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RNS

Final Results

Released 07:00 22-Feb-2018

RNS Number : 5860F
Moneysupermarket.com Group PLC
22 February 2018
 

22 February 2018

 

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF EU REGULATION 596/2014.

Moneysupermarket.com Group PLC preliminary results for the year ended 31 December 2017

 

Financial highlights

2017

2016

Change

Group Revenue

£329.7m

£316.4m

+4%

Operating Profit

£94.9m

£91.1m

+4%

Adjusted EBITDA *

£127.2m

£120.8m

+5%

Adjusted Operating Profit *

£113.9m

£107.8m

+6%

Profit After Tax

£78.1m

£73.5m

+6%

Adjusted EPS **

16.9p

15.7p

+8%

Basic EPS

14.4p

13.5p

+7%

Cash ***

£35.1m

£44.6m

-21%

Ordinary Dividend for The Year

10.44p

9.85p

+6%

 

§ Customer savings up 10% to an estimated £2.0 billion as we help customers find better products.

 

§ Revenues up 4% driven by strong insurance growth offset by lower energy switching.

 

§ Adjusted Operating Profit up 6%.

 

§ Net cash £35.1m after £94m distributed to shareholders.

 

§ Total dividend up 6%, continuing our progressive dividend policy.

 

 

Mark Lewis, Moneysupermarket.com Chief Executive Officer, said:

 

"In 2017, customers saved more through us than ever before - £2bn.  And we're not stopping there.  We are committed to leading the way in price comparison to make saving with us easier, quicker and simpler.  Our goal is to offer our customers ways to save that they didn't know existed and to do so in a way that is as effortless as we can make it."

 

Strategy and outlook

 

Today, we set out how we will enhance and extend our offer in two ways: by reaccelerating the core performance and unlocking future areas of growth.

 

Our core business continues to deliver robust results, and we can do even better. The replatforming of our technology infrastructure has provided a unique foundation for growth, although the process has restricted our customer experience innovation. With that replatforming period over we will renew our focus on enhancing the customer experience to deliver commercial gain with raised ambition.

 

In parallel, we have growth plans to extend price comparison and add new market growth with innovations to further personalise price comparison, making it even easier for users and we will redefine our mortgage comparison.

 

To achieve this, we are investing £5m to build out our product engineering teams, focused on customer experience optimisation. Our core markets are expected to grow at around 6-7% and we forecast our growth to be slower than that in 2018, accelerating afterwards. We have started the year at a similar growth rate to last year. This means that adjusted EBITDA for 2018 is expected to be broadly flat before growth resumes from 2019 onwards. 

 

We also expect to incur one-off transitional costs of £6-9m during 2018, relating to the necessary reorganisation.

 

We are encouraged by the early results of our optimisation work on customer journeys on the site and look forward to rolling out these out across our core verticals in 2018. We will share further details on progress through the year.

*     Adjusted Operating Profit ("AOP") is Operating Profit adjusted for intangible amortisation related to acquisitions, goodwill and intangible asset impairment, strategy review and associated reorganisation costs. Reconciliation of AOP is shown on page 4 in the Financial and Business Review. As discussed under Alternative Performance Measures on page 6, the Group intends to use Adjusted EBITDA in future rather than AOP.

 

**    Adjusted earnings per ordinary share is based on profit before tax after adjusting for intangible amortisation related to acquisitions, goodwill and intangible asset impairment, profit on disposal of associate and investment, net finance costs and strategy review and associated reorganisation costs. A tax rate of 19.25% (2016: 20.00%) has been applied to calculate adjusted profit after tax.

 

***  A £40m share buyback programme was completed during 2017, in addition to the Group's ordinary dividends.

 

 

Quarter 4 Trading

 

 

Revenues

Q4 2017

2017

£m

Change

£m

Change

MoneySuperMarket.com

-  Insurance

-  Money

-  Home Services

66.9

37.8

20.2

8.9

0%

+1%

+15%

-25%

294.5

173.6

81.2

39.6

+3%

+12%

+3%

-22%

MoneySavingExpert.com

10.7

+28%

41.5

+13%

TravelSupermarket.com

4.3

-3%

23.3

+4%

Intragroup revenues & Other

(7.6)

+19%

(29.6)

+6%

Group revenues

74.2

0%

329.7

+4%

 

§ Insurance performance was muted by the strong prior year comparative.

 

§ Money growth was driven by strong promotional savings and current account products, which also benefitted MoneySavingExpert.com.

 

§ Energy was impacted by the absence of collective switches and challenging market dynamics.

 

 

Results Presentation

There will be a presentation for investors and analysts at Herbert Smith Freehills, Exchange House, Primrose Street, London, EC2A 2EG at 9.30am this morning.  To watch the presentation being streamed live, please visit: http://corporate.moneysupermarket.com/ to register and listen.

