iSelect Limited today noted the Australian Competition and Consumer Commission (ACCC) proceedings taken against it in relation to commercial disclosure and statements that were displayed on its energy comparison site.
In the release dated 12 April 2019, iSelect Limited (ASX: ISU) stated that after talking with customers it has understood that Australian households are struggling with high energy prices and are looking for help to find a better value. The company, therefore, believes its energy comparison service strengthens competition, ethically and in accordance with industry standard.
iSelect assured its shareholders about the process in place to ensure compliance while taking its obligations under Australian Consumer Law seriously. The matter has now moved to the Federal Court.
For the first half of Fiscal 2019, iSelect reported 80% growth in underlying EBIT to $6.2 million, reflecting the positive return on in investment (ROI) from marketing investment. The revenue was down 8% to $74.3 million and statutory net loss after tax was $6.9 million compared to $1.5 million loss in 1H FY18. The results present the company’s focus on profitable growth, ROI from targeted marketing investment, strategic investment in technology and an emphasis on core operations and the customer.
The Group’s Energy & Telco revenue was down 18% to $23.3 million, partly offset by a 10% improvement in Revenue Per Sale (RPS), reflecting an increase in more profitable multi-product sales. However, EBITDA performed strongly, up 62%, reflecting the company’s focus on generating profitable revenue.
iSelect maintains a robust balance sheet with $29.2 million cash and no debt that could strongly support the investment in technology and iMoney to drive future growth. The company has planned no dividends or buy-backs to be made in Fiscal 2019.
iSelect’s CEO and Executive Director, Brodie Arnhold, earlier stated that the second half of FY19 will be focused on addressing the conversion performance of its Cape Town operations and completing the restructuring of the Home Loans business.
On the segmental front, health business is expected to undergo changes through website improvements and staff training underpinned by the regulatory reform in the Private Health Insurance business. Life & GI business is forecasted to see continued growth in smaller verticals while the technology initiatives are reportedly expected to be rolled out over the next 12-18 months to enable the ‘single view of the customer’. For the energy sector, the company commits to work closely with regulatory bodies to evolve customer experience and provide market-leading service to all its customers based on needs.
Arnhold added “iSelect continues to maintain its unwavering focus on marketing ROI and key investments in technology and customer experience. I expect these improvements to be finalised by the end of June, with the benefits flowing from FY20.
In today’s trading session, ISU stock price declined by 3.175% to trade at $0.610 on 12 April 2019 (1:14 PM AEST). Over the past 12 months, the stock has declined by 37.31% including a negative price change of 16.00% in the past three months.
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