Moneysupermarket.Com Regulatory News (MONY)

2 August 2011

MoneySupermarket.com Group PLC interim results for the six months to 30 June 2011

Strong financial results and cash generation

Special dividend of £20m (3.93p per share)

MoneySupermarket.com Group PLC ("MoneySupermarket.com" or the "Company"), the UK's leading price comparison website, announces its interim results for the 6 months to 30 June 2011. 

Financial highlights

·; Delivery of strong financial results and cash generation

·; Growth driven by continued structural growth in our online markets and targeted investment in technology and brand building improving conversion

·; Total adjusted revenue of £88.7m (2010: £71.6m)

o UK internet revenues 24% ahead of the same period last year

o MoneySupermarket.com revenues 27% ahead

·; Adjusted EBITDA up 27% at £23.0m (2010: £18.1m)

·; Adjusted gross margin stable at 71.4% (2010: 71.4%)

·; Cash balances of £32.2m (2010: £28.3m) at the period end. The Group remains highly cash generative, converting 82% of adjusted EBITDA to cash 

·; Dividend increased, with additional payment of special dividend

o Interim dividend increased by 15% to 1.5p per share

o Special dividend of £20m, or 3.93p per share

o Commitment to progressive dividend policy

·; £3.5m credit from successful resolution of dispute with HMRC re the VAT treatment of certain of the Group's lines of business

Operational highlights

·; Market-leading position and share maintained in competitive marketplace

·; Results driven by ongoing investment in technology and brand

o Site functionality and usability improved

§ £2.7m capital investment in improving technology for both customers and providers

o Continued investment in brand, including sponsorship of Britain's Got Talent to consolidate position as a mainstream brand

§ Offline marketing spend £5.2m (51%) ahead, while maintaining marketing efficiency

o Direct-to-site revenues maintained at 66%

·; Growing data asset enables more personalised and effective CRM

Outlook

Trading in July has been in line with expectations with revenues approximately 15% ahead of the same period last year. The Board remains confident in the prospects for the full year.

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

"MoneySupermarket.com has had a great six months. We have seen strong trading momentum through the period and delivered double digit growth in both revenue and profits, driven by our investment in our brand and technology. MoneySupermarket.com is the UK's leading price comparison site and our continued success comes from our proven strategy and our determination to help every household make the most of its money.

"Looking ahead, while the outlook for the economy remains uncertain, we are confident that our markets will continue to grow. More and more consumers are going online to find the best deals and the unrivalled strength and breadth of our offer makes us well-placed to make the most of those opportunities. That confidence is underlined today by our decision to return more money to our investors. We remain highly cash generative and are delighted to announce both an increase in our interim dividend and a further special dividend."

(1) See note 1. Basis of preparation in Financial & Business review

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:

Paul Doughty, Chief Financial Officer, MoneySupermarket.com

Tel: 0207 353 4200

Susanna Voyle or Tom Murray, Tulchan Group

Tel: 0207 353 4200

Financial and Business Review

The Group has presented below an extract of the Consolidated Statement of Comprehensive Income for the six months ended 30 June 2011 and 30 June 2010 along with reconciliation to adjusted EBITDA. Revenue for the six months ended 30 June 2011 was £91.7m (2010: £71.6m) which generated a reported operating profit of £12.4m (2010: £2.7m). The Directors believe that the presentation of the adjusted EBITDA 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 2011

Notes

1. Basis of Preparation

The results show the trading results for the six months ended 30 June 2011 and 30 June 2010. The following adjustments

have been made in arriving at adjusted EBITDA:

·; The acquisition of MoneySupermarket.com Financial Group Limited by the Company gave rise to £207.2m of intangible assets. These are to be written off over a period of 3-10 years. Charges of £11.5m and £12.5m have been included for the six months ended 30 June 2011 and 2010 respectively.

·; On 14 October 2010 the Group acquired Financial Services Net Limited. The acquisition gave rise to £6.1m of intangible assets which are to be written off over a period of 3-10 years, and which gave rise to an amortisation charge of £0.4m in the current period.

·; Certain share option charges relating to Directors, senior management and other employees of the Group arising from the time the Group listed or when it was privately owned have been added back to calculate adjusted EBITDA. A charge for awards made under the Group's Long Term Incentive Plan is included within the adjusted results for 2010 and 2011.

