Moneysupermarket interim profit up 5%, to launch new mortgage business

Price comparison website Moneysupermarket posted a rise in interim profit and revenue on Thursday as it announced plans for a new mortgage business.

In the six months to 30 June, profit after tax and revenue rose 5% to £42.5m and £173.7m, respectively, while basic earnings per share were up 7% to 7.9p. Revenues were driven by increased energy switching in the period and a solid performance in the insurance business.

Revenue in the insurance business was up 4% to £93.3m, while revenue in the money division was 2% higher at £44.5m and home services saw revenue grow 23% to £22.5m.

The company declared an interim dividend of 2.95p per share, up 4% from the same period a year ago, and said cash generation remains strong, with £43m of operating cash during the period and net cash of £24m.

The group also said it it has joined forces with the founders of HD Decisions to launch a new mortgage business.

Chief executive officer Mark Lewis said: "Our trading is on track and our Reinvent strategy to help people save more money across more household bills, is moving ahead. In particular, our expanding product engineering hub is making it easier for customers to switch.

"We all know finding a better mortgage is complicated. We said we would do something about this and today we announce Podium, a new mortgage fintech, to build a comparison tool to bring customers the digitisation of mortgages - an easier and better way to arrange the mortgage that suits them."

Russ Mould, investment director at AJ Bell, said the excitement around Moneysupermarket may have less to do with the publication of its first half results and more to do with the announcement of a new mortgage fintech joint venture.

"This venture is aimed at developing a mortgage comparison tool. In the longer term the mortgage market, which the company argues is ‘ripe for disruption’, could provide a material avenue for growth.

"Podium is one of several initiatives the company is working on under its Reinvent strategy, which includes a new app and the provision of price comparison services on third party sites. In the interim, the business remains solid with revenue up 5% and operating profit up 7%. A more modest 4% increase in the dividend may reflect the investments the Moneysupermarket is making in the business."

At 0925 BST, the shares were up 6.9% to 330.50p.