Moneysupermarket.Com Regulatory News (MONY)

30 July 2015

Moneysupermarket.com Group PLC interim results for the six months to 30 June 2015

Moneysupermarket.com Group PLC ("Group" or the "Company"), the UK's leading price comparison website, announces its interim results for the six months to 30 June 2015.

*Adjusted operating profit represents Operating profit adjusted for the amortisation of acquisition-related intangible assets and the contingent payable in relation to the acquisition of MoneySavingExpert.com.

§ Insurance revenues up 8% with car insurance premiums starting to show a marginal increase.

§ Money revenues up 20% due to strong credit card and current account offerings.

§ Home services revenues up 93% driven by energy collective switches.

§ MoneySavingExpert.com revenues up 30% with great customer content supported by a more mobile responsive website.

§ Capital investment of £8m in technology, part of a three-year investment programme.

Peter Plumb, Moneysupermarket.com Chief Executive Officer, said:

''We helped 3 million families save on their household bills in the first six months of 2015. Revenues grew 18% while we put more into tech investment to make MoneySuperMarket and TravelSupermarket the easiest way for families to make their money go further."

Outlook

The first three weeks of July traded in line with the second quarter.

Taking into account the good first half trading, the tougher comparative sales in the second half, and the phasing of some marketing costs into the second half, the board sees prospects for the full year to be modestly ahead of its previous expectations.

Results presentation

There will be a presentation for investors and analysts at UBS, 1 Finsbury Avenue, London, EC2M 2PP at 9.30am this morning. The presentation will be streamed live. Visit: http://corporate.moneysupermarket.com/ to register and listen.

For further information, contact:

Matthew Price, Chief Financial Officer

Tel: 0207 379 5151

William Clutterbuck, Maitland

Tel: 0207 379 5151

Financial and Business Review

The Group presents below an extract of the Consolidated Statement of Comprehensive Income for the six months ended 30 June 2015 and 30 June 2014 along with a reconciliation to adjusted operating profit. The Directors believe that the presentation of the adjusted operating profit measure allows users of the financial information to gain a better understanding of the underlying performance of the business.

Extract of Consolidated Statement of Comprehensive Income

for the six months ended 30 June 2015

Basis of Preparation

The results show the trading results for the six months ended 30 June 2015 and 30 June 2014. The following adjustments

have been made in arriving at adjusted operating profit:

1 Amortisation of acquisition related Intangible Assets

The acquisition of Moneysupermarket.com Financial Group Limited by the Company prior to Listing gave rise to £207.2m of intangible assets. These will be written off over a period of 3-10 years with a charge of £6.6m expensed in the first half of 2015 (2014: £11.2m). The acquisition of the trade and certain assets of MoneySavingExpert.com and a sole trader business from Martin Lewis (together 'MoneySavingExpert.com') on 21 September 2012 by the Group gave rise to £12.9m of intangible assets. These will be written off over a period of 3-10 years with a charge of £0.8m expensed in the first half of 2015 (2014: £0.9m).

2 Contingent payable in relation to the acquisition of MoneySavingExpert.com

In the first half of 2015 the Group has recognised an administrative expense of £5.0m (2014: £4.0m) relating to deferred remuneration which is linked to continued employment in the Consolidated Statement of Comprehensive Income.

Reference is made in the Overview and Financial Performance sections to adjusted administration expenses, distribution expenses and cost base. These measures represent the costs charged to the Consolidated Statement of Comprehensive Income, less intangible amortisation relating to acquisitions and costs relating to the contingent payable for MoneySavingExpert.com.

During the first half of 2015 the MoneySuperMarket.com business grew revenues by 18%. Growth was strong in the Insurance and Home Services businesses. Insurance premiums have started to increase which encourages switching. Revenues in the Money vertical grew primarily from demand for comparing credit cards and current accounts.

TravelSupermarket.com grew its revenues for the half year by 10%. Customer acquisition activity reduced ahead of the launch of its new website.

Revenue in MoneySavingExpert.com was 30% ahead of last year. Growth was driven by credit cards and utilities, which benefited from the success of the collective switches and the energy club.

The Group remains committed to its technology development and invested £8m. This investment, as part of a three-year programme, focuses on three areas - developing our data asset, building a new aggregation engine, and upgrading our customer experience and journey. The investment allows for greater flexibility and scalability across our different channels and any future channels. Customers will find it easier to use our sites and benefit from greater personalisation of services, especially important for consumers on smartphones.