·; The Group received written notification in June 2011 that it had been successful in challenging the VAT treatment of the supply of certain of its lead services. Following a ruling received in March 2008 from HMRC the Group had treated the supply of its lead services as a standard rated supply for VAT purposes rather than as an exempt supply that the Group believed to be correct. Consequently the Group has recorded additional revenues of £3.7m in the first half statutory results for the year together with a charge of £0.2m in administrative expenses. Of these amounts the Group has included a credit of £0.7m to revenue in the first half results (2010:nil) together with a charge of £0.4m to administrative costs (2010:nil) reflecting the estimated impact on the first half results.

Reference is made in the Overview and Financial Highlights sections to adjusted revenues, adjusted cost base, adjusted distribution and administration expenses, and adjusted staff costs. These measures represent the costs charged to the Statement of Comprehensive Income, less the intangible amortisation, pre-listing share option charges and the impact of the VAT settlement referred to above.

Overview

We present a strong set of financial results for the six months ended 30 June 2011. Adjusted revenue for the six months was £88.7m (2010: £71.6m), up 24%, generating adjusted EBITDA of £23.0 (2010: £18.1m), up 27%.

During the first half of 2011 the Group has continued to benefit from the investments it made in its websites during 2010 which helped improve site functionality and the usability of the websites. This helped improve conversion and subsequently revenue per visitor (RPV). Our investment in technology continued in the first half with an emphasis on improving and simplifying the underlying architecture. This program will continue into the second half of the year and into 2012. The Group invested £2.7m in the first half of the year in hardware and software which has been capitalised. This work is designed to ensure in the longer term that the Group will be able to more rapidly develop and deploy new products or services or make changes to its existing services more efficiently and to reduce the overall cost of the ownership of its websites.

Consistent with its strategy of driving higher-margin, direct-to-site revenues, the Group has continued to increase its investment in offline marketing. This included, in the second quarter, the sponsorship of Britain's Got Talent, the ITV primetime entertainment show which has helped consolidate MoneySupermarket.com's position as a mainstream brand. Consequently, and as previously indicated, offline marketing expenditure in the first half of the year was more than 50% ahead of the same period last year. Overall marketing expenditure including online costs increased by approximately one third. The Group will continue to invest in its brand in the second half and launched a new advertising campaign in the first week of July. Offline marketing expenditure is therefore expected to continue to be ahead of the comparator period in the second half of the year. However, consistent with previous years, the absolute quantum of spend is likely to be lower than in the first half of the year reflecting lower expenditure levels in the fourth quarter.

Financial Performance

Adjusted revenue increased by 24% to £88.7m (2010: £71.6m) and adjusted EBITDA increased by 27% to £23.0m (2010: £18.1m). The Group saw revenue growth in its Money, Insurance and Home Services verticals of approximately 27% against the same period last year whilst revenues in the Travel vertical remained flat in difficult market conditions. The Group maintained its strong market share in financial services against its key competitor set, measured by Experian Hitwise.

Group adjusted gross margins at 71.4% were broadly flat. The Group maintained its proportion of direct to site revenue with direct to site revenues representing 66% of revenue (2010: 67%) whilst paid search represented 22% of revenue in the first half of 2011 (2010: 22%).

The adjusted administrative and distribution cost base increased by 20% from £35.4m to £42.4m. Distribution expenses increased by £5.5m (48%) driven by increased spend on creative costs and media and the sponsorship of Britain's Got Talent. Adjusted administrative costs increased by £1.5m (6%) over the prior year to £25.5m in 2011. The Group has continued to manage its cost base tightly. Adjusted staff costs (including contract resource) were £0.5m lower at £13.3m. Headcount decreased from 427 to 419 from June 2010 to June 2011.

Other costs, including irrecoverable VAT, increased by £2.1m. The VAT rate increased from 17.5% to 20% which together with the higher marketing spend increased the input tax incurred by the business and the quantum that was irrecoverable.

There were no costs in 2011 for the German operation, which was closed in the first half of 2010, during which period costs of £0.5m were incurred.

Adjusted EBITDA margins increased from 25% to 26% against the same period last year.

The Group operates its internet business across four vertical markets. These are discussed below:

Internet business

The Directors use key performance indicators ('KPIs') to assess the performance of the internet business against the Group's strategy. These are reviewed on a regular basis. The principal KPIs for the internet business are as follows:

Visitors

The Group measures the number of visitors to its websites as the number of unique visitors per day per channel, measured on a cumulative basis using cookie-based tracking methodologies.