 

 

For further information, contact:

 

Matthew Price, Chief Financial Officer -     Matthew.Price@moneysupermarket.com / 0207 379 5151

 

Jo Britten, Investor Relations Director -      Jo.Britten@moneysupermarket.com  / 0789 646 9380

           

William Clutterbuck, Maitland -                 0207 379 5151

 

 

 

 

Cautionary note regarding forward looking statements

 

This announcement includes statements that are forward looking in nature. Forward looking statements involve known and unknown risks, assumptions, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward looking statements. Except as required by the Listing Rules, Disclosure and Transparency Rules and applicable law, the company undertakes no obligation to update, revise or change any forward-looking statements to reflect events or developments occurring on or after the date such statements are published.

Business Review

In 2017, our diversified business delivered record levels of switching, helping customers to save an estimated £2 billion on their household bills. We built a solid foundation for future growth by completing the re-platforming of our technology infrastructure and returned a record level of cash to our investors through dividends and a share buyback. This was against the backdrop of a volatile trading environment, especially for energy.

Today, we enjoy leading positions in growing markets and our brands are firmly trusted by customers. Our users are engaged and saving across the broadest range of products in the price comparison sector. Our business model is a data-driven marketplace, providing offers to customers that they cannot get elsewhere, value to our providers and a track record of returns to investors.

 

Looking Ahead - Reinvent strategy

Our Reinvent strategy is designed both to reaccelerate growth and unlock new market growth.

 

The replatforming has delivered critical assets for the Group, and we now operate a modern cloud based technology platform offering security, stability and scalability. We have built API service layers to power our own sites and enable commercial partnerships. Significantly we now have a single view of our users across their key interactions which will allow us to serve them better. Work over the last three years on completing the replatforming has restricted the customer experience innovation.  We will now be focused on the customer experience optimisation and new proposition development.

 

Our first priority for reaccelerating core growth is the focus on rapid optimisation of our customer journeys, particularly for those on their mobile phone. We have seen early successes in conversion and marketing efficiency following actions taken in the second half of 2017 from producing an easier, faster and simpler experience. In 2018, we will invest an additional £5m to build out our product engineering hub in Manchester to scale this customer experience focus across our core categories. Adding this capability will complement the existing strengths of our brands and provider relationships strengthening our performance.

 

The second strand of the Reinvent strategy uses the new technology platform to enable the Group to lead the evolution of price comparison to unlock new market growth:

 

§ Personalised MoneySuperMarket. We are improving our single customer view across multiple product categories, so customers are shown new ways to save based on information they have shared with us and open data. We are building a hassle free service for users to save on key bills in one place and remind our customers, for example, when a better energy or insurance deal has been found for them.

 

§ Take price comparison to the user. We are tapping into the opportunity to take price comparison to the sites people are already visiting regularly on their mobile phones. Someone checking their bank balance online, for example, may welcome the offer of a better broadband deal.  We will be leveraging our technology platform, customer and provider reach with the skills and platforms of partners.

 

§ Mortgage price comparison. Customers are already looking to us for help with mortgages, with 16m annual visits to our mortgages site and 25% of mortgage search traffic. In the past, we offered a very limited service and, in return, earned little from providers. We will develop a new user experience to find the most appropriate mortgage online. This enhances our service to customers and moves us deeper into the value chain earning greater share of mortgage commissions.

 

We look forward over the coming months to sharing our progress on our twin track strategy of reaccelerating the performance of our core business, while leading the evolution of price comparison to unlock new market growth.

Financial Review

Our Group demonstrated the value of its diversified offering, delivering an estimated £2 billion of savings for our customers and growing revenues and profits.  We completed our technology replatforming, creating a good foundation for future growth, and we delivered strong cash returns to our shareholders with a total of £94 million returned through ordinary dividends and buy-backs.

The Group's revenues increased 4% to £329.7m (2016: £316.4m) and profit after tax of £78.1m (2016: £73.5m), up 6%.  When reviewing performance, the Directors use a number of adjusted measures, including Adjusted Operating Profit which increased by 6% to £113.9m (2016: £107.8m). This is reconciled from the GAAP measure in the table below and is explained in the following text.

