leader in its field.

“We have made the product more comprehensive, adding additional channels which enable the business to cater for more of our consumers’ requirements.

“Inventory has been increased allowing the consumer to compare more providers. This improves the consumer experience and engenders trust in the group.

“Ultimately we believe these factors will make Travelsupermarket.com the preferred and most trusted travel website in the UK.”

There were other areas of the business which showed strong growth. Its home services revenues increased by 280.2% to £4.5m.

Mr Nixon said, “Home services continues to show rapid growth, albeit from a small base, but it also benefits the business by widening the group’s offering to the consumer. This gives the consumer even more reasons to return to our website.”

Moneysupermarket.com said its money arm was enjoying double-digit growth so far this year, with broadly flat performance in loans and mortgages offset by “very strong” growth in credit cards and savings products.

Broker UBS said it thought the statement was better than the market was expecting.

Analyst Alex Hugh said of this year’s money upswing, “Potentially, savings could be seeing a temporary boost from competitive rates offered in deposits but a good start to the year nonetheless.”

Moneysupermarket.com listed in July, with the first few hours of conditional trading seeing the group valued at £774m.