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RNS
Moneysupermarket.com Group PLC   -  MONY   

Interim Results

Released 07:00 18-Jul-2019

RNS Number : 8971F
Moneysupermarket.com Group PLC
18 July 2019
 

                                                                                                                                18 July 2019

 

Interim results: Encouraging trading performance as momentum in strategy continues

 

6 months ended 30 June

2019

2018*

Change %

Group revenue

£199.4m

£173.7m

15

Adjusted EBITDA*

£72.9m

£62.2m

17

Operating profit

£61.4m

£52.0m

18

Profit after tax

£50.2m

£42.5m

18

Adjusted basic EPS*

9.4p

8.4p

12

Basic EPS

9.4p

7.9p

19

Operating cashflow

£51.4m

£43.0m

20

(Net debt)/ Net cash

£(12.6)m

£24.4m

n.m.

Interim dividend for the period

3.10p

2.95p

5

 

 

§ Encouraging trading performance, with revenue growth ahead of the market for the six months.

 

§ Reinvent strategy continues to reaccelerate core growth and unlock new market growth.

 

§ Revenue grew 15% to £199.4m driven by exceptional energy switching, the acquisition of Decision Tech in August 2018 and our ongoing customer experience optimisation.

 

§ Adjusted EBITDA of £72.9m, in line with expectations. This is growth of 15% if 2018 is adjusted for IFRS 16.

 

§ Strong operating cash generation of £51.4m during the period, increasing 20% year on year.

 

§ Interim dividend increased 5% reflecting our progressive dividend policy.

 

Mark Lewis, Chief Executive Officer of Moneysupermarket Group, said:

 

"We grew the business strongly in the first half, already helping households save over £1bn this year, particularly after the energy price cap came in and then went up. Millions of people faced rising energy bills and we helped many of them to find a better deal, saving them hundreds of pounds in just a few minutes on our sites.

 

"Our Reinvent strategy continues to make it easier and quicker to save and is now supported by the new MoneySuperMarket branding, which encourages people to 'Get Money Calm' by using our site to pay less across a broad range of bills."

 

Outlook

 

The Board is confident of delivering market expectations for the year.*

 

* Notes: 

 

As the Group adopted IFRS 16 using the modified retrospective approach, prior year comparative numbers are not restated.  Reported year on year EBITDA growth is higher than would be the case if the comparative numbers were IFRS 16 adjusted. Adjusting for IFRS 16, we expect 2018 adjusted EBITDA to have been £63.3m and adjusted EBITDA growth in 2019 to have been 15%. An indicative guide to the impact of this is included in the relevant areas of this document.

 

Adjusted EBITDA is operating profit adjusted for depreciation, amortisation and other non-underlying costs (including impairments and strategy related costs) as detailed on page 4. The adjusted results are consistent with how business performance is measured internally.

 

Adjusted basic earnings per ordinary share is profit before tax adjusted for amortisation of acquisition related intangible assets and other non-underlying costs described in the financial review. A tax rate of 19% (2018: 19%) has been applied to calculate adjusted profit after tax.

 

Market expectations of Adjusted EBITDA for the 12 months to 31 December 2019 from the analyst consensus on our investor website are in a range of £136.6m to £145.4m, with an average of £141.9m.

Quarter 2 Trading

 

 

Revenue for the three months to 30 June 2019

Revenue for the six months to 30 June 2019

£m

Growth %

£m

Growth %*

Insurance

47.8

4

96.1

3

Money

21.3

(1)

46.5

5

Home Services

14.6

34

34.2

52

 

83.7

7

176.8

10

Other revenue

10.9

57

22.6

67

Total

94.6

11

199.4

15

 

* Revenue growth 4% Q2 and 8% H1 excluding Decision Tech.

§ Good momentum in Insurance and trading in life insurance recovered.

 

§ With fewer strong promotional products, Money switching reduced.

 

§ Energy switching remained very strong due to the combination of attractive offers, the increase in the price cap and the continued optimisation of our site.

 

§ Other revenue includes £5.2m attributable to Decision Tech for the 3 months and £11.4m for the 6 months to 30 June.

 

 

 

 

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 hear the presentation being streamed live, please visit: http://corporate.moneysupermarket.com to register and listen.

 

 

 

 

For further information, contact:

 

Scilla Grimble, Chief Financial Officer      Scilla.Grimble@moneysupermarket.com / 0207 379 5151

 

Jo Britten, Investor Relations Director      Jo.Britten@moneysupermarket.com  / 07896 469380

           

William Clutterbuck, Maitland AMO           wclutterbuck@maitland.co.uk  / 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

 

2019 marks the second year of our Reinvent strategy and the momentum continues in our delivery of the two key strategic pillars: reaccelerating core growth and unlocking new market growth. Growth has accelerated after we chose in 2018 to invest into our product engineering teams, accelerating our optimisation work and successfully integrating Decision Tech into the Group. First half trading performance is encouraging, and we have returned to profit growth. We have also benefitted from some favourable market conditions in the Energy switching market.