 

Extract of the Consolidated Statement of Comprehensive Income



2017

2016



£m

£m

Revenue


329.7

316.4

Cost of sales


(85.2)

(79.6)

Gross profit


244.5

236.8

Distribution expenses


(29.3)

(34.3)

Administrative expenses


(111.0)

(109.2)

Impairment of goodwill and intangible assets


(9.3)

(2.2)

Operating profit


94.9

91.1

Reconciliation to adjusted operating profit:




Operating profit


94.9

91.1

Amortisation of acquisition related intangible assets


7.3

14.5

Impairment of goodwill and intangible assets


-

2.2

Strategy related one-off costs:




   Technology assets no longer in use


9.3

-

   Strategy review and associated reorganisation costs


2.4

-

Adjusted operating profit


113.9

107.8

Adjusted earnings per ordinary share:




- basic (p)


16.9

15.7


16.8

15.6

Revenue

During the year Group revenues grew 4%. Insurance growth was very strong at 12% whilst Home Services was significantly impacted by the lack of collective switch activity and dynamic external markets. Money picked up in the second half of the year, growing at 3% overall for the year.



 


2017


2016

Change


£m


£m

%

Insurance

173.6


155.2

12%

Money

81.2


78.9

3%

Home Services

39.6


51.0

-22%

MoneySuperMarket.com

294.5


285.1

3%

TravelSupermarket.com

23.3


22.3

4%

MoneySavingExpert.com

41.5


36.8

13%

Other1

-


0.7

-97%

Intercompany revenue1

(29.6)


(28.5)

4%

Total

329.7


316.4

4%

1          Other revenues represent revenues from the shopping and vouchers channels £nil (2016: £0.1m) plus significant, one-off recoveries relating to prior years of £nil (2016: £0.6m) arising from revenue assurance activity. Revenues in MoneySuperMarket.com arising from traffic from MoneySavingExpert.com are shown in both businesses. These intercompany revenues are then eliminated as shown above.

The Group offers price comparison for its customers across a broad range of products. In 2017, it offered fourteen products with revenues of more than £5 million - Car, Home, Landlord, Life and Travel Insurance; Credit Cards, Loans, Current accounts, Savings, Mortgages, Energy, Broadband, Car Hire and Package Holidays.

Insurance growth has been very strong during 2017, helped by positive market conditions as well as internal initiatives such as pricing investments and additional online marketing. The first half was up by 18% and the second half ahead by 6% as prior year comparatives became tougher.

Revenue growth for Money was flat in the first half, and in the second half of the year was up 6%, with growth driven primarily by promotional activity within current accounts and savings.

Revenue in Home Services reduced by 22% from £51.0m to £39.6m.  Utility switching (gas and electricity) makes up the majority of revenues in Home Services and this was impacted by significantly lower levels of collective switch activity. This is where customers sign up to collectively take advantage of one-off deals. While collective switches are still happening, they are not of the same scale as the prior year.  Away from collectives, MoneySavingExpert has helped a large number of users switch their energy, however, current market dynamics mean that a lot of it is not monetised. We committed at the half year to focus on improving our core energy proposition and this is in growth.

TravelSupermarket.com offers customers the ability to search for and compare travel products including car hire, flights, hotels and package holidays. Revenue increased by 4% to £23.3m.

MoneySavingExpert is one of the UK's biggest consumer finance websites and is dedicated to cutting consumers' costs and fighting their corner by means of journalism, great tools and a large community. Its utilities revenues were impacted by the reduction in collective switch activity and there was strong revenue growth from Money products, notably savings and current accounts.

Gross Profit and Distribution Expenses

Group gross margins were stable at 74% (2016: 75%). The Group maintained its disciplined approach to marketing and continues to operate paid search at a profit. Online marketing accounts for 24% of our revenue, up 2% on the prior year and is in part due to customers shifting to mobile.

 

We have seen strong mobile growth.  And we are through the tipping point, with mobile now accounting for nearly half of our customer visits. Looking back over the last few years, we have managed through the headwind of this mobile transition, which puts around 1% point a year pressure on our gross margins through margin and conversion impacts.

Distribution costs were lower than last year because of reduced TV spend by TravelSupermarket. We continued the 'You're So MoneySuperMarket' campaign on television, supported by radio and print.

Administrative Expenses

Administrative costs (excluding amortisation of acquisition related intangible assets and strategy review and associated reorganisation costs) increased by 7% from £94.9m to £101.3m in 2017. Staff costs (including contract resource) increased 7% from £50.6m to £54.1m. Other administrative costs increased by £3m, mainly due to increased irrecoverable VAT from higher online marketing.

Impairment of goodwill and intangible assets

In 2016, goodwill of £1.5m from the acquisition of OnTrees in March 2014 was written off, and we wrote off the residual book value of MySuitcase within TravelSupermarket, as this feature under-performed.

