Market Spooked By Group Plc’s Mixed Results

Group revenues increase at Group plc (LON:MONY), but fears over declining sales growth send shares plummeting.

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Price comparison website (LSE: MONY) today announced mixed results for the six months ending 30 June. A spooked market sent shares down over 15% in early trading.

Group revenue for increased 10% to £112.3m for the period, the company reported, led by strong performance in its Insurance, Home Services and Travel businesses. But the group’s Money business continues to be impacted by the ‘Funding for Lending’ scheme, which reduces what savers earn on their deposits and is negatively impacting’s revenues as well.

Revenue from the Money business slipped 13% in the first six months of the year, despite a 4% increase in visitors to the Money comparison pages.

The Group has separately announced today that Paul Doughty, chief financial officer, will step down no later than June 2014.

Peter Plumb, chief executive officer, chose to focus on the positive, commenting:  

“We’ve had a good first half of 2013. We grew our Insurance, Home Services and Travel businesses which more than offset lower demand in our Money business where savings revenues continue to be impacted by the Government’s ‘Funding for Lending’ scheme which is reducing what savers earn on their deposits. 

“ has proved a powerful addition to the MoneySupermarket team. It continues to prosper with the launch of the innovative Cheap Energy Club which has proved a hit because it helps consumers monitor and reduce their energy bills.”

Other financial highlights include the group’s gross margins, which improved to 77.2%, benefiting largely from the acquisition of (MSE) in September 2012. The company reported that trading in MSE is 10% ahead of where it was at this time last year.

Total profits from operating activities reached £20m, compared with £11.5m for the first six months of 2012, the company reported. Though administrative expenses did increase, distribution costs were down 5%.

On 26 July, paid a special dividend of 12.92p per share. This large payout combined with the cost of acquiring MSE have now hit’s balance sheet — cash balances still sat at £25.4m at the end of June, compared with £36.7m at this point last year. also announced a 20% increase to its interim dividend, to 2.16p per share. 

Plumb added: “The 20% increase in the interim dividend reflects our progress which is only possible because of continuing investment in our brands, in digital marketing and technology, and in making sure customers find us the best shop for comparing prices. That way we can save more people more money and continue to build our business. If you’re on a tight budget is one of the easiest ways to make your pounds go further. So we’re glad we are on course to help more people save more money in 2013.”

Investors following will no doubt look to see how the firm can get its Money business — which comprises 25% of overall revenues — growing again.

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> Jill does not own shares of any company mentioned.

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