 

Reinvent strategy

 

The first pillar of the Reinvent strategy focuses on the optimisation of our customer journeys, making the site easier to use, particularly for anyone accessing our services via a mobile phone. The customer experience optimisation rollout is continuing to deliver conversion gains across key verticals and this underpins our revenue growth in the half.  Later this year, we will be consolidating our Manchester product engineering teams into one permanent office.

 

Our customers have noticed the difference, with our Net Promoter Score now at 73. This ease of use, alongside the existing strengths of our brands, technology platform and provider relationships, makes our business stronger.

 

The second pillar of the Reinvent strategy uses our technology platform to enable us to lead the innovation of price comparison to unlock new market growth:

 

§ Personalised MoneySuperMarket - during 2019, we are making our services more proactive and personalized, driving customer engagement. We launched our new MoneySuperMarket brand proposition, 'Get Money Calm' in March to enable personalised services. This new brand identity was deployed across every customer touchpoint from our website and apps, to our CRM and advertising. Following the trial of the service within an app environment, customers are also now able to access credit monitoring on the web, alongside traditional price comparison that helps them save across a diverse range of products.

§ Taking price comparison to the user - we are tapping into the opportunity to take our products and services to the sites people are already visiting regularly. Last year, we acquired Decision Tech, which has leading B2B price and product comparison capabilities. On a standalone basis this half, Decision Tech's revenue grew c.30% year on year, driven by growth in home communications. Decision Tech offers MoneySuperMarket's wider comparison services to new audiences through B2B partnerships and has a promising new partnerships pipeline.

§ Mortgage price comparison - millions of customers look to us for help with mortgages every year. In 2019, we have continued to enhance our proposition. We have added further eligibility factors to the remortgage journey to help customers understand their options, and we have started to deepen our broker and lender integrations.

 

 

 

 

Financial Review

 

In this second year of Reinvent, we enjoyed encouraging revenue growth across all segments, and we have successfully delivered on our plans. Group revenue increased 15% to £199.4m (2018: £173.7m) and profit after tax increased 18% to £50.2m (2018: £42.5m). When reviewing performance, the Board reviews a number of adjusted measures, including adjusted EBITDA which grew 17% to £72.9m (2018: £62.2m) and adjusted basic EPS which grew 12% to 9.4p (2018: 8.4p). The comparative year in these and the reported figures has not been adjusted for IFRS16.

 

Extract from the Consolidated Statement of Comprehensive Income

for the six months ended 30 June

 

2019

2018*

 

£m

£m

Revenue

199.4

173.7

Cost of sales

(60.7)

(49.3)

Gross profit

138.7

124.4

Distribution expenses

(16.7)

(16.7)

Administrative expenses

(60.6)

(55.7)

Operating profit

61.4

52.0

Depreciation and amortisation of software

9.8

6.1

Amortisation of acquisition related intangible assets

1.2

0.5

EBITDA

72.4

58.6

Reported EPS

9.4p

7.9p

 

*As the Group adopted IFRS 16 - Leases, using the modified retrospective approach, prior year comparative numbers are not restated.  Reported year on year EBITDA growth is higher than would be the case if the comparative numbers were IFRS 16 adjusted. Adjusting for IFRS 16, we expect 2018 adjusted EBITDA to have been £63.3m and adjusted EBITDA growth in 2019 to have been 15%. The guide impact to this is included in "IFRS 16 - Leases" below.

 

Reconciliation to Adjusted EBITDA:

 

EBITDA

72.4

58.6

Strategy related costs:

 

 

         Strategy review and associated reorganisation costs

0.5

2.6

         Deal fees

-

1.0

Adjusted EBITDA

72.9

62.2

Adjusted earnings per ordinary share:

 

 

- basic (p)

9.4

8.4

- diluted (p)

9.4

8.4

 

 

 

 

 

 

 

 

 

 

Revenue

for the six months ended 30 June

 

2019

2018

Growth

 

£m

 

£m

%

Insurance

96.1

 

93.3

3

Money

46.5

44.5

5

Home Services

34.2

 

22.5

52

 

176.8

 

160.3

10

Other revenue

22.6

 

13.4

67

Total

199.4

 

173.7

15

 

During the half Group revenue grew 15%; excluding Decision Tech revenue grew 8%.

 

Insurance growth was solid at 3%. Our motor and home businesses are in good growth, despite the absence of motor premium inflation. This was partially offset by subdued trading in life insurance in the first quarter, as competitors spent more on their customer incentives.

 

Revenue in our Money business grew 5% with robust performance in credit, supported by customer experience optimisation and conversion improvements. The reduction in availability and attractiveness of promotional products diminished switching as we progressed through the half.

