8th Sep 2022 14:51
(Alliance News) - Efforts to keep a lid on UK energy bills could hurt price comparison site operator Moneysupermarket.com Group PLC, analysts at Liberum said on Thursday.
Energy bills for the average UK household will be frozen at no more than GBP2,500 per year, and businesses will be spared crippling increases, as Prime Minister Liz Truss took action to shield Britons from the global gas crisis.
The prime minister's two-year plan paid for by tens of billions of pounds of borrowing will save the typical household around GBP1,000 from October and protect bill payers from further expected rises over the coming months.
For businesses and other non-domestic users such as schools and hospitals, which have not been covered by the existing price cap, a six-month scheme will offer equivalent support.
Liberum said it is probable the cap will be below wholesale prices during the two-year prior.
"As a reminder, switching volumes are dependent on the negative delta between the cheapest available fix deal and the price cap. Therefore, during this two-year period the cap is likely to be below the prevailing wholesale energy price. This is likely to mean that energy switching volumes are likely to be zero for this period," Liberum said.
There is a chance Moneysupermarket will see no energy switching revenue during the period.
The company in July, while reporting results for the first half of 2022, said it expects the energy switching market "to remain closed this year".
Revenue for the half grew 19% year-on-year, to GBP193.2 million, though growth was capped by the closure of energy switching market.
Second quarter revenue in its Home Services arm alone fell 50% to GBP9.7 million, due to the absence of energy switching, Moneysupermarket explained in July.
Liberum cut its price target for the stock to 200 pence from 220p. It maintained its 'hold' recommendation.
Shares in the company were 1.9% lower at 189.40 pence each in London on Thursday afternoon.
By Eric Cunha; [email protected]
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