Group gross margins increased from 77.1% to 79.9%. This is a result of increasing the relative importance of direct to site traffic. Direct to site revenues increased from 78% in HY 2014 to 84% in 2015, an outcome of optimising our mobile sites and the increase in customer accounts.

Distribution costs were 4% higher than 2014, primarily due to higher other marketing costs, such as investing in our CRM capability. The Group continued the 'You're So MoneySuperMarket' campaign on television supported by radio and print campaigns.

Adjusted administrative costs increased by 25% from £36.1m to £45.0m in 2015. Adjusted staff costs (including contract resource) were 29% higher at £25.1m, driven by increased headcount and remuneration levels. Other administrative costs increased by £1.9m.

Marketing and Other costs were flattered by £3m of phasing benefits which will reverse over the second half of 2015.

Adjusted Operating Profit margins increased from 32.5% to 35.3% against the same period last year.

Group KPIs

The Directors use key performance indicators ('KPIs') to assess the performance of the business against the Group's strategy. Our strategy is to build on our core business of helping customers to find the right product by investing in our technology, customer data and tools. This enables us to build deeper relationships, and deliver more value to both customers and providers. The three strategic priorities are: be the best site, earn customer loyalty and be the preferred partner for our providers. The KPI's measure our progress against these priorities.

Best site. Be the easiest way for customers to find providers and products.

In the first half of this year we invested £8m in our technology and delivered improvements to the customer journey. We added further MoneySuperMarket channels to the new technology platform, launched the MoreMoney App and integrated OnTrees. This enhances the customer experience by making transactions more intuitive and joined up across the business. TravelSupermarket.com has been rolling out on the new platform, and MoneySavingExpert has a new mobile responsive site. The 5% increase in average monthly unique visitors demonstrates the enhancements in usability as well as success in ensuring the sites offer great ways for customers to save money.

Earn customer loyalty. Be the destination brand for users and customers

We added nearly three million more customer profiles to 'MyProfile' which allows customers to keep their data up to date. This allows us to increasingly personalise services and make it easier for customers to save money with us. Savings made by customers increased by 14% to £0.8BN.

TravelSupermarket.com pioneered a 'better shop' with new tools and services to start earning customer loyalty in this large market. Last week they launched 'MySuitcase', a new concept allowing customers to store and share their holidays before booking.

We recognise that more and more customers want to use our services through multiple devices and so we will continue to ensure they work well on mobiles and tablets. This year regardless of device, customers can access the same platform and pick up their transaction and details where they left off. Our effort to earn customer loyalty is reflected in the 4% improvement in our Net Promotor Score (42%).

Preferred partner - Be the best way for providers to acquire customers

Our business can only thrive if we keep adding value to our providers. We do this by making improvements to our CRM capability and other marketing to help providers reach the right customers effectively. We use our data tools, analytics and position as the only major independent price comparison website to develop relationships with providers and secure market leading exclusive products for customers. Providers understand the value we bring which is why we continue to increase the number of providers represented on our sites.

Trading performance

The Group operates across a number of businesses and product markets.

1 In the above table revenues in MoneySuperMarket.com arising from traffic from MoneySavingExpert.com have been shown in both MoneySuperMarket.com and MoneySavingExpert.com to present the revenues from MoneySuperMarket.com on a consistent basis in 2015 and 2014, and to show the contribution of the MoneySavingExpert.com business to the Group. Intercompany revenues have been eliminated as shown above.

Money

The Money vertical offers customers the ability to search for and compare products including credit cards, current accounts, mortgages, loans and savings accounts. It also includes elements of the Group's lead business (PAA) and advisory business (SAS) together with advertising revenue that is derived from financial products.

Revenue in the Money vertical increased by 20% from £29.5m to £35.5m.

Revenues from credit products were 17% ahead of last year, whilst non-credit revenues, principally savings and current accounts, grew 46%. The Group has seen continued good growth in its credit card and loans businesses.

The Group's non-credit business and in particular its savings revenues have continued to be impacted by the Government's 'Funding for Lending' scheme which enables financial institutions to borrow from the Bank of England at very attractive rates. This has meant deposit rates available to customers remain low which has reduced their propensity to switch products.

Other revenue, which includes revenue from leads and advertising revenue, reduced. The Group has continued to focus on improving its core click based offering reducing impression-based advertising revenues.

Insurance

The Insurance vertical offers customers the ability to search for and compare insurance products including breakdown, dental, home, life, motor and travel insurance. It also includes elements of the Group's lead and advisory businesses and data tools to insurance providers.

Revenues in the Insurance vertical increased by 8% from £68.1m to £73.6m.

