Shares in on-line comparison site MoneySupermarket Group (MONY), moved 3.6% higher to 179p following the announcement of an in-line trading update, accompanied by an encouraging outlook commentary suggesting that full year earnings will increase to 2020 levels.
First quarter revenue has grown by 8% on a year on year basis. On a divisional basis strong performances were recorded in both the money and travel divisions. Money recorded a 37% increase led by a recovery in borrowing.
Travel recorded the best quarter in two years with a 796% increase. Insurance was flat, which was weaker than the market had anticipated, due to higher customer retention rates of insurers, which has led to lower switching.
Home Services was negatively impacted (-65%) by the energy crisis, and the lack of energy switching options.
CONSTRAINED CONSUMER
Moving forward MoneySupermarket is a likely beneficiary of the deteriorating economic environment. Rampant inflation has increased the cost of fuel and food, which has squeezed household finances. In theory, that should drive consumers towards money saving switching options, such as those offered by MoneySupermarket.
‘With cost-of-living increases adding pressure to consumer budgets, our distinctive brands remain well positioned to help households save money in a broad range of areas,’ said chief executive Peter Duffy.
The Travel and Money divisions have been the two key drivers of earnings growth, the former thanks to rebounding demand for travel insurance products as restrictions were lifted.
‘As we progress through the year, Travel should recover further and Money continue to be robust,’ said Peel Hunt media analyst Jessica Pok. ‘The risk is with the Insurance vertical.’