Amortisation of acquisition related intangible assets

The acquisition of Moneysupermarket.com Financial Group Limited by the Company prior to its Listing gave rise to £207.2m of intangible assets. These have been written off over a period of 3-10 years ending in 2017, with a charge of £6.2m expensed in 2017 (2016: £13.2m). The acquisition of the trade and certain assets of MoneySavingExpert.com and a sole trader business from Martin Lewis (together MSE) on 21 September 2012 by the Group gave rise to £12.9m of intangible assets (excluding goodwill). These are being written off over a period of 3-10 years with a charge of £1.0m included within 2017 (2016: £1.3m). We expect amortisation of acquisition intangible assets to be in the region of £1 million for 2018.

Strategy related one-off costs

During 2017, the Group reviewed its strategy following the completion of its technology investment replatforming.  As part of this strategic review, the Group wrote off £9.3m of technology assets that are no longer going to be in use.  This comprised product development trials that are not being rolled-out of £3.3m, and a further £6m for work on code bases that will no longer be used.  In addition, the Group incurred expenditure in undertaking the review, which resulted in one-off costs and some related reorganisation costs.  In 2018, we also expect to incur one-off transitional costs of £6-9m, relating to the necessary reorganisation to support our new strategy.

Investment in Technology

The Group completed its technology replatforming in 2017, with £15.8m capitalised in 2017 (2016: £22.6m). This investment focused on the continued roll out of our new platform including our single Enterprise Data Warehouse. This gives a modern and scalable tech infrastructure and provides a good foundation to deliver growth in years ahead. The total technology spend, defined as technology operating costs excluding amortisation plus technology capital investment, for 2017 is £39m (2016: £46m). Software amortisation costs were £12.2 million in 2017 and we expect the full-year amortisation charge to be in the region of c.£14 million for 2018.

Alternative performance measures

The Group uses a number of alternative (non-Generally Accepted Accounting Practice ("non-GAAP")) financial measures which are not defined within IFRS. The Directors use these measures when reviewing performance of the Group, evidenced by executive management bonus performance targets being measured in relation to AOP and Long Term Incentive Schemes being measured in relation to Adjusted EPS. As such, these measures are important and should be considered alongside the IFRS measures. The adjustments are separately disclosed and are usually items that are non-underlying to trading activities and which are significant in size. For example, amortisation of acquisition intangibles is a non-cash item which fluctuates significantly in line with acquisition activity and the impairments of assets and other costs arising from the strategic review are considered to be non-underlying and significant in size. Alternative performance measures used within these statements are accompanied with a reference to the relevant GAAP measure and the adjustments made.

In 2018, as part of our strategic review, the Directors intend to stop using AOP and instead switch focus to Adjusted EBITDA alongside the GAAP measures and Adjusted EPS.  The Group is moving out of the phase of significant capital investment in its technology platform and instead focusing on developing and optimising its platform.  Therefore, capital investment and amortisation will be less meaningful and so it is more appropriate to focus on an Adjusted EBITDA measure alongside Adjusted EPS. Adjusted EBITDA will adjust operating profit for items considered non-underlying to the trading operation of the Group and before interest, tax and the costs associated with the use of assets that support the generation of these earnings.

Group KPIs

The Directors use key performance indicators (KPIs) to assess the performance of the business against the Group's strategy. Our strategy has been to build our core business of helping customers to find the right product by investing in our technology, customer data and tools. This enables us to build deeper relationships, and deliver more value to both customers and providers.

The three strategic priorities are: be the best site; earn customer loyalty; and be the preferred partner for our providers. The KPIs measure our progress against these priorities.  Following the completion of our new technology platform, we took the opportunity to review our strategy, as discussed in the Business Review Section.  We have simplified and refined the number of KPIs, aligning them to our strategic objectives and using the new data we have from Enterprise Data Warehouse; creating a modern suite of metrics. The revised KPIs are set out as an appendix to this document.

 

Best site: Be the easiest way for people to find the right products for their needs


31 December

31 December



2017

2016

Change

Average monthly unique visitors

24.0m

23.4m

3%

Investment in technology

£15.8m

£22.6m

-30%

During the year we invested £15.8m (2016: £22.6m) in our technology and delivered improvements to the customer journey, helping customers find the right product for them. We have continued the roll out of the re-platform and the Enterprise Data Warehouse and have successfully implemented a new finance and HR system. Unique monthly visitors were diminished by our decision to close the MoneySuperMarket.com vouchers channel at the end of 2016, although this is balanced by strong growth in MoneySavingExpert.com users, validating the strength and huge reach of this brand.

 

Earn customer loyalty: Trusted destination brands


31 December

31 December



2017

2016

Change

Unique adults choosing to share data

24.9m

22.2m

12%

Net promoter score

47%

43%

4%

Savings made by customers

£2.0bn

£1.8bn

10%

We estimate that in 2017 our customers saved £2.0bn, an increase of 10% on the previous year, demonstrating the value of our customer proposition. Even more customers chose to share data with us, up 12% to nearly 25 million. Our Net Promoter Score increased 4%, attributable to an increase in customer satisfaction with the Moneysavingexpert.com brand.

