Money website reveals signs of recovery

Feb 25 2010 by Iain Laing, The Journal

PRICE comparison website moneysupermarket.com has revealed that it has seen signs of recovery after revenues were hit by a credit drought in 2009.

The firm reported evidence of “building momentum“ in sales so far during 2010, helped by an advertising campaign fronted by comedian Omid Djalili.

Revenues slid 22% to £136.9m last year, with the damage done mainly by a 44% slump in sales at its money division.

This was caused by a shift in the sales mix away from more lucrative credit products towards savings and the closure of its biggest revenue generator – Barclays’ First Plus loans arm – to new business.

The firm said: “The current level of trading is consistent with the board’s view that the business has stabilised and that the worst is behind us.”

The company, based in Flintshire, north Wales, added underlying earnings were down 26% to £36m for the year as the group shed 80 jobs to cut costs.

Revenues are ahead in all of the firm’s operating businesses so far this year except travel, which has suffered as consumers rein in discretionary spending.

Excluding travelsupermarket.com, visitors to the site were flat at 120 million last year although the group now has 120 extra providers of products on the site.

Shares rose 4% as the group unveiled another special dividend of £25m for investors and said the cost cutting moves carried out by chief executive Peter Plumb had set the business up for growth as the economy recovers.

Mr Plumb said he expected the economy to remain “challenging“.

Numis analyst James Hamilton flagged up the potential for further one-off dividend payouts and said there was “scope for recovery“ in money revenues although he expects this to “be years, not months away“.

He added: “You would want to own moneysupermarket.com in the short term for income... and in the long term for capital gain through recovery in UK retail financial products and growth.”