-15% earnings beat in the first half drive 12% share gain
-Full year earnings upgraded to upper-end of forecasts
-Travel continues to recover reaching 60% of pre-pandemic
Price comparison website Moneysupermarket (MONY) said first-half performance was ahead of expectations, driven by stronger growth in travel and ‘exceptional’ trading in its Money channel which lets people compare financial products in areas such as credit cards.
Consequently, the board said it is confident of delivering full-year adjusted EBITDA (earnings before interest, tax, depreciation and amortisation) at the upper end of market expectations.
Analysts expect full-year revenues to increase around 17% to £370 million while net profit is forecast to grow 30% to £69 million. Investors cheered the strong performance and confident outlook, pushing the shares up 12% to 215.6p.
15% EARNINGS BEAT
Revenues grew 19% year-on-year to £193.2 million in the six months through June while EBITDA was 10% higher at £56.6 million and adjusted earnings per share grew 14% to 7p.
The profit numbers were around 15% ahead of analysts’ forecasts justifying the gains in the share price, while the positive outlook should invite further upgrades.
The availability of ‘attractive’ savings products drove a very strong 50% increase in revenues for the Money vertical. Conversely, the Home Services vertical saw a 59% collapse due the energy markets being effectively closed.
The company said it anticipated the energy switching market to remain effectively closed for the rest of the year. The energy cap is expected to be increased again in October, heaping more pressure on household budgets.
The Insurance vertical which generates almost half of revenues delivered 7% growth to £85.8 million as strength in travel insurance was offset by the introduction of new pricing regulations in motor and home insurance which reduced switching volumes.
EXPERT VIEWS
Investment director at AJ Bell, Russ Mould commented: ‘Surging energy prices have made it almost impossible for Moneysupermarket to help consumers find better energy deals, because there aren’t any.
“Nonetheless, its half-year results have still beaten expectations thanks to strong demand for comparing products in the money and travel channels.
‘People under financial pressure might be able to save a few quid by switching financial products, and the pent-up demand for a week in the sun will have seen holidaymakers shop around for the best travel insurance deals.’
Disclaimer: AJ Bell referenced in this article owns Shares magazine. The editor of this article (Daniel Coatsworth) owns shares in AJ Bell.