As previously disclosed, MoneySuperMarket.com was fined £80,000 by the Information Commissioner's Office for sending direct marketing emails to customers without their consent.  We apologised for this isolated incident and put in place measures to ensure it does not recur.

 

 

Preferred partner: Be the best way for providers to acquire customers

 


31 December

31 December



2017

2016

Change

Number of providers

989

980

+1%

Marketing margin

65%

64%

+1%

Our business' success is based on providing value to both our customers and our providers. Our providers need an efficient market place to reach the right customers effectively. Providers understand the value we bring and we continue to attract a strong panel of providers on our sites.

Our marketing margin was stable.

 

Cash

As at 31 December 2017 the Group had cash of £35.1m (2016: £44.6m). We completed our £40m share buyback programme announced in February 2017.

In November 2017, the Group exercised its option to extend by a further year to December 2020, the three-year revolving credit facility of £100m in committed funds provided in equal parts by Lloyds Bank PLC and Barclays Bank PLC. The Group also has an accordion option to apply for up to an additional £100m of committed funds. The facility was unused at the year end.

 

Dividends

For 2017, the Board has recommended a final dividend of 7.60 pence per share, making the proposed full-year dividend 10.44 pence per share (2016: 9.85 pence per share). The 6% increase in the 2017 proposed full-year dividend is in line with our policy and underlying dividend cover is maintained at 1.6 times (2016: 1.6 times). The final dividend of 7.60 pence per share will be paid on 15 May 2018 to shareholders on the register on 6 April 2018, subject to approval by shareholders at the Annual General Meeting to be held on 3 May 2018.

 

Tax

The Group tax charge of £18.0m in the Consolidated Statement of Comprehensive Income represents an effective tax rate of 18.7% (2016: 19.5%). This is broadly in line with the prevailing rate of 19.25% (2016: 20.00%) and the Group expects the underlying effective rate of tax to continue to approximate to the standard UK corporation tax rate.

 

Earnings per ordinary share

Basic statutory earnings per ordinary share for the year ended 31 December 2017 was 14.4p (2016:13.5p). Adjusted basic earnings per ordinary share increased from 15.7p to 16.9p per share.

The adjusted earnings per ordinary share is based on profit before tax after adjusting for intangible amortisation related to acquisitions, goodwill impairments, the profit on disposal of investments and other one off items. The tax rate of 19.25% (2016: 20%) has been applied to calculate adjusted profit after tax.

 

Outlook

We have outlined how we are extending the offering, accelerating performance and leading innovation in price comparison.  An early priority is enhancing the customer experience on our site driving conversion. We have clear growth plans to extend price comparison onto new markets.

 

To achieve this, we are investing £5m to build out our product engineering teams, focused on customer experience optimisation. Our core markets are expected to grow at around 6-7% and we forecast our growth to be slower than that in 2018, accelerating afterwards. We have started the year at a similar growth rate to last year. This means that adjusted EBITDA for 2018 is expected to be broadly flat before growth resumes from 2019 onwards. 

 

We also expect to incur one-off transitional costs of £6-9m during 2018, relating to the necessary reorganisation.

 

We are encouraged by the early results of our optimisation work on customer journeys on the site and look forward to rolling out these out across our core verticals in 2018. We will share further details on progress through the year.

Consolidated Statement of Comprehensive Income

for the year ended 31 December 2017











 

31 December

 

31 December


Note



2017

2016





£m

£m







Revenue




329.7

 316.4

Cost of sales




(85.2)

(79.6)







Gross profit




244.5

236.8

Distribution expenses




(29.3)

(34.3)

Administrative expenses




(111.0)

(109.2)

Impairment of intangible assets




(9.3)

   (2.2)







Operating profit




94.9

91.2







Finance income




0.1

0.1

Finance costs




(0.9)

(0.8)







Net finance costs




(0.8)

(0.7)





              

              

Profit on disposal of associate




0.9

0.8

Profit on disposal of investment




1.1

-





              

              

Profit before tax




96.1

91.3

Taxation




(18.0)

(17.8)





              

              

Profit for the year




78.1

73.5













Total comprehensive income for the year




78.1

73.5













Earnings per share:






Basic earnings per ordinary share (pence)

2



14.4

13.5

Diluted earnings per ordinary share (pence)

2



14.4

13.4







 

Consolidated Statement of Financial Position

 



