Just weeks after serving up a very strong set of 2018 numbers price comparison site Moneysupermarket (MONY) is at it again. First quarter results are significantly ahead of expectations sparking renewed share buying by investors.
Up more than 9% at 380.2p in early trade, this would represent the stock's highest ever close, if it stays there. Before 2019 the share price's peak was 367p in 2015, the company having listed on the stock market 12 years ago at 170p.
Today Moneysupermarket reports a 12% increase in underlying revenue, boosted by the ‘exceptional’ performance of the Home Services sector.
Incorporating the acquired Decision Technologies business revenue rose 19% to £104.9m for the quarter ending 31 March 2019. Home Services revenue grew 70% to £19.6m, Money 9% to £25.3m and Insurance 3% to £48.3m.
The company says motor insurance benefited from improved conversion while the combination of attractive offers and the announcement of the price-cap increase meant energy-switching was exceptionally strong in the quarter. This trend is expected to moderate in the remainder of the year.
READ MORE ON MONEYSUPERMARKET HERE
WHAT THE EXPERTS SAY
Liberum notes trading ‘was much stronger than expected’ with the underlying revenue growth of 12% coming in well ahead of its 7% forecast.
It adds: ‘We would expect consensus revenues to tick up but the company has said it is happy with current market consensus, suggesting adjusted profit numbers will stay the same.’
Shore Capital analyst Roddy Davidson says: ‘We expect a positive reaction this morning and will continue to look for signs that investment and organic growth initiatives are creating upgrade potential.’
Russ Mould, AJ Bell investment director, says: ‘A new strategy built around a tailored service which would push products to consumers based on their needs and profile is seen as a potential game-changer for the business.
‘It could create more of a subscriber-based model, with a stronger connection with users which could help address the significant marketing costs and competition associated with the price comparison market.
‘Today’s statement shows how competitive that market still is. This is principally reflected in the life insurance market where rivals have been allocating more to customer incentives.’