 

Revenue in Home Services grew 52%. Following the announcement of the energy price cap rise in January 2019, we saw exceptional growth across our energy business, which accounts for most of the revenue in Home Services. The Group's strengths maximised this opportunity through a combination of leading offers, MoneySavingExpert's editorial strength and further optimisation gains, which resulted in very high levels of switching. Looking ahead, we anticipate the second half to be challenging in this vertical due to the expected decrease in the energy price cap and strong prior year performance.

 

Decision Tech contributed £11.4m to other revenue and we are pleased with the growth within its home communications business. The weak travel market has continued to affect customer bookings for package holidays and car hire, resulting in poor performance in TravelSupermarket.

 

Gross profit and distribution expenses

Gross margins fell from 72% to 70%, with broadly half of this reduction being attributable to the consolidation of Decision Tech as B2B operates on lower margins than B2C. The remainder of the margin reduction was largely driven from the ongoing transition of customers searching for our products on a mobile device. Margin also suffered slightly from the mix impact from the growth in energy on MoneySavingExpert (which provides a cashback offer to customers).

 

As anticipated, the brand relaunch did not significantly impact our marketing spend and so distribution expenses are broadly unchanged year on year.

 

Administrative Expenses

 

Administrative costs (excluding amortisation of acquisition related intangible assets and strategy

related costs) increased by 14% to £58.9m (2018: £51.5m). This £7.4m increase has largely been driven by the acquisition of Decision Tech on 1 August 2018, which has added £4.1m to the cost base in the half, mainly in staff and technology costs.

 

Our technology amortisation costs for the period have increased from £5.6m to £7.5m due to several large technology assets going live in the second half of 2018.


The adoption of IFRS 16 has impacted administrative expenses as anticipated and this is explained further below.

Amortisation of acquisition related intangible assets

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 amortised over a period of 3-10 years with a charge of £0.5m included within the first half of 2019 (2018: £0.5m).

The acquisition of Decision Tech on 1 August 2018 gave rise to £8.7m of intangible assets, which are being amortised over a period of 3 - 10 years. The charge incurred in 2019 is £0.7m (2018: £nil).

Strategy related costs
 

In this second year of Reinvent, the Group has incurred strategy related transitional costs in the period of £0.5m relating to the North West relocation (2018: £3.6m relating to the reorganisation to support our new strategy and fees on the acquisition of Decision Tech). Full year strategy related costs are expected to be up to £2m.

Investment in technology

Capital investment is normalising as we rebalance from capital expenditure to operating costs following the conclusion of our re-platforming. Our technology capital expenditure in the half was £6.6m, with software amortisation costs of £7.6m. For the full year, we expect technology capital investment of £11m and the technology amortisation charge to be in the region of £16m.

IFRS 16 - Leases

The adoption of IFRS 16 has impacted the Consolidated Statement of Comprehensive Income as expected in 2019, reducing operating lease expenditure by £1.3m and instead, reflecting these rental costs through depreciation charges of £1.3m and finance costs of £0.6m. On the balance sheet, adoption of IFRS 16 has meant the recognition of lease assets and liabilities respectively totalling £31.8m and £34.1m in respect of the Group's property leases. As the Group adopted IFRS 16 using the modified retrospective approach, the prior year has not been restated.

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 Board reviews Adjusted EBITDA alongside GAAP measures and adjusted basic EPS when reviewing performance of the Group. This results from moving out of the phase of significant capital investment in our technology platform towards focusing on developing and optimising our product and technology.  Therefore, capital investment and amortisation is less meaningful and so it is appropriate to focus on an adjusted EBITDA measure alongside adjusted basic EPS. Executive management bonus targets also include reference to adjusted EBITDA and similarly, long term incentive schemes are measured in relation to adjusted basic 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.

 

 

Key performance indicators

The Board reviews key performance indicators (KPIs) to assess the performance of the business against the Group's strategy. We measure five key strategic KPIs: estimated customer savings, customer net promoter score, active users, revenue per active user and marketing margin.

 

 

30 June 2019

30 June 2018

Estimated customer savings

£1.0bn

£1.1bn

Net promoter score

73

72

Active users

13.0m

12.9m

Revenue per active user

£16.30

£15.40

Marketing margin

61%

62%

 

 

Estimated customer savings:  This is calculated by multiplying sales volume against the average saving per product for core channels, the balance of the calculation is a company estimation.

 

Net promoter score:              The twelve month rolling average (1 Jul 18 - 30 Jun 19 inclusive) measured by YouGov Brand Index service Recommend Score weighted by revenue for each of our brands (excluding Decision Tech's consumer brands) to create a Group-wide NPS.

 

Active users:                          The number of unique accounts running enquiries in our core seven channels (motor insurance, home insurance, life insurance, travel insurance, credit cards, loans and 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.

 

Marketing margin:                 The inverse relationship between revenue and total marketing spend represented as a percentage.

 

During the first half of 2019, our customers saved £1bn. The decrease on the previous year is attributable to falling motor premiums. Whilst there has been an increase in the number of customers saving from switching their policy, the falling premiums mean that the average saving per customer is lower than it was in 2018.