Motor insurance premiums increased in the first half of the year after a period of decline, which encouraged greater interest in switching. Home insurance premiums remained at historically low levels which has suppressed the switching market.

Travel insurance showed growth, benefitting from improvements to the site. Life insurance also grew strongly following a redesign of the customer journey.

Home Services

The Home Services vertical offers customers the ability to search for and compare products such as broadband, mobile phones and utilities.

Revenue in the Home Services vertical increased by 93% from £9.1m to £17.6m.

Revenues from utility switching, which account for the majority of revenues within the Home Services vertical, were stronger than the same period last year as the channel continued to benefit from collective switch and price deflation in the energy market. Collective switches allow customers to sign up to a one-off deal negotiated with suppliers, which offer better value than going directly to the provider. Revenues from utilities slowed in the second quarter with fewer visitors looking to switch compared with 2014.

TravelSupermarket.com

TravelSupermarket.com offers customers the ability to search for and compare car hire, flights, hotels and package holidays, amongst other things.

Revenue in TravelSupermarket.com increased by 10% from £12.4m to £13.7m.

The Group has invested in the technology for the site which will deliver a new website with an enhanced customer offering and innovative functionality when planning and booking your travel. Testing is ongoing with live customers. Prior to the rollout Travelsupermaket.com moderated its marketing activity until the site was complete. The business maintained its television and radio advertising in the important January trading period.

MoneySavingExpert.com and Martin Lewis

MoneySavingExpert.com generated revenues of £14.6m (2014: £11.3m) for the Group, of which £11.1m (2014: £8.1m) related to revenues also recognised within MoneySuperMarket.com, from traffic referred to it by MoneySavingExpert.com. MoneySavingExpert.com contributed £10.5m (2014: £7.5m) to Group adjusted operating profit in the first half of 2015.

Trading trends have been consistent with those seen by MoneySuperMarket.com. Revenues from savings products have been challenging, whilst revenues from credit cards and utilities have been strong. MoneySavingExpert.com clubs and collective switches have been very popular and the service continues to innovate.

The Group has continued to build the team within MoneySavingExpert.com. The Founder and Editor-in-Chief, Martin Lewis is taking on the new role of Executive Chairman. Andy Hancock, the current Chief Operating Officer is appointed to the role of Managing Director MoneySavingExpert.com.

Martin Lewis was issued 22,123,894 shares in the company as part of the consideration for MoneySavingExpert.com on 21 September 2012. These shares were subject to an agreement not to sell before the 21 September 2015. He transferred some of these shares to the Charities Aid Foundation and these are subject to the same condition. Following his longer term commitment to the business, the company has released the lock-up on up to 9m of his shares with the remaining shares subject to a further lock-up of 180 days from the date of any disposal (subject to certain exceptions) and that the Charities Aid Foundation can sell up to 4.3m of its shares.

Cash Balance and Dividend

As at 30 June 2015 the Group had net cash of £22.8m (2014: net debt of £21.0m). 

Having reviewed the cash required by the business and the performance of the Group, the Board has decided to increase its interim dividend by 10% to 2.55p per ordinary share.

The ex-dividend date is 13 August 2015, with a record date of 14 August 2015 and a payment date of 11 September 2015. Shareholders have the opportunity to elect to reinvest their cash dividend and purchase existing shares in the Company through a Dividend Reinvestment Plan.

Earnings per ordinary share

Basic statutory earnings per ordinary share for the six months to 30 June 2015 were 5.5p (2014: 3.9p). Adjusted basic earnings per ordinary share increased from 5.6p to 7.3p per share. The adjusted earnings per ordinary share is based on profit before tax after adding back intangible amortisation related to acquisitions, costs related to the contingent payable for MoneySavingExpert.com and the profit on disposal of an associate in 2014. The tax rate of 20.25% (2014: 21.5%) has been applied to calculate adjusted profit after tax.

Principal Risks and Uncertainties

The Group faces a number of risks and uncertainties that may have an adverse impact on its operations, performance or future prospects. The Board has identified the principal risks and uncertainties most likely to affect the successful operation of the business in the second half of the year. The principal risks are considered unchanged from those outlined in the 2014 financial statements which were competition, changing consumer demand, brand strength, product offering, customer trust, partner relevance, economic uncertainty and regulation.

More information on these principal risks and uncertainties together with an explanation of the Group's approach to risk management is set out in the Annual Report and Accounts for the year ended 31 December 2014 on pages 24 to 25, a copy of which is available on the Group's corporate website http://corporate.moneysupermarket.com/.

