Moneysupermarket.com sees revenues grow

Jun 26 2008

Price comparison website moneysupermarket.com today said half-year revenues were up by a quarter despite “extremely challenging” money market conditions.

Business from loans and mortgages continued to worsen throughout the second quarter, the group said in an update for the six months to June 30, but this was outweighed by “strong” growth in credit cards and savings.

The group said that as a result, its money arm revenues - which comprise more than half of group turnover - would deliver “high single digit” growth compared to the same period last year.

Banks and building societies have tightened up their lending criteria and slimmed down their mortgage ranges since the onset of the credit crunch, helping to drive down the levels of mortgage approvals to historic lows.

Moneysupermarket chief executive Simon Nixon said: “The problems in the UK loan and mortgage markets are well documented and have naturally impacted our activities in that area.”

Revenues in its insurance and travel sectors were running 50% and 45% respectively ahead of this time last year.

Moneysupermarket said the firm’s interim underlying profit margins are expected to be in the region of 30%, it added, with the underlying UK margins in excess of 32%, and “broadly consistent” with the second half last year.

The North Wales firm, headquartered in Ewloe, Flintshire, operates under flagship brands moneysupermarket.com and travelsupermarket.com, allowing consumers to compare prices on products including credit cards, broadband, mortgages, vehicle breakdown cover and package holidays.

Total visitors to its websites soared by more than 50% to 91 million during last year, with the number of transactions up by a similar level to 58.2 million.

Shares in moneysupermarket were down 3% today.

Analyst David McCann at broker Numis Securities said the loans and mortgages slowdown was a concern, but added that moneysupermarket stands to benefit as consumer spending comes under pressure.

“In aggregate we believe that the diversity of revenues continues to benefit the group,” he said.

“We believe that consumers will increasingly shop around as inflationary pressures and a shortage of financial products continue, to the benefit of moneysupermarket.com.”