Trust and satisfaction in our brands is strong and we are pleased with the increase over the last 12 months in our NPS measure.

Active users is a measurement of customers who have made an enquiry in the last 12 months on the MoneySuperMarket website for the core channels: car insurance, home insurance, life insurance, travel insurance, credit cards, loans and energy. This revenue represents over 60% of Group revenue and we expect to increase this as more channels transition into the enterprise data warehouse.  In December 2018, we reported 13 million active users and for the period to June 2018 this was broadly unchanged.

Our work on customer experience optimisation drove an improvement in conversion and the average revenue per active user. This has underpinned our revenue growth. In December 2018, we reported revenue per active user of £15.90 and this has increased to £16.30 as of 30 June 2019.

Marketing costs have been well controlled in the half and so marketing margin fell by 1% to 61%, compared with a 2 percentage point fall in gross margin.

 

 

 

 

Cash

 

The Group continued to enjoy robust cash generation, generating £51.4m of operating cash in the half. During the period we distributed £83.4m (2018: £40.7m) to our shareholders by way of dividend, with the increase on the prior year reflecting the payment of the £40.0m special dividend announced in February.  As at 30 June 2019, the Group had net debt of £(12.6)m (2018: net cash of £24.4m).

 

Dividends

 

The Board has announced an interim dividend of 3.10p, an increase of 5% on the prior year reflecting our progressive dividend policy. The ex-dividend date is 1 August 2019, with a payment date of 13 September 2019.  Shareholders have the opportunity to elect to reinvest their cash dividend and purchase existing shares in the Company through a Dividend Reinvestment Plan.

 

Tax

 

The effective tax rate of 16.9% (2018: 19.0%) includes a £1.1m favourable prior year adjustment in respect of 2018. The underlying effective tax rate of 18.8% is in line with the UK statutory rate of 19.0% (2018: 19.0%) 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 six months to 30 June 2019 were 9.4p (2018: 8.4p). Adjusted basic earnings per ordinary share increased from 8.4p to 9.4p per share through the increase in profit. The adjusted earnings per ordinary share is based on profit before tax after adjusting for the amortisation of acquisition related intangible assets, other non-underlying costs (including impairments and strategy related costs) and profit on disposal of associates and investments. The tax rate of 19.0% (2018: 19.0%) has been applied to calculate adjusted profit after tax.

 

 

 

 

Responsibility statement of the directors in respect of the half-yearly financial report

 

We confirm that to the best of our knowledge:

 

·      The condensed set of financial statements has been prepared in accordance with IAS 34 Interim Financial Reporting as adopted by the EU;

·      The interim management report includes a fair review of the information required by:

DTR 4.2.7R of the Disclosure Guidance and Transparency Rules, being an indication of important events that have occurred during the first six months of the financial year and their impact on the condensed set of financial statements; and a description of the principal risks and uncertainties for the remaining six months of the year; and

DTR 4.2.8R of the Disclosure Guidance and Transparency Rules, being related party transactions that have taken place in the first six months of the current financial year and that have materially affected the financial position or performance of the entity during that period; and any changes in the related party transactions described in the last annual report that could do so.

 

 

 

 

Name

Function

Robin Freestone

Chair

Mark Lewis

Chief Executive Officer

Scilla Grimble

Chief Financial Officer

Sally James

Senior Independent Non-Executive Director

Andrew Fisher

Independent Non-Executive Director

Genevieve Shore

Independent Non-Executive Director

Sarah Warby

Independent Non-Executive Director

 

17 July 2019

 

 

Consolidated Statement of Comprehensive Income

for the six months ended 30 June 2019 and 30 June 2018

 

 

 

 

 

30 June

30 June

 

Note

 

 

2019

2018

 

 

 

 

£m

£m

 

 

 

 

 

 

Revenue

3

 

 

199.4

173.7

Cost of sales

 

 

 

(60.7)

(49.3)

 

 

 

 

 

 

Gross profit

 

 

 

138.7

124.4

Distribution expenses

 

 

 

(16.7)

(16.7)

Administrative expenses

 

 

 

(60.6)

(55.7)

 

 

 

 

 

 

Operating profit

 

 

 

61.4

52.0

 

 

 

 

 

 

Finance income

 

 

 

0.1

0.1

Finance costs

 

 

 

(1.0)

(0.4)

 

 

 

 

 

 

Net finance costs

 

 

 

(0.9)

(0.3)

 

 

 

 

 

 

Share of loss of joint venture

 

 

 

(0.1)

-

 

 

 

 

 

 

Profit before tax

 

 

 

60.4

51.7

Taxation

4

 

 

(10.2)

(9.2)

 

 

 

 

 

 

Profit for the period

 

 

 

50.2

42.5

 

 

 

 

 

 

 

 

 

 

 

 