Directors' responsibility statement in respect of the half-yearly financial report

Each of the Directors, whose names and functions are listed below, confirms that, to the best of his or her knowledge:

• the condensed set of financial statements has been prepared in accordance with IAS 34 Interim Financial Reporting as adopted by the EU

• the interim management report includes a fair review of the information required by:

(a) DTR 4.2.7R of the Disclosure and Transparency Rules, being an indication of important events that have occurred during the first six months of the financial year and their impact on the condensed set of financial statements; and a description of the principal risks and uncertainties for the remaining six months of the year; and

(b) DTR 4.2.8R of the Disclosure and Transparency Rules, being related party transactions that have taken place in the first six months of the current financial year and that have materially affected the financial position or performance of the Group during that period; and any changes in the related party transactions described in the last annual report that could do so.

29 July 2015

Independent Review Report to Moneysupermarket.com Group PLC

Introduction

We have been engaged by the Company to review the condensed set of financial statements in the half-yearly financial report for the six months ended 30 June 2015 which comprises the Consolidated Statement of Comprehensive Income, Consolidated Statement of Financial Position, Consolidated Statement of Changes in Equity and Consolidated Statement of Cash Flows and the related explanatory notes. We have read the other information contained in the half-yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.

This report is made solely to the Company in accordance with the terms of our engagement to assist the Company in meeting the requirements of the Disclosure and Transparency Rules ("the DTR") of the UK's Financial Conduct Authority ("the UK FCA"). Our review has been undertaken so that we might state to the Company those matters we are required to state to it in this report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company for our review work, for this report, or for the conclusions we have reached.

Directors' responsibilities

The half-yearly financial report is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the half-yearly financial report in accordance with the DTR of the UK FCA.

As disclosed in note 2, the annual financial statements of the Group are prepared in accordance with IFRSs as adopted by the EU. The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with IAS 34 Interim Financial Reporting as adopted by the EU.

Our responsibility

Our responsibility is to express to the Company a conclusion on the condensed set of financial statements in the half-yearly financial report based on our review.

Scope of review

We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410 Review of Interim Financial Information Performed by the Independent Auditor of the Entity issued by the Auditing Practices Board for use in the UK. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 30 June 2015 is not prepared, in all material respects, in accordance with IAS 34 as adopted by the EU and the DTR of the UK FCA.

Stuart Crispfor and on behalf of KPMG LLPChartered Accountants15 Canada Square

London, E14 5GL

29 July 2015

Consolidated Statement of Comprehensive Income

Consolidated Statement of Financial Position

Consolidated Statement of Changes in Equity

for the period ended 30 June 2015

The other reserves balance represents the merger and revaluation reserves generated upon the acquisition of Moneysupermarket.com Financial Group Limited by the Company, as discussed below, and a capital redemption reserve for £19,000 arising from the acquisition of 95,294,118 deferred shares of 0.02p by the Company from Simon Nixon.

Upon the acquisition of Moneysupermarket.com Financial Group Limited, a merger reserve of £60,750,000 for 15% of the fair value of assets acquired, a merger reserve of £16,923,000 for 45% of the book value transferred from a company under common control, and a revaluation reserve of £65,345,000 representing 45% of the fair value of the intangible assets transferred from a company under common control, were recognised. Amounts have been transferred from these reserves to retained earnings as the goodwill and other intangibles balances which related to this acquisition have been impaired and amortised.

The reserve for the Company's own shares comprises the cost of the Company shares held by the Group. At 30 June 2015, the Group held 241,600 shares at a cost of 0.02 pence per share through a trust, for the benefit of the Group's employees.

Consolidated Statement of Cash Flows

for the period ended 30 June 2015

Notes

1. Reporting entity

Moneysupermarket.com Group PLC ('Company') is a company domiciled in the United Kingdom. The condensed consolidated financial statements of the Company as at and for the six months ended 30 June 2015 comprises the Company and its subsidiaries ('Group').

Having reassessed the principal risks, the directors are satisfied that the Group has sufficient resources to continue in operation for the foreseeable future, a period of not less than 12 months from the date of this report. Accordingly, they continue to adopt the going concern basis in preparing the condensed financial statements.

The consolidated financial statements of the Group as at and for the year ended 31 December 2014 are available upon request from the Company's registered office at Moneysupermarket House, St. David's Park, Ewloe, Chester, CH5 3UZ or online at www.moneysupermarket.com.

