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Moneysupermarket Q1 revenue up 4%, confident of meeting market expectations
FTSE 250 comparison website Moneysupermarket.com reported a 4% jump in first-quarter revenue on Wednesday and said it remains confident of meeting current market expectations.
Total revenues in the quarter ending 31 March came to £88.3m, with revenue in the insurance business up 4% to £47.1m and revenue from the money segment down 1% to £23.1m. In the home services business, revenue was 15% higher at £11.5m, while core group revenues increased 4% to £81.7m.
The company said its performance was driven by strong insurance switching underpinned by competitive pricing, while money switching reduced without the strong products of the previous quarter. Meanwhile, home services saw strong growth in core energy switching.
Chief executive officer Mark Lewis said: "Trading is on track in this year of transformation as we reinvent the business to help people save more money. We are expanding our product engineering hub in Manchester to improve the customer journeys on our sites and plan to unlock future growth with the agreement to acquire Decision Tech - a leader in home communications price comparison and white label B2B comparison services."
RBC Capital Markets said total revenues were in line with its expectation of £88.2m, while insurance revenues grew more than the 3% it had pencilled in. RBC had expected the money business to see a 1% increase in revenues.
"Moneysupermarket has a unique position versus peers with strong market positions in all the key price-comparison verticals. However, until we get greater clarity on the earnings outlook into 2019, we believe that it is too early to become more positive despite the de-rating since the FY17 result," said analyst Kamran Hossain.
Numis said this is an "encouraging" trading update and reiterated its 'buy' rating and 390p price target on the stock.
"We do not expect to change estimates on the back of this reassuring update, though will need to incorporate the recently announced acquisition of Decision Tech at the time of H1 results," it said.