Other comprehensive income

 

 

 

2.0

-

Total comprehensive income for the period

 

 

 

52.2

42.5

 

 

 

 

 

 

Earnings per share:

 

 

 

 

 

Basic earnings per ordinary share (pence)

Diluted earnings per ordinary share (pence)

5

5

 

 

9.4

7.9

7.9

9.3

Consolidated Statement of Financial Position

as at 30 June 2019, 31 December 2018 and 30 June 2018

 

 

 

30 June

31 December

30 June

 

Note

2019

2018

2018

 

 

£m

£m

£m

Assets

 

 

 

 

Non-current assets

 

 

 

 

Property, plant and equipment

 

45.8

13.8

14.0

Intangible assets

7

181.4

183.7

145.3

Investments

 

5.9

1.7

0.7

Total non-current assets

 

233.1

199.2

160.0

 

 

 

 

 

Current assets

 

 

 

 

Trade and other receivables

 

53.8

43.1

48.9

Prepayments

 

8.0

6.5

6.6

Cash and cash equivalents

 

12.4

44.8

24.4

Total current assets

 

74.2

94.4

79.9

Total assets

 

307.3

293.6

239.9

 

 

 

 

 

Liabilities

 

 

 

 

Non-current liabilities

 

 

 

 

Other payables

 

33.4

4.7

-

Deferred tax liabilities

 

10.3

10.1

8.8

Total non-current liabilities

 

43.7

14.8

8.8

 

 

 

 

 

Current liabilities

 

 

 

 

Trade and other payables

 

60.7

54.9

52.9

Current tax liabilities

 

8.1

8.4

7.4

Borrowings

 

25.0

15.0

-

Total current liabilities

 

93.8

78.3

60.3

Total liabilities

 

137.5

93.1

69.1

 

 

 

 

 

Equity

 

 

 

 

Share capital

 

0.1

0.1

0.1

Share premium

 

204.3

204.0

203.3

Reserve for own shares

 

(3.1)

(2.6)

(2.3)

Retained earnings

 

(90.2)

(59.7)

(89.0)

Other reserves

 

58.7

58.7

58.7

Total equity

 

169.8

200.5

170.8

Total equity and liabilities

 

307.3

293.6

239.9

 

 

 

 

 

 

Consolidated Statement of Changes in Equity

for the period ended 30 June 2019, 31 December 2018 and 30 June 2018

 

 

Issued share capital

Share premium

Other reserves

Retained earnings

Reserve for own shares

Total

 

£m

£m

£m

£m

£m

£m

 

 

 

 

 

 

 

At 1 January 2018

0.1

203.3

58.7

(88.5)

(3.6)

170.1

Profit for the period

-

-

-

42.5

-

42.5

Total income and expense for the period

-

-

-

42.5

-

42.5

Purchase of shares by employee trusts

-

-

-

-

(0.5)

(0.5)

Exercise of LTIP awards

-

-

-

(1.7)

1.7

-

Distribution in relation to LTIP

-

-

-

(0.2)

-

(0.2)

Equity dividends paid

-

-

-

(40.7)

-

(40.7)

Share-based payments

-

-

-

(0.3)

-

(0.3)

At 30 June 2018

0.1

203.3

58.7

(89.0)

(2.3)

170.8

 

 

 

 

 

 

 

 

 

 

 

 

 

 

At 1 July 2018

0.1

203.3

58.7

(89.0)

(2.3)

170.8

Profit for the period

-

-

-

44.0

-

44.0

Total income and expense for the period

 

 

 

44.0

 

44.0

Purchase of shares by employee trusts

-

-

-

-

(0.3)

0.1

Exercise of LTIP awards

-

-

-

(0.1)

0.1

-

New shares issued

-

0.7

-

-

-

0.3

Distribution in relation to LTIP

-

-

-

0.1

-

0.1

Equity dividends paid

-

-

-

(15.8)

-

(15.8)

Share-based payments

-

-

-

1.1

-

1.1

At 31 December 2018

0.1

204.0

58.7

(59.7)

(2.6)

200.5

 

 

 

 

 

 

 

 

 

 

 

 

 

 

At 1 January 2019

0.1

204.0

58.7

(59.7)

(2.6)

200.5

Profit for the period

-

-

-

50.2

-

50.2

Other comprehensive income

-

-

-

2.0

-

2.0

Total income and expense for the period

-

-

-

52.2

-

52.2

Purchase of shares by employee trusts

-

-

-

-

(0.5)

(0.5)

New shares issued

-

0.3

-

-

-

0.3

Equity dividends paid

-

-

-

(83.4)

-

(83.4)

Share-based payments

-

-

-

0.7

-

0.7

At 30 June 2019

0.1

204.3

58.7

(90.2)

(3.1)

169.8

 

 

 

 

 

 

 

Consolidated Statement of Cash Flows

for the six months ended 30 June 2019 and 30 June 2018

 

 

 

 

