Moneysupermarket share price up 6% on Thursday mid-morning trade
Moneysupermarket’s profit and revenue slumped in 2020 as lockdowns resulted in a fall in demand for the price-comparison website’s travel insurance and credit products.
The company confirmed its pre-tax profit had fallen to £69.3m in 2020, down from £94.9m the year before.
Total revenue dropped by 11% to £344.9m, while adjusted earnings per share fell to 13.1p, down by 28%.
The company announced a dividend of 11.7p per share, which is the same level as 2019.
In addition to lockdowns, challenging market conditions are making life difficult for Moneysupermarket, according to analysts.
“In 2020 the availability of credit products was a real challenge for Moneysupermarket, as banks and credit cards tightened lending criteria. This resulted in a less compelling range of alternatives for consumers,” said Dan Thomas, senior analyst at Thirdbridge.
“Players like Experian and Clearscore are also moving into Moneysupermarket’s territory offering competing services alongside their more traditional credit bureau products,” Thomas continued.
Moneysupermarket could raise its prices to counteract the impact on revenue from a drop-off in demand, said Thomas.
“Price comparison websites like Moneysupermarket could offset potential volume headwinds by negotiating higher fees with insurers as they seek to reflect the increased customer lifetime value associated with lower churn.”
Moneysupermarket’s share price traded over 6% up on Thursday at mid-morning trade at 284p, while the company remains some way off its price point from 12 months ago of 367.7p.
Peter Duffy, chief executive of Moneysupermarket Group, believes there is work to be done to get customers back after a tough year for the company.
“We have again helped millions of UK households save on their bills, while providing indispensable financial advice throughout the Covid-19 pandemic,” said Duffy.
“Our job now is to encourage consumers to engage with us more and save on more of their bills. We will use our data better so consumers find our sites easier to use and are reminded when there are savings available to them.”