GOCO.L Share News (GOCO)

(Sharecast News) - Insurance specialist GoCo Group posted a slide in profits on Tuesday, dented by challenging market conditions and heavy investment in new products.

The owner of the GoCompare price comparison website said revenues for the year to 31 December were £152.4m, compared to £152.6m a year earlier, while operating profits slumped 46% to £20.3m. Basic earnings per share came in at 3.0p, 54% lower year-on-year.

The company reported a 4.5% decline in savings made by customers, to £980m, while customer interactions were down 3.3% at 26.6m. Average GoCompare revenue per interaction was off 1.9% at £4.96.

GoCo said "The first half of 2019 saw a continuation of the challenging market conditions in price comparison experienced during 2018, with falling car insurance premiums reducing the number of consumers switching their car insurance provider.

"Market conditions improved in the second half of the year, and the group launched a new car insurance proposition - free £250 excess - which has contributed to a return to modest underlying growth in revenue in this vertical in the fourth quarter."

Profits, meanwhile, were hit by GoCo's investment in AutoSave, a tool which automatically switches customers to better deals.

The investment is part of a wider strategy that has seen GoCo change its name from Go Compare as broadens the services it offers. The company acquired Look After My Bills in July, a site which automatically switches consumers, while AutoSave now has more than 300,000 customers. The company said revenue at AutoSave was £7.0m, compared to £0.0m a year previously.

Peter Wood, chairman, said: "The group's transformational journey has gathered significant momentum this year. 2019 represented a year of disciplined performance in the core business, efficient market and continuing improvements to conversion, alongside the strategic deployment of capital to grow our AutoSave segment."

Looking forward, the company said it remained confident of meeting expectations for 2020, "with performance skewed towards the second half of the year".

Shares in GoCo were trading 5% lower at 76.86p by 1400 GMT.