 

6 months to

6 months to

 

 

 

 

30 June

30 June

 

 

 

 

2019

2018

Operating activities

 

 

 

£m

£m

Profit for the period

 

 

 

50.2

42.5

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

 

 

 

 

 

  Depreciation of property, plant and equipment

 

 

 

2.2

0.5

  Amortisation of intangible assets

 

 

 

8.8

6.1

  Share of loss of joint venture

 

 

 

0.1

-

  Net finance costs

 

 

 

0.9

0.3

  Equity settled share-based payment transactions

 

 

 

0.7

(0.3)

  Tax charge

 

 

 

10.2

9.2

  Changes in trade and other receivables

 

 

 

(12.2)

(12.9)

  Changes in trade and other payables

 

 

 

1.0

6.2

  Tax paid

 

 

 

(10.5)

(8.6)

Net cash flow from operating activities

 

 

 

51.4

43.0

Investing activities

 

 

 

 

 

Interest received

 

 

 

0.1

0.2

Acquisition of investments

 

 

 

(2.3)

(0.3)

Acquisition of property, plant and equipment

 

 

 

(1.5)

(5.8)

Acquisition of intangible assets

 

 

 

(6.3)

(6.4)

Net cash used in investing activities

 

 

 

(10.0)

(12.3)

 

 

 

 

 

 

Financing activities

 

 

 

 

 

Dividends paid

 

 

 

(83.4)

(40.7)

Proceeds from issue of shares

 

 

 

0.3

-

Distribution in relation to Long Term Incentive Plan

 

 

 

-

(0.2)

Share purchases by employee trusts

 

 

 

(0.5)

(0.5)

Proceeds from borrowings

 

 

 

40.0

20.0

Repayment of borrowings

 

 

 

(30.0)

(20.0)

Interest paid

 

 

 

(0.2)

-

Net cash used in financing activities

 

 

 

(73.8)

(41.4)

 

 

 

 

 

 

Net decrease in cash and cash equivalents

 

 

 

(32.4)

(10.7)

Cash and cash equivalents at 1 January

 

 

 

44.8

35.1

Cash and cash equivalents at 30 June

 

 

 

12.4

24.4

             

Notes

 

1    Basis of preparation

Moneysupermarket.com Group plc (the Company) is a public limited company registered and domiciled in England and Wales and listed on the London Stock Exchange.

The Financial Statements are prepared on the historical cost basis. Comparative figures presented in the Financial Statements represent the six months ending 30 June 2018.

The Group has adopted IFRS 16 using the modified retrospective approach, the prior year has not been restated. With the exception of IFRS 16, the Financial Statements have been prepared on the same basis as those for the year ended 31 December 2018.

Statement of compliance

The condensed consolidated financial statements have been prepared in accordance with International Financial Reporting Standard (IFRS) IAS 34 'Interim Financial Reporting' as adopted by the European Union (EU). As required by the Disclosure and Transparency Rules of the Financial Services Authority, the condensed consolidated set of financial statements has been prepared applying the accounting policies and presentation that were applied in the preparation of the Group's published consolidated financial statements for the year ended 31 December 2018 with the exception of IFRS 16, as further described and explained below. They do not include all of the information required for full annual financial statements, and should be read in conjunction with the consolidated financial statements of the Group for the year ended 31 December 2018.

The principal risks and uncertainties for the remaining six months of the year remain unchanged from those disclosed in the financial statements for the year ended 31 December 2018.

The half year financial information is presented in Sterling and all values are rounded to the nearest million pounds (£m) except where otherwise indicated.

Going concern

After making enquires, the Directors have a reasonable expectation that the Company and the Group have adequate resources to continue in operational existence for the foreseeable future. Accordingly they continue to adopt the going concern basis in preparing the condensed consolidated financial statements.

2    Accounting estimates and judgement

The preparation of half year financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results may differ from these estimates.

The significant judgements made by management in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those applied to the consolidated financial statements as at and for the year ended 31 December 2018.

 

 

 

 

 

 

3    Segmental information

 

 

 

2019

 

2018

 

 

£m

 

£m

Segment revenue

 

 

 

 

Insure

96.1

 

93.3

 

Money

46.5

 

44.5

 

Home Services

34.2

 

22.5

 

 

176.8

 

160.3

 

Other revenue

22.6

 

13.4

 

Total

 

199.4

 

173.7

Operating expenses

 

(138.0)

 

(121.7)

Operating profit

 

61.4

 

52.0

Net finance costs

 

(0.9)

 

(0.3)

Share of loss of joint venture

 

(0.1)

 

-

Profit before tax

 

60.4

 

51.7

Taxation

 

(10.2)

 

(9.2)

Profit for the year

 

50.2

 

42.5

 

 

 

 

 

 

 

 

 

 

In applying IFRS 8 - Operating Segments, the Group discloses three reportable segments.

