Price comparison site Moneysupermarket (MONY) is in full blown recovery mode on an encouraging set of full year results, rising 10.8% to 343.3p. The shares had come under pressure of late on concerns over stalling growth.

Revenue was up 9% in 2019 as the company continues to make progress on its ‘Reinvent strategy’. Launched in February 2018, the plan is to create a more personalised service which would push products to consumers based on their need and create a more subscriber-based model.

The company says more than 600,000 are using its bill management and credit monitoring services – with resulting benefits in engagement and value driven from these users. The Money division is the main detractor from performance, with revenue down 14%.

Adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) were in line with expectations at £141.5m and the company had a strong operating cash generation of £113.7m. The full year dividend was increased by 6% in 2019.

Management expect to hit guidance in 2020 after improved trading in the first six weeks of the year, with Money returning to growth. Moneysupermarket will soon have to navigate a change of leadership with current CEO Mark Lewis announcing on the eve of these numbers that he will stand down once a replacement has been found.

Numis analyst Gareth Davies reckons the market's focus will be on receiving further background on the departure of Lewis and detail on how the return to growth in the Money division in 2020 can be achieved.

UBS comments: ‘We would expect investors to react positively to an inline set of results, given positive outlook (although 2H weighted) and data points supportive (of) the long term narrative, in the context of a weak share price.’


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Issue Date: 20 Feb 2020