31 December

31 December


Note

2017

2016



£m

£m

Assets




Non-current assets




Property, plant and equipment


9.4

7.5

Intangible assets

4

144.6

157.6

Investments


0.4

0.5

Total non-current assets


154.4

165.6





Current assets




Trade and other receivables


37.4

35.7

Prepayments


5.5

3.6

Cash and cash equivalents


35.1

44.6

Total current assets


78.0

83.9

Total assets


232.4

249.5





Liabilities




Non-current liabilities




Deferred tax liabilities


9.5

8.3

Total non-current liabilities


9.5

8.3





Current liabilities




Trade and other payables


46.9

46.8

Current tax liabilities


6.0

8.0

Total current liabilities


52.9

54.8

Total liabilities


62.4

63.1





Equity




Share capital


0.1

0.1

Share premium


203.3

202.7

Reserve for own shares


(3.5)

(3.7)

Retained earnings


(88.6)

(71.4)

Other reserves


58.7

58.7

Total equity


170.0

186.4

Total equity and liabilities


232.4

249.5





 

The Financial Statements were approved by the Board of Directors and authorised for issue on 21 February 2018. They were signed on its behalf by:

 

 

Mark Lewis

 

 

Matthew Price



Consolidated Statement of Changes in Equity

for the year ended 31 December 2017

 


Issued share capital

Share premium

Other reserves

Retained earnings

Reserve for own shares

Total


£m

£m

£m

£m

£m

£m

At 1 January 2016

0.1

202.4

58.7

(91.6)

(3.8)

165.8

Profit for the year

-

-

-

73.5

-

73.5

Total comprehensive income for the year

-

-

-

73.5

-

73.5

Purchase of shares by employee trusts

-

-

-

-

(3.9)

(3.9)

Exercise of LTIP awards

-

-

-

(4.0)

4.0

-

New shares issued

-

0.3

-

-

-

0.3

Distribution in relation to LTIP

-

-

-

(0.5)

-

(0.5)

Equity dividends

-

-

-

(51.1)

-

(51.1)

Tax effect of share-based payments

-

-

-

0.4

-

0.4

Share-based payments

-

-

-

1.9

-

1.9

At 31 December 2016

0.1

202.7

58.7

(71.4)

(3.7)

186.4








 

At 1 January 2017

0.1

202.7

58.7

(71.4)

(3.7)

186.4

Profit for the year

-

-

-

78.1

-

78.1

Total comprehensive income for the year

-

-

-

78.1

-

78.1

Purchase of shares by employee trusts

-

-

-

-

(2.7)

(2.7)

Exercise of LTIP awards

-

-

-

(2.9)

2.9

-

New shares issued

-

0.6

-

-

-

0.6

Distribution in relation to LTIP

-

-

-

(0.3)

-

(0.3)

Equity dividends

-

-

-

(54.1)

-

(54.1)

Share buy back

-

-

-

(40.0)

-

(40.0)

Tax effect of share-based payments

-

-

-

-

-

-

Share-based payments

-

-

-

2.0

-

2.0

At 31 December 2017

0.1

203.3

58.7

(88.6)

(3.5)

170.0

.

Consolidated Statement of Cash Flows

for the year ended 31 December 2017





 

 

 Year ended 31 December

2017

 

 

Year ended

31 December

2016

 


Note



£m

£m

 

Operating activities





 

Profit for the year




78.1

73.5

Adjustments to reconcile Group profit for the year to net cash flow from operating activities:






 Depreciation of property, plant and equipment




1.2

1.9

 Amortisation of intangible assets




19.5

25.6

 Impairment of intangible assets




9.3

2.2

 Net finance costs




0.8

0.7

 Profit on disposal of associate and investment




(2.0)

(0.8)

 Equity settled share-based payment transactions




2.0

1.9

 Tax charge




18.0

17.8

 Changes in trade and other receivables




(3.6)

(6.9)

 Changes in trade and other payables




1.9

6.0

 Tax paid




(18.9)

(15.9)

Net cash from operating activities




106.3

106.0

Investing activities






Interest received




0.1

0.1

Acquisition of property, plant and equipment




(1.5)

(0.8)

Acquisition of intangible assets




(19.4)

(21.9)

Acquisition of investments


1


(0.4)

(0.5)

Disposal of associate and investment


1


2.4

0.8

Net cash used in investing activities




(18.8)

(22.3)







Financing activities






Proceeds from share issue




0.7

0.2

Dividends paid


3


(54.1)

(51.1)

Share buy back




(40.0)

-

Distribution in relation to Long Term Incentive Plan




(0.3)

(0.5)

Proceeds from borrowings




57.5

44.0

Repayment of borrowings




(57.5)

(44.0)

Purchase of shares by employee trusts




(2.7)

(3.9)

Payment of transaction costs related to financing activities




(0.2)

(0.2)

Interest paid




(0.4)

(0.3)

Net cash used in financing activities




(97.0)

(55.8)







Net (decrease)/increase in cash and cash equivalents




(9.5)

27.9

Cash and cash equivalents at 1 January




44.6

16.7

Cash and cash equivalents at 31 December




35.1

44.6

 

 

Notes

 

The Financial Statements are prepared on the historical cost basis. Comparative figures presented in the Financial Statements represent the year ended 31 December 2016. The Financial Statements are prepared on a going concern basis, which the Directors deem appropriate, given the Group's positive cash position, continued growth and forecast profitability.

