Shares in comparison site Moneysupermarket (MONY) fell 5.7% to 251.8p on continuing evidence that despite being an online business it is suffering a material impact from the pandemic.

Revenue for the first nine months of this year were £268.4 million, down 11% on the same period in 2019.

The company cited a fall in the energy price cap and rise in wholesale price of energy for a weak performance in its Home Services arm, which meant that ‘savings available to customers fell sharply’ and switching ‘reduced substantially’.

While motor insurance grew, the company said it was not seeing growth in other core insurance channels.

‘We have seen little improvement in lending criteria or banking product availability, and the travel market remains severely disrupted,’ it stated.

EARNINGS DOWNGRADED

Numis analyst Gareth Davies cut his 2020 earnings per share forecast from 14.5p to 13p and his 2021 number from 15p to 17p commenting that ‘Home Services, and the outlook into Q4 is an unexpected negative in the statement’.

Shore Capital analyst Roddy Davidson was more positive on the longer term prospects for the business. ‘Notwithstanding this cautious short-term picture, we believe Moneysupermarket’s proven ability to deliver substantial savings across a range of categories will stand it in good stead as the pandemic’s economic consequences play out,’ he said.

‘Substantial sunk investment in technology, improving customer experience/site functionality and in developing new products and its financial strength/cash generative characteristics also bode well. We also look forward to hearing more from Peter Duffy on his plans to bring fresh thinking and impetus to the business.

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Issue Date: 22 Oct 2020