Moneysupermarket revenues fall as electricity supply switching drops and tighter lending rules at banks hit its finance wing
- Nineteen per cent fewer households changed their energy provider last month
- Revenues over the first nine months of this year fell by 11% to £268.4million
- Quarantine rules have severely impacted the company’s travel segment
Moneysupermarket.com said a downturn in its home services business and continued stricter bank lending criteria has caused revenues to fall considerably for a second successive quarter.
The comparison website blamed the lower energy price cap and a rise in wholesale energy costs for impacting its performance because the subsequently reduced savings levels caused fewer customers to change energy suppliers.
Despite growing in July, revenues at the group’s home services division tumbled by 13 per cent to £15.5million in the three months to September 30, compared to a 27 per cent increase in the previous quarter.
Earnings at its Money division plummeted by 40 per cent as lenders imposed tougher credit scoring rules and the supply of bank products fell in response to the coronavirus pandemic
The new results come a few days after the trade body Energy UK revealed that the number of households who switched their electricity provider in September was 19 per cent below last year’s levels.
Earnings at its Money division plummeted by 40 per cent, however, as lenders imposed tougher credit scoring rules and the supply of bank products fell in response to the coronavirus pandemic.
Shares in the Welsh firm dived 9.7 per cent to 241.2p near the end of trading after it reported quarterly revenue declines in all four of its channels, with Insurance and ‘Other’ revenues falling 8 per cent and 9 per cent respectively.
Cooler revenues: The trade body Energy UK revealed that the number of households who changed their electricity provider in September was 19 per cent below last year’s levels
Total revenues were 16 per cent lower than the same quarter last year while over the first nine months of 2020, they were also down 11 per cent at £268.4million.
It said its motor insurance and decision technology segments performed relatively well though thanks to B2B broadband doing ‘particularly well.’
But its travel wing remains significantly depressed as a consequence of travel curbs that have caused flights, train journeys, holidays and business excursions to plunge.
Estimates released by the International Air Transport Association trade body in August predicted that the UK would see 165 million fewer passengers travelling by plane this year
Estimates released by the International Air Transport Association trade body in August predicted that the UK would see 165 million fewer passengers travelling by plane this year.
Chief executive Peter Duffy, who joined the website from takeaway giant Just Eat last month, remarked: ‘Our markets continue to be impacted by COVID-19, which is affecting our current performance.
‘However, the group benefits from strong brands and high levels of cash conversion, so we are well-positioned to weather this period of economic uncertainty and deliver future growth.’
Peter Duffy’s former company Just Eat has gone from strength to strength in 2020 as online takeaway orders have boomed, partly due to restrictions on hospitality businesses
The former banker was declared Moneysupermarket.com’s new boss in May, replacing Mark Lewis who held the role for three years. Before his appointment at Just Eat, he also had high-profile jobs at EasyJet and Audi UK.
Since that announcement, the group has reported a slide in first-half revenues and profits following the implementation of lockdown measures in the second quarter negatively affected them.
By contrast, Just Eat has gone from strength to strength as restrictions on hospitality firms caused more people to purchase takeaways online and eat less often in restaurants, pubs and bars.
Global orders made at its parent organisation shot up by 110 million to above 400 million from January to late September. In the last quarter, orders in Canada nearly doubled while they grew by just under half in Germany.
Russ Mould, an investment analyst at AJ Bell, wrote: ‘As an entirely online business Moneysupermarket should in theory be resilient to Covid-19, but the impact the pandemic is having on its end markets is translating into a weaker outlook for the comparison site.’
He added: ”Moneysupermarket operates in a highly competitive market with limited barriers to entry, though the company does compare favourably to its rivals thanks to its brand strength, investment in technology including in areas like automated switching, and a strong balance sheet.