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Home / Blog / blog / Company Focus || Share surge for switching site || 21/02/2020

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Company Focus || Share surge for switching site || 21/02/2020

Price comparison site Moneysupermarket.com has topped the table for investors after an 11 per cent price share surge following robust full year results.

The site, which compares and switches financial products for consumers, posted results in line with market expectations, reporting a nine per cent increase in group revenue from £355.6m to £388.4m.

The stock, which had previously fallen by 25 per cent since the middle of July, now stands at 367.70p at the time of writing.

So, should investors be switching to Moneysupermarket.com in light of this latest surge?

The revenue rise has come in spite of a 14 per cent dip in fourth quarter revenues for the firm’s Money division. Its Home Services division reported a stellar performance, with a revenue growth of 36 per cent thanks to ‘exceptional’ rates of energy switching. The price comparison site has a new energy auto switching service on the horizon to rival GoCo’s autosave initiative, and it also revealed that 600,000 of its customers are currently using its monitoring services.

Analysts are optimistic about these results, with Stifel welcoming the monitoring service update and describing Moneysupermarket.com’s share price discount to GoCo as ‘anomolous’. Analysts at UBS were also positive, raising their price target on the price comparison site to 415p. It said the positive outlook and data points in today’s results were ‘supportive of the long-term narrative’.

One potential blip on the horizon is that Moneysupermarket.com’s CEO, Mark Lewis, announced on Tuesday that he will be stepping down from the helm after just three years. As yet, a successor has not been found although the search is said to have begun and Lewis is expected to stay in the role until a new CEO is employed. In his three-year tenure, Lewis has performed solidly if not spectacularly, so much of the company’s future plans may depend on his replacement.

Analysts are not too concerned though – its also been pointed out that Moneysupermarket’s dividends have risen by six per cent over the past year, now standing at 11.71p per share. Dividend cover has been over 1.4 for the last five years, which suggests that the dividend is sustainable which is good news for investors.

Moneysupermarket is confident that its Money division will return to growth next year despite this year’s disappointing results and going forward the board said it ‘is confident of delivering expectations for the year.’ While, the uncertainty surrounding the site’s leadership will need to be resolved, Moneysupermarket.com has put in a strong performance and looks to have held its own against rivals GoCo and ComparetheMarket.

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