2. Statement of compliance

This condensed set of consolidated interim financial statements has been prepared in accordance with IAS 34 Interim Financial Reporting as adopted by the EU. They do not include all of the information required for full annual financial statements, and should be read in conjunction with the consolidated financial statements of the Group as at and for the year ended 31 December 2014. The annual financial statements of the Group are prepared in accordance with International Financial Reporting Standards (IFRSs) as adopted by the EU.

The comparative figures for the year ended 31 December 2014 are not the Company's statutory accounts for that financial year. Those accounts have been reported on by the Company's auditor and delivered to the Registrar of Companies. The report of the auditor was (i) unqualified, (ii) did not include a reference to any matters to which the auditor drew attention by way of emphasis without qualifying their report, and (iii) did not contain a statement under section 498 (2) or (3) of the Companies Act 2006.

These condensed consolidated interim financial statements were approved by the Board of Directors on 29 July 2015.

3. Significant accounting policies

As required by the Disclosure and Transparency Rules of the Financial Conduct Authority, the condensed set of financial statements has been prepared by the Group by applying the same accounting policies and presentation that were applied in the preparation of the Group's published consolidated financial statements as at and for the year ended 31 December 2014

4. Acquisitions

MoneySavingExpert.com

On 21 September 2012, the Group acquired certain trade and assets from Martin Lewis and his company MoneySavingExpert.com. Additional amounts of up to £27.0m may become payable on the third anniversary of the completion of the acquisition. The amount payable depends in part upon the achievement of a number of non-financial performance measures specified in the purchase agreement and is, in part, at the discretion of the Company's Board, subject to the continued employment of Martin Lewis.

The arrangement to pay these additional amounts has been accounted for separate to the business combination as remuneration as their payment is linked to the continued employment of Martin Lewis.

The benefit payable is being charged to the Consolidated Statement of Comprehensive Income over the period in which services are provided (the earnout period) as an employment expense. Management has estimated the benefit payable by assessing, amongst other things, the performance of the acquired business since acquisition, against the measures specified in the purchase agreement. During the year £5.0m (2014: £4.0m) has been charged to the Consolidated Statement of Comprehensive Income as an employment expense, and £0.4m (2014: £0.3m) has been recognised as an expense within net finance costs, being the unwinding of the discount rate applied.

At 30 June 2015, the amount accrued within current liabilities was £20.8m (2014: £15.4m within non-current liabilities).

5. Segmental information

In applying IFRS 8 - Operating Segments, the Group discloses five reportable segments. The basis of segmentation is unchanged from that detailed in the consolidated financial statements of the group for the year ended 31 December 2014.

6. Taxation

The Group's effective consolidated tax rate for the six months ended 30 June 2015 is 20.2% (2014: 20.6%). The effective tax rate is broadly in line with the applicable corporation tax rate of 20.25%, which has decreased from 21.5% in the prior year, following a reduction in the enacted rate. In both periods, the effective rate has been broadly in line with the applicable corporation tax rate for the year.

7. Earnings per share

Basic and diluted earnings per share have been calculated as follows.

8. Dividends

9. Intangible fixed assets

10. Share-based payments

On 30 April 2015 conditional awards were made over 1,324,688 shares to a number of Directors and employees under the Long Term Incentive Plan scheme.

The share option charge in the Statement of Comprehensive Income can be attributed to the following types of option:

The following table indicates the changes in the number of share options during the period. The number of awards in the table represents the number awarded, of which up to 150% could vest:

11. Related party transactions

The Company is the ultimate parent entity of the Group. Intercompany transactions with wholly owned subsidiaries have been excluded from this note, as per the exemption offered in IAS 24.

During the period there were no transactions, and at the period end there were no outstanding balances, relating to key management personnel and entities over which they have control or significant influence, other than the Long Term Incentive Plan awards noted in the table above. On 22 June 2015, 1,932,470 awards vested under the 2012 Long Term Incentive Plan following 98% achievement of the maximum performance criteria. On 30 April 2015, under the 2015 Long Term Incentive Plan, conditional awards were made over 1,324,688 shares.

Simon Nixon, Peter Plumb, Graham Donoghue, Matthew Price, Bruce Carnegie-Brown and Sally James received dividends from the Group during the period totalling £5,198,969 in relation to the period ended 30 June 2015.

Forward looking statements

This report includes statements that are forward looking in nature. Forward looking statements involve known and unknown risks, assumptions, uncertainties and other factors which may cause the actual results, performance or achievements of the Group to be materially different from any future results, performance or achievements expressed or implied by such forward looking statements. Except as required by the Listing Rules and applicable law, the Company undertakes no obligation to update, revise or change any forward looking statements to reflect events or developments occurring after the date of this report.