Moneysupermarket share price sinks as it warns of money segment weakness
Moneysupermarket’s share price dropped 10 per cent today as product availability problems hampered one of its core businesses.
The comparison website’s money division shrank five per cent to £20.6m for the three months to the end of September, the comparison site said in a trading update.
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It blamed “continuing challenges in product availability” for the drop in sales in its second biggest division.
Revenue still rose four per cent year on year to £100.9m as its insurance market hit almost £50m in sales, up three per cent compared to this time last year.
“Insurance grew in a subdued premium environment despite some volatility in our natural search rankings,” Moneysupermarket said.
Customers switching energy supplier to save on bills in the face of Ofgem’s new price cap also helped home services revenue rise 21 per cent to £17.7m.
“The group continued to grow in the quarter, with strong trading in energy showing that there are still big savings to be made by customers even though the price cap is lower,” chief executive Mark Lewis said.
“Our Reinvent strategy continues to do more for our customers – the new Moneysupermarket Energy Monitor service means our customers need never overpay for energy ever again.”
Still, investors sent Moneysupermarket’s share price down 11.5 per cent to 342.7p in early trading to lead the FTSE 350 fallers, after it warned its money division’s weakness will continue all year.
Broker Liberum also warned that the insurance market “is still affected by the difficult premium environment”.
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“While the board is confident in meeting full year expectations, they have flagged that the money segment is expected to weaken for the remainder of the year,” Liberum added.
It kept its recommendation to hold the stock with a target price of 350p.
Moneysupermarket has maintained its full-year guidance.
Main image credit: Moneysupermarket