18th Oct 2022 18:12
(Alliance News) - Moneysupermarket.com Group PLC shares jumped higher on Tuesday, after the price comparison website confirmed its annual earnings will be at the top of guidance following a strong third quarter.
It added 7.6% to 213.60 pence each, but has dropped 4.9% in 2022.
For the three months that ended September 30, Chester, England-based Moneysupermarket reported total revenue of GBP101.9 million, up 33% from a year prior. It attributed this result to strong growth in its money and travel channels, revenue in the former of which rose 42% to GBP28.1 million.
"The cost-of-living crisis is putting pressure on households to ensure their finances are ship-shape and that means shopping around for better deals. That's music to the ears of Moneysupermarket, which is clearly benefiting from the difficult backdrop as individuals seek better rates on credit cards and other financial products," Russ Mould, investment director at AJ Bell, said.
Insurance revenue rose by 10% to GBP45.3 million. In that category, travel insurance growth moderated but was still strong, Moneysupermarket said, with revenue around 15% higher than the 2019 level.
The company said revenue growth in those segments was partially offset by declines in car and home, "although market switching volumes did improve to single-digit declines compared to the double-digit declines seen in the first half", it said.
Mould added: "It's not all perfect though, as the energy switching market has effectively shut up shop on a temporary basis, and weaker consumer sentiment has trickled through to weaker demand for travel insurance.
"Newspapers and mainstream news websites are full of stories giving personal finance tips and a large majority will recommend shopping around for better deals. Therefore, one might expect sales momentum to remain strong for Moneysupermarket well into 2023."
Broadband and mobile had seen good growth in-home services, Moneysupermarket said, though revenue fell by 26% to GBP10.3 million.
Conditions in the wholesale energy market and the introduction of UK government support measures, including the Energy Price Guarantee, meaning it is unlikely that energy switching will return in 2023, Moneysupermarket said.
Shore Capital moved its forecasts higher following the better-than-expected performance.
We have revised our forecasts to reflect the better-than-expected performance flagged in MONY’s Q3 update.
"The result is an 8% FY23F adjusted earnings per share upgrade and, notwithstanding minor adjustment to reflect caution on energy switching, the prospect of three-year aggregate growth of 60%, a useful DPS progression - underpinning an already compelling yield - and strong cash generation. We have raised our fair value estimate to 267p per share - about 27% upside potential - and reiterate our 'buy' recommendation," Shore analyst Roddy Davidson said.
Looking forward, Moneysupermarket Chief Executive Peter Duffy: "There are early signs of improving trends in the insurance market, and in money more consumers are finding attractive products to switch to. Our strong brands are well-equipped to support consumers at this critical time."
The company expects annual earnings before interest, tax, depreciation and amortisation to be at the upper end of market expectations.
It notes market expectations for adjusted Ebitda for 2022 is a range of GBP108.5 million to GBP115.5 million, with an average of GBP110.5 million.
By Paul McGowan; [email protected]
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