Canaccord lifts Moneysupermarket target price after full year results

Moneysupermarket.com was given a boost on Tuesday as Canaccord Genuity lifted its target price to 352p from 342p and left its rating at ‘hold’ after the company reported a rise in full year profit and revenue.

For the year to the end of December, the price comparison service said statutory profit after tax grew 20% to £63.4m as revenue pushed up 14% to £281.7m.

Moneysupermarket pointed to particularly strong growth in the Money and Home Services businesses, while growth in Insurance was lower as a result of strong second half comparatives in the previous year and tougher competition.

Adjusted earnings per share came in at 14.5p from 12.3p the previous year and the group said it will pay a final dividend of 6.6p per share, taking the total dividend for the year to 9.15p from 8p in 2014.

The company said it remained confident of delivering its expectations for the year. The company traded solidly to the end of February, delivering 12% growth, although insurance revenue was down 4% and travel is deteriorating.

“Nonetheless, given continued strong growth in Money, which accounts for 27% of group revenues and rising, we are nudging up our forecasts, with EBITA up from £103.9m to £105.1m,” said Investec analyst Simon Davies.

“This drives a 1% uplift in EPS from 15.0p to 15.1p.”

The analyst said there was definite scope for further cash returns as Moneysupermarket.com remains committed to a progressive dividend policy and ongoing monitoring of the appropriate capital structure.

The increase in the target price represents a 15.0x full year 2017 enterprise value/EBITDA, and 21.2x cash adjusted price earnings ratio.

Shares rose 2.37% to 346.20p at 1315 GMT.