Bill hikes boost Moneysupermarket

Price comparison website Moneysupermarket.com saw earnings leap 26% higher last year thanks to a surge in the number of households switching energy providers after the recent round of bill hikes.

A rise in energy switching helped Moneysupermarket.com offset a slowdown in savings and insurance business last year.
A rise in energy switching helped Moneysupermarket.com offset a slowdown in savings and insurance business last year.

Revenues from energy switching trebled in the last three months of the year as the "big six" gas and electricity providers hiked tariffs, prompting consumers to shop around for the best deals.

The group said strong revenues from energy switching and its travel arm offset a slower year for savings revenues, which fell 9% after the state-run Funding for Lending scheme offering banks cheap finance to boost mortgage lending hit deposit rates in the market.

Insurance business also slowed in the second half of the year due largely to changes made by search engine Google, which it said "penalised" the group.

But overall underlying earnings rose to £84 million, up from £66.5 million in 2012, helped also by the first full year of ownership of MoneySavingExpert.com (MSE), bought in September 2012.

It said MSE contributed £6.1 million to group revenues and £13.3 million to underlying earnings last year.

Peter Plumb, chief executive of Moneysupermarket.com, said: "We invested across the business last year and it paid off nicely."

He added: "We won't stand still - we'll build on our innovation in 2013 by doubling our capital investment for 2014, and bringing market leading services in Travel and Insurance to customers' mobiles and desktops."

Energy switching helped its home services division notch up a 93% jump in revenues last year to £22 million, helped also by the launch early last year of MSE's Cheap Energy Club service, which now has more than a million members.

Sales also rose sharply in the group's travel business, where revenues lifted 35%.

Its insurance service saw revenues rise 6%, but the increase was limited after it was hit by Google's changes to ''natural search algorithms'' - pushing its website down the rankings in searches.

Moneysupermarket added that group trading had been "satisfactory" in the first two months of 2014, although "mid single digits" revenue growth suggests a sharp slowdown in sales.

Jonathan Helliwell, analyst at Edison Investment Research, described the results as "very solid" but said that the outlook for 2014 was mixed.