 

1 Acquisitions and Disposals

 

HD Decisions Limited

In June 2017, the Group received final consideration of £0.9m in respect of the earnout period. No further amounts are due.

 

Other investments

In February 2016, the Group acquired a 12.8% shareholding of Social Significance Limited for consideration of £0.5m paid in cash. The investment was disposed of in January 2017 for a total consideration of £1.6m.

 

During the year the Group invested a total of £0.4m in minority stakes in two small fintech businesses.

 

2 Earnings per share

 

Basic earnings per share

Basic earnings per share amounts are calculated by dividing the profit or loss for the year attributable to ordinary equity holders of the Company, by the weighted average number of ordinary shares outstanding during the year. The Company's own shares held by employee trusts are excluded when calculating the weighted average number of ordinary shares outstanding.

 

Diluted earnings per share

Diluted earnings per share amounts are calculated by dividing the profit or loss for the year attributable to ordinary equity holders of the Company, by the weighted average number of ordinary shares outstanding during the year plus the weighted average number of ordinary shares that would be issued on the conversion of all dilutive potential ordinary shares into ordinary shares.

 

Earnings per share

Basic and diluted earnings per share have been calculated on the following basis:

 



2017

2016

Profit after taxation attributable to ordinary equity holders (£m)


78.1

73.5

Basic weighted average ordinary shares in issue (millions)


540.8

546.6

Dilutive effect of share based instruments (millions)


1.7

2.2

Diluted weighted average ordinary shares in issue (millions)


542.5

548.8

Basic earnings per ordinary share (p)


14.4

13.5

Diluted earnings per ordinary share (p)


14.4

13.4

 

 

3Dividends






2017

2016



£m

£m

Equity dividends declared and paid during the year on ordinary shares:

Final dividend for 2015: 6.60p per share


-

36.1

Interim dividend for 2016: 2.75p per share


-

15.0

Final dividend for 2016: 7.10p per share


38.7

-

Interim dividend for 2017: 2.84p per share


15.4

-

Total


54.1

51.1

Proposed for approval (not recognised as a liability at 31 December):

Equity dividends on ordinary shares:




Final dividend for 2017: 7.60p per share (2016: 7.10p per share)


40.7

-

 

 

4 Intangible assets


Market related

Customer relationship

Customer list

Technology related

Total


£m

£m

£m

£m

£m

£m

Cost:







At 1 January 2016

148.7

69.3

2.3

45.7

 181.9

447.9

Additions

-

-

-

22.6

-

22.6

Transfer

-

-

-

(1.1)

-

(1.1)

At 1 January 2017

148.7

69.3

2.3

67.2

 181.9

469.4

Additions

-

-

-

15.8

-

15.8

 

At 31 December 2017

148.7

69.3

2.3

83.0

181.9

485.2






















Amortisation and impairment:







At 1 January 2016

122.0

69.3

2.3

17.6

72.8

284.0

Amortisation charge for the year

14.5

-

-

11.1

-

25.6

Impairment charge

-

-

-

0.7

1.5

2.2

At 1 January 2017

136.5

69.3

2.3

29.4

74.3

311.8

Amortisation charge for the year

7.3

-

-

12.2

-

19.5

Impairment charge

-

-

-

9.3

-

9.3

At 31 December 2017

143.8

69.3

2.3

50.9

74.3

340.6






















Net book value:







At 31 December 2016

12.2

-

-

37.8

107.6

157.6








At 31 December 2017

4.9

-

-

32.1

107.6

144.6

 

5 Related party transactions

In addition to their salaries, the Group also provides non-cash benefits to Directors and Executive Officers. Directors and Executive Officers also participate in the Group's Long Term Incentive Plan.

Bruce Carnegie-Brown, Peter Plumb (final 2016 dividend only, prior to resigning as a Director), Matthew Price, Robin Freestone and Sally James in total received dividends from the Group totaling £71,909 (2016: £114,117).

There were no amounts outstanding to the Company or any future commitments of the Company as at 31 December 2017 (2016: nil).


