Did a slump in travel insurance impact the FY20 profitability of Moneysupermarket.com Group?

Summary

• Moneysupermarket.com Group Plc had reported a decline of 11.0% in its Group revenue during FY20 ended on 31 December 2020.
• MONY had a net cash position of £23.6 million as of 31 December 2020.
• The revenue per active user remained at £16.19 during FY20.
• MONY will pay a final dividend of 8.61 pence per share on 20 May 2021.

Moneysupermarket.com Group Plc (LON:MONY) is the LSE listed consumer services stock. MONY’s shares have generated a return of negative 15.43% in the last 12 months. It was incorporated in 2007.

Business Model

Moneysupermarket.com Group is the UK-based group that operates price comparison websites through brands such as MoneySupermarket, Travelsupermarket and MoneySavingExpert. The Company earns revenue in the form of a fixed marketing fee to sell products on its website. It can be classified into five broader segments –

• Money
• Insurance
• Travel
• Home Services
• com

Recent News

On 28 January 2021, MONY updated that Robin Freestone became a non-executive director of Aston Martin Lagonda Global Holdings with effect from 1 February 2021.

FY20 Financial Highlights (for twelve months period ended 31 December 2020, as on 18 February 2021)

(Source: Company result)

• MONY had reported a decline of 11% in its revenue due to Covid-19 pandemic. Travel channels revenue went down by around 4% during FY20.
• Regarding the profitability, the adjusted EBITDA and the profit after tax went down by 24% and 27%, respectively, during FY20, as compared to an equivalent period of the prior year due to the weak conversion of money.
• The adjusted basic earnings per share was 13.1 pence during FY20.
• The Company had managed to generate robust cash during FY20 as it had generated £83.90 million from operating activities. The net cash position of MONY stood at £23.6 million as of 31 December 2020.
• The Group maintained the same level of FY19 dividend at 11.71 pence per share for FY20 as well. The 2020 final dividend of 8.61 pence per share will be paid on 20 May 2021.
• MoneySuperMarket had witnessed 11.5 million active customers during FY20.
• MoneySavingExpert had around 24 million visits during FY20.

Key Performance Indicators

(Source: Company result)

• Despite Covid-19 issues, MONY’s customer saved around £2.0 billion during FY20 as weak Q2 FY20 performance in credit cards and travel insurance was offset by higher savings in car insurance.
• MONY’s Net promoter score had demonstrated a decline of 200 basis points to 72% during FY20.
• The revenue per active user remained at £16.19 during FY20, lower than the levels of £16.40 achieved during FY19.
• The marketing margin dropped from 61% in FY19 to 57% during FY20.

Share Price Performance Analysis of Moneysupermarket.com Group Plc

(Source: Refinitiv, chart created by Kalkine group)

Shares of Moneysupermarket.com Group Plc were trading at GBX 285.00 and were up by close to 6.34% against the previous closing price as on 18 February 2021, (before the market close at 09:11 AM GMT). MONY's 52-week Low and High were GBX 210.00 and GBX 368.85, respectively. Moneysupermarket.com Group Plc had a market capitalization of around £1.44 billion.

Business Outlook

The Company had highlighted the adverse impacts of Covid-19 pandemic on its business performance. However, it remained optimistic regarding the pace of easing out restrictions and highlighted that it would drive the FY21 performance. MONY had anticipated its FY21 adjusted EBITDA ranging from £96.4 million to £128.80 million. Moreover, the Company anticipated its top-line and bottom-line business to be firmly weighted during H2 FY21. MONY had expected its Q1 FY21 business performance for Insurance and Money to remain at similar levels of Q2 FY20. The home services revenue may improve during Q1 FY21, driven by the recent increase in the price cap.