17th Oct 2023 11:43
(Alliance News) - Moneysupermarket.com Group PLC's third-quarter outturn got a boost, as consumers, counting the cost of rising bills, turned to the price comparison site in pursuit of a better deal.
Moneysupermarket.com has "continued confidence" that its full-year results will meet market expectations, the Chester, England-based price comparison website said.
In the three months that ended September 30, Moneysupermarket.com revenue rose 14% to GBP115.6 million from a year earlier.
Insurance revenue alone rose 38% to GBP62.3 million, though Money revenue was down 10% to GBP25.2 million. Travel revenue rose 31% to GBP6.1 million. Home Services revenue ticked down 1% to GBP10.3 million, while Cashback revenue fell 3% to GBP13.9 million.
In the nine months that ended September 30, total revenue rose 12% to GBP329.4 million from a year earlier.
"Moneysupermarket continues to enjoy tailwinds from consumers looking to get a better deal on insurance products. With drivers getting punishing price hikes in their annual renewal letters, it's no wonder they are looking elsewhere for cheaper deals. A similar trend is seen among home insurance policies," said AJ Bell analyst Russ Mould.
"Moneysupermarket is one of the best-known comparison sites in the UK and it is raking it in from product sales commissions, hence the positive share price reaction to the latest trading update."
Shore Capital was similarly positive, rating Moneysupermarket.com at 'buy' with a target price of 245 pence per share.
Shares in Moneysupermarket.com were up 6.8% to 261.60 pence each in London on Tuesday late morning.
"This morning's release confirms that the positive headline performance achieved during [the first half] has continued," said Shore analyst Roddy Davidson, pointing to strong performance in Insurance and Travel.
Moneysupermarket.com noted continued strong growth in "all core Insurance channels", with high levels of switching in car and home insurance continuing.
This was supported by ongoing premium inflation and rebounding volumes post the UK Financial Conduct Authority general insurance pricing regulations introduced last year, Moneysupermarket.com said.
In Travel, Moneysupermarket.com said it continued to grow as the wider market recovers, with strength in package holidays.
Shore's Davidson continued: "We do not believe that these positive dynamics, which are rooted in the group's proven ability to deliver substantial savings across a range of categories and longstanding commitment to investing in technology (we see the integration of AI as an opportunity), and the quality and functionality of its offering, are adequately reflected in its current stock valuation."
Peel Hunt may similarly believe that Moneysupermarket is being underrated by the market. It lifted its recommendation for the stock to 'add' from 'hold'. It has a 290.0p price target.
Growth remains "solid", according to Peel Hunt analysts, as trends at Moneysupermarket.com "have persisted since [the first half] into [the third quarter]" and consumers "continue to look [to] save on bills".
Looking ahead, Moneysupermarket.com said its "resilient" business model and ongoing strategic progress gave the board "continued confidence" that its full-year results will meet market expectations.
Moneysupermarket.com said analyst consensus for its 2023 adjusted earnings before interest, tax, depreciation and amortisation is between GBP128.6 million and GBP132.2 million. That would be at least 11% higher than the GBP115.5 million achieved in 2022.
By Greg Rosenvinge, Alliance News reporter
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