 

4    Taxation

The effective tax rate of 16.9% (2018: 19.0%) includes a £1.1m favourable prior year adjustment in respect of 2018. The underlying effective tax rate of 18.8% is in line with the UK statutory rate of 19.0% (2018: 19.0%) and the Group expects the underlying effective rate of tax to continue to approximate to the standard UK corporation tax rate.

 

5    Earnings per share

Basic and diluted earnings per share have been calculated as follows.

 

 

 

 

2019

2018

Profit after taxation attributable to ordinary shareholders (£m)

50.2

42.5

 

 

 

Basic weighted average ordinary shares in issue (millions)

536.3

536.0

Dilutive effect of share based instruments (millions)

0.8

1.0

 

 

 

Diluted weighted average ordinary shares in issue (millions)

537.1

537.0

 

 

 

Basic earnings per ordinary share (pence)

9.4

7.9

 

 

 

Diluted earnings per ordinary share (pence)

9.3

7.9

 

 

 

Adjusted basic and diluted earnings per share have been calculated as follows:-

 

£m

£m

Profit before tax

60.4

51.7

Amortisation of acquisition related intangible assets

1.2

0.5

Strategy related one-off costs

0.5

3.6

Profit on disposal of associate and investment

-

-

 

62.1

55.9

Estimated taxation at 19.00% (2018: 19.00%)

(11.8)

(10.6)

 

 

 

Profit for Adjusted EPS purposes

50.3

45.3

 

 

 

Basic Adjusted Earnings per share (pence)

9.4

8.4

 

 

 

Diluted Adjusted Earnings per share (pence)

9.4

8.4

       

 

 

6    Dividends

 

 

2019

2018

 

 

£m

£m

Equity dividends on ordinary shares:

 

 

 

 

 

 

 

Final dividend for 2018: 8.10 pence per share

(2017: 7.60 pence per share)

 

43.4

40.7

Special dividend for 2018: 7.46 pence per share

(2017: Nil)

 

40.0

-

 

 

 

83.4

 

40.7

 

 

 

 

Proposed for approval (not recognised as a liability as at 30 June):

 

 

 

Interim dividend for 2019: 3.10 pence per share

(2018: 2.95 pence per share)

 

16.6

15.8

 

 

 

 

 

 

 

 

7    Intangible fixed assets

 

 

Market related

Customer relationships

Customer lists

 

Technology related

Goodwill

Total

 

 

£m

£m

£m

£m

£m

£m

Cost

 

 

 

 

 

 

 

At 1 January 2018

 

148.7

69.3

2.3

83.0

181.9

485.2

Additions

 

-

-

-

6.8

-

6.8

 

 

 

 

 

 

 

 

At 30 June 2018

 

148.7

69.3

2.3

89.8

181.9

492.0

 

 

 

 

 

 

 

 

Amortisation

 

 

 

 

 

 

 

At 1 January 2018

 

143.8

69.3

2.3

50.9

74.3

340.6

Charged in period

 

0.5

-

-

5.6

-

6.1

 

 

 

 

 

 

 

 

At 30 June 2018

 

144.3

69.3

2.3

56.5

74.3

346.7

 

 

 

 

 

 

 

 

Net book value

 

 

 

 

 

 

 

At 1 January 2018

 

4.9

-

-

32.1

107.6

144.6

At 30 June 2018

 

4.4

-

-

33.3

107.6

145.3

 

 

 

 

 

 

 

 

Cost

 

 

 

 

 

 

 

At 1 January 2019

 

155.3

69.3

2.3

98.1

212.6

537.6

Additions

 

-

-

-

6.3

-

6.3

 

 

 

 

 

 

 

 

At 30 June 2019

 

155.3

69.3

2.3

104.4

212.6

543.9

 

 

 

 

 

 

 

 

Amortisation

 

 

 

 

 

 

 

At 1 January 2019

 

145.1

69.3

2.3

62.9

74.3

353.9

Charged in period

 

0.8

-

-

7.9

-

8.7

 

 

 

 

 

 

 

 

At 30 June 2019

 

145.9

69.3

2.3

70.7

74.3

362.5

 

 

 

 

 

 

 

 

Net book value

 

 

 

 

 

 

 

At 1 January 2019

 

10.2

-

-

35.2

138.3

183.7

At 30 June 2019

 

9.4

-

-

33.7

138.3

181.4

 

 

 

 

 

 

 

 

                 

 

 

8    Share-based payments

 

On 28 March 2019, conditional awards were granted over 1,482,924 shares to a number of employees under the Long Term Incentive Plan scheme.

 

The share option charge in the Statement of Comprehensive Income can be attributed to the following types of option:

 

 

2019

2018

 

£m

£m

 

 

 

Long Term Incentive Plan (LTIP) and Restricted Share Award (RSA)

0.5

(0.4)

Sharesave scheme

0.2

0.1

 

 

 

 

0.7

(0.3)

 

 

 

 

 

 

 

 

 

 

The following table indicates the changes in the number of share options during the period. Number of awards in the table represents the number awarded.

