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(Alliance News) - Moneysupermarket.com Group PLC said Tuesday its revenue in the third quarter slipped but it continued to see strong gross margins.
Separately, Moneysupermarket said it has acquired UK cashback business Maple Syrup Media Ltd, trading as Quidco, from Maple Syrup Group Ltd for up to GBP101 million, with GBP87 million in cash initially and a further GBP14 million in deferred payments.
Shares in the Chester-based price comparison website were 7.8% higher in London on Tuesday morning at 218.80 pence each.
Revenue in the three months to September 30 dropped 10% on a year before to GBP76.4 million. Insurance revenue fell 10% to GBP41.3 million, while Home Services slumped 46% to GBP13.9 million. This was partially offset by 58% growth in the Money division to GBP19.7 million and 29% growth in Travel to GBP1.5 million.
Chief Executive Peter Duffy said: "We have continued to make improvements in our business, building towards a leading data, marketing and technology platform. We maintained our strong margin performance and good cash conversion despite the very tough energy market. We are encouraged by the performance of Money and the early signs of Travel recovery following changes to travel restrictions."
As a result, Moneysupermarket said it delivered a "slightly higher quantum" of gross profit than in third quarter of 2020.
Looking ahead, the price comparison website said it expects full-year earnings before interest, tax, depreciation and amortization in line with current market expectations.
"We do not anticipate energy market conditions will improve this year and therefore expect that switching will be negligible in the fourth quarter," it warned.
Moneysupermarket noted its energy switching services accounted for 16% of group revenue in the fourth quarter last year.
Turning to its Quidco deal, Duffy said: "Moneysupermarket Group exists to help households save money. Today we've added a broad and compelling cashback offer. We welcome Quidco: a profitable, successful business, with strong consumer engagement and high growth potential."
The GBP87.2 million up-front payment will be funded from its existing revolving credit facility, cash, and a new GBP50 million amortising term loan that matures in October 2024.
Quidco is the second largest cashback business in the UK, Moneysupermarket said, with around one million transacting users. It offers cashback at around 4,500 merchants including retail, travel and switching services. Cashback is a cash refund offered to consumers when making purchases; it is a sales incentive that avoids direct price discounting.
Moneysupermarket expects the deal to be earnings accretive in 2022. Quidco delivered revenue of GBP59.2 million for the year ending 31 July 2021, with adjusted Ebitda growing "significantly" year on year to GBP7.9 million.
"We have experience of bringing complementary businesses into the group and helping them thrive while sharing their capabilities more widely. Our growing stable of well-known and trusted consumer brands will provide households with an even more compelling savings offer. We look forward to working with Quidco to deliver this," Duffy added.
By Paul McGowan; paulmcgowan@alliancenews.com
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