6 Commitments and Contingencies

The Group is committed to incur capital expenditure during 2018 on office fixture and fittings, and property, plant and equipment of £1.6m (2016: £nil). Along with most companies of our size, the Group is a defendant in a small number of disputes incidental to its operations and from time to time is under regulatory scrutiny.

As a leading website operator, the Group occasionally experiences operational issues as a result of technological oversights that in some instances can lead to customer detriment, dispute and potentially cash outflows. The Group has a Professional Indemnity Insurance Policy in order to mitigate liabilities arising out of events such as this.

In aggregate, the commitments and contingencies outlined above are not expected to have a material adverse effect on the Group.

 

 

Appendix

New Group KPIs

The Directors use key performance indicators (KPIs) to assess the performance of the business against the Group's strategy. As we pivot our strategy and complete the re-platform, it is right that we update the Group KPIs to align them to our strategic objectives and optimise the new data we have from our Enterprise Data Warehouse to create a modern suite of metrics. The KPIs to measure our progress against these priorities are outlined in the table below. We will transition to reporting five key strategic KPIs: Estimated Customer Savings, Customer Net Promoter Score, Active Users, Revenue per Active User and Marketing Margin.

We are moving to an external measurement of NPS, we have chosen the YouGov BrandIndex NPS Recommend Score and using this data to create a Group-wide metric, as well as individual brand level metrics. By subscribing to this service we will be able to use a consistent and externally measured benchmark across all our brands.

Enterprise Data Warehouse allows us to store enquires across our core seven channels - an enquiry is a completed search on the website made by customer-which then allows us to introduce active users, a more robust measure of customer engagement. This is defined as customers who have made an enquiry in the last 12 months and will help measure customer relevance and brand strength.

The revenue per active user does not cover all of the Group's revenue.  It is the revenue directly attributed to the enquiries described above. These are enquires made on the MoneySuperMarket website for Car insurance, Home insurance, Life insurance, Travel insurance, Credit Cards, Loans, and Energy. This revenue represents c.60% of Group revenues and we expect to increase this as more channels transition into the Warehouse. The key drivers of this metric will be conversion and loyalty. 

 


31 December


2017

Estimated Customer savings

£2.0 billion

Net Promoter Score

69%

Active Users

13.2 Million

Revenue per Active User

£14.81

Marketing Margin

65%

 

Net Promoter Score:                Twelve monthly rolling average (1 Jan 2017- 31 Dec 2017 inclusive) measured by YouGov Brand index service recommend score weighted by revenue to create a Group wide NPS.

 

Active Users:                          The number of unique accounts running enquiries in our core seven channels (Car insurance, Home insurance, Life insurance, Travel insurance, Credit Cards, Loans, Energy) in the prior 12 month period.

 

Revenue per Active User:      This is the revenue for the core seven MoneySuperMarket channels divided by the number of active users.

Re-presentation of revenues

We are re-presenting our revenue statement to reflect the new organisation structure. The move from a brand to a vertical led organisation has meant that we have revised our internal reporting and it is therefore appropriate that this is reflected externally. The key changes include reflecting the MoneySavingExpert revenue to the appropriate Vertical (Insurance, Money and Home Services). The main constituent parts of Other Revenues include Travel and Shopping.

 

 


2017


2016

Change


£m


£m

%

Insurance

176.5


157.8

12%

Money

85.4


81.0

5%

Home Services

43.0


53.8

-20%

Core Group Revenues

304.9


292.6

4%

Other Revenues

24.8


23.8

4%

Total

329.7


316.4

4%

 

 

 

 

Statutory Information

The financial information set out above does not constitute the Company's statutory accounts for the years ended 31 December 2017 or 31 December 2016 but is derived from those accounts. Statutory accounts for 2016 have been delivered to the registrar of companies, and those for 2017 will be delivered in due course. The auditor has reported on those accounts; their reports were (i) unqualified, (ii) did not include a reference to any matters to which the auditor drew attention by way of emphasis without qualifying their report and (iii) did not contain a statement under section 498 (2) or (3) of the Companies Act 2006.

 

The annual report and accounts for the year ended 31 December 2017 will be posted to shareholders in March 2018. The results for the year ended 31 December 2017 were approved by the Board of Directors on 21 February 2018 and are audited. The Annual General Meeting will take place on 3 May 2018.  The final dividend will be payable on 15 May 2018 to shareholders on the register at the close of business on 6 April 2018.

 

Presentation of figures

Certain figures contained in this announcement, including financial information, have been subject to rounding adjustments. Accordingly, in certain instances, the sum or percentage change of the numbers contained in this announcement may not conform exactly with the total figure given.


This information is provided by RNS
The company news service from the London Stock Exchange
 
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