 

 

LTIP/RSA

At 1 January 2018

3,473,603

Options issued during the period

1,882,181

Options exercised during the period

(613,906)

Options forfeited during the period

(362,479)

 

 

At 30 June 2018

4,379,399

 

 

At 1 July 2018

4,379,399

Options issued during the period

186,670

Options exercised during the period

(225,371)

Options forfeited during the period

(646,750)

 

 

At 31 December 2018

3,693,948

 

 

At 1 January 2019

3,693,948

Options issued during the period

1,647,524

Options exercised during the period

-

Options forfeited during the period

(139,158)

 

 

At 30 June 2019

5,202,314

 

 

 

9    IFRS 16 - Leases

The adoption of IFRS 16 has impacted the Consolidated Statement of Comprehensive Income as expected in 2019, reducing operating lease expenditure by £1.3m and instead reflecting these rental costs through depreciation charges of £1.3m and finance costs of £0.6m. On the balance sheet, adoption of IFRS 16 has meant the recognition of right of use lease assets and lease liabilities respectively totalling £31.8m and £34.1m in respect of the Group's property leases. As the Group adopted IFRS 16 using the modified retrospective approach, the prior year has not been restated.

 

 

10   Related party transactions

The Company is the ultimate parent entity of the Group. Intercompany transactions with wholly owned subsidiaries have been excluded from this note, as per the exemption offered in IAS 24.

During the period, other than the items referred to below there were no transactions, and at the period end there were no outstanding balances, relating to key management personnel and entities over which they have control or significant influence, other than the Long Term Incentive Plan awards noted in the table above.

On 30 April 2019, the 2016 Long Term Incentive Plan lapsed in full as the performance criteria were not met. On 14 February 2019, 164,600 conditional awards were granted in relation to an Executive share option scheme. On 28 March 2019, under the 2019 Long Term Incentive Plan, conditional awards were granted over 1,482,924 shares. 

 

 

 

 

 

 

11   Commitments and contingencies

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 due to errors in operating procedures or technology which result in incorrect or incomplete product or customer data being transferred to or from providers. These issues can in some instances lead to customer detriment, dispute and potentially cash outflows. During the current year there have been no material issues reported and those relating to earlier years have been substantially resolved. 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.

 

 

12   Post balance sheet events

There are no significant post balance sheet events.

 

INDEPENDENT REVIEW REPORT TO MONEYSUPERMARKET.COM GROUP PLC 

Conclusion 

We have been engaged by the company to review the condensed set of financial statements in the half-yearly financial report for the six months ended 30 June 2019 which comprises the Consolidated Statement of Comprehensive Income, the Consolidated Statement of Financial Position, the Consolidated Statement of Changes in Equity, the Consolidated Statement of Cash Flows and the related explanatory notes. 

Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 30 June 2019 is not prepared, in all material respects, in accordance with IAS 34 Interim Financial Reporting as adopted by the EU and the Disclosure Guidance and Transparency Rules ("the DTR") of the UK's Financial Conduct Authority ("the UK FCA").   

Scope of review 

We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410 Review of Interim Financial Information Performed by the Independent Auditor of the Entity issued by the Auditing Practices Board for use in the UK.  A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures.  We read the other information contained in the half-yearly financial report and consider whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements. 

A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit.  Accordingly, we do not express an audit opinion.  

Directors' responsibilities 

The half-yearly financial report is the responsibility of, and has been approved by, the directors.  The directors are responsible for preparing the half-yearly financial report in accordance with the DTR of the UK FCA. 

As disclosed in the notes, the annual financial statements of the group are prepared in accordance with International Financial Reporting Standards as adopted by the EU.  The directors are responsible for preparing the condensed set of financial statements included in the half-yearly financial report in accordance with IAS 34 as adopted by the EU. 

Our responsibility 

Our responsibility is to express to the company a conclusion on the condensed set of financial statements in the half-yearly financial report based on our review. 

The purpose of our review work and to whom we owe our responsibilities

This report is made solely to the company in accordance with the terms of our engagement to assist the company in meeting the requirements of the DTR of the UK FCA.  Our review has been undertaken so that we might state to the company those matters we are required to state to it in this report and for no other purpose.  To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company for our review work, for this report, or for the conclusions we have reached. 

 

 

 

Stuart Crisp

for and on behalf of KPMG LLP 

Chartered Accountants 

15 Canada Square

London

E14 5GL

 

17 July 2019
 

Appendix

 

Statutory Information

 

The financial information set out above does not constitute the Company's statutory accounts for the six months ended 30 June 2019 or 30 June 2018 but is derived from those accounts. Statutory accounts for 2018 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 General Meeting took place on 9 May 2019.  The interim dividend will be payable on 13 September 2019 to shareholders on the register at the close of business 2 August 2019.

 

 

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 news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
 
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