Price comparison site Moneysupermarket (MONY) gains 7.4% to 332.3p on a robust set of first half results which included the unveiling of a new joint venture aimed at delivering comparison services on mortgages.
The company operates in a competitive market, so it could enjoy significant benefits from finding a new growth area and enjoying first mover advantage.
The mortgage market is still largely conducted through the phone and on paper in the UK and as such is ‘ripe for disruption’ according to Moneysupermarket.
The 50-50 joint venture entitled Podium, sees the company team up with the founders of comparison tool developer HD Decisions, Mark Hawkins and Matt Denham.
Alongside this potentially exciting new plan, the company announces first up revenue up 5% to £173.7m and post-tax profit also up 5% to £42.5m. This leaves the company on course to hit full year forecasts.
WHAT ANALYSTS THINK OF THE MORTGAGE MOVE
Liberum analyst Ian Whittaker is enthused by the new strategy. ‘The announcement of a new mortgage fintech JV called Podium that will focus on developing a mortgage comparison tool is important.
‘It represents a major step in the development of the strategy of targeting mortgage provision and, if Moneysupermarket can start to deliver mortgage price comparison services on a meaningful level with subsequent conversion, can lead to meaningful potential future revenue growth.’
AJ Bell investment director Russ Mould says: ‘Podium is one of several initiatives the company is working on under its Reinvent strategy, which includes a new app and the provision of price comparison services on third party sites.
‘In the interim, the business remains solid with revenue up 5% and operating profit up 7%. A more modest 4% increase in the dividend may reflect the investments the Moneysupermarket is making in the business.’