Transactions

The Group measures transactions at the point in time that the customer leaves the Group's websites having clicked through to a third party website, or in some cases having completed an application form hosted on the Group's websites.

Revenue per visitor ('RPV')

The Group measures the total revenue (including click and other internet revenue) divided by the number of visitors defined above.

Revenue per transaction ('RPT')

The Group measures the click based revenue divided by the total number of transactions defined above.

The performance of each of the internet verticals is discussed below:

Money

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

The KPIs for the Money vertical are shown below:

Trading in the Money vertical was strong relative to the same period last year. Total revenue increased by 31% from £20.7m to £27.0m and click based revenue by 38% from £17.9m to £24.8m. Visitors were 4% higher with visitor numbers strengthening into the second quarter relative to the same period last year.

The Group saw growth across both its credit business and more generally from other banking products particularly savings which performed very strongly. Revenues from credit products defined as revenues from secured and unsecured loans, credit cards, debt solutions and mortgages excluding impression based advertising were 25% ahead of the same period last year.

Good product availability and the improvements made to the Money website during 2010 helped improve RPV relative to the same period last year.

Other revenue, which includes revenue from leads, commission based sales through MCAT for mortgages and loans, and advertising revenue fell over last year by £0.6m. The Group has continued to focus upon improving its core click based offering encouraging consumers to click through and transact directly with providers rather than through its lead based business.

Insurance

The Insurance vertical offers customers the ability to search for, and compare, insurance products for, amongst other things, breakdown, dental, home, life, medical, mortgage payment protection, motor, payment protection, pet and travel insurance. It also includes elements of the Group's lead business (PAA) and advisory business (MCAT) together with advertising revenue that is derived from insurance products. 

The KPIs for the Insurance vertical are shown below:

Revenues in the Insurance vertical increased by 24% from £40.6m to £50.3m. Click based revenue increased by 24% from £37.5m to £46.4m.

Revenues increased in each of the three major lines of business, being motor, home and travel insurance, with home performing particularly well. Home and motor insurance benefitted from site improvements made during 2010. This has been reflected in improved provider conversion in the period, increasing revenues and RPV.

Visitors increased by 15% over the period helped in part by a number of new TV advertisements which resonated well with the public.

Other revenue increased by £0.9m driven by the launch of a new telephone based non advice life insurance channel which offers consumers help in completing their life insurance application. It also includes £0.5m from the resolution of the VAT dispute referred to below.

Travel

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

The KPIs for the Travel vertical are shown below:

Revenue in the Travel vertical increased by 1% from £7.5m to £7.6m. Click based revenue increased by 2% from £6.8m to £7.0m.

During the first quarter the Group relaunched its package holidays channel supported by a new television advertising campaign. This has helped increase revenues to the package holidays channel by 10% and also drove a 16% increase in visitors. Other major channels in the vertical however declined by approximately 5% in what remains a challenging market for travel operators facing uncertain consumer demand.

Home Services

The Home Services vertical offers customers the ability to search for, and compare, products for broadband, mobile telephones, vouchers, shopping and utilities.

The KPIs for the Home Services vertical are shown below:

Revenue in the Home Services vertical increased by 38% from £2.6m to £3.6m in the six months to 30 June 2011. This was driven largely by an increase in revenues from the utilities channel which represents the Group's largest line of business within the Home Services vertical. This performed particularly strongly in the second quarter as once again energy pricing came to the fore in the media following double digit price increases made by a number of major providers.

Visitors grew by 8% helped by the media coverage referred to above of the rising energy market and increased visitors generally to the shopping and vouchers channels.

VAT

A number of the Group's supplies operate close to the boundary of being a marketing service which is a standard rated supply for VAT purposes and being a financial or insurance intermediary service which is considered to be an exempt service for VAT purposes. The application of the relevant legislation to internet business models has evolved over recent years. The VAT treatment of most of its supplies has been agreed between HMRC and the Group, in particular the Group has written agreement in respect of all of its major supplies that it has deemed to be an intermediary service and that therefore it has deemed to be exempt.

Following a ruling received from HMRC in March 2008 the Group was required to classify revenues from its lead based services as standard rated rather than as an exempt supply as the Group believed to be correct. The Group had previously made a provision for HMRC to make such an interpretation for a number of years before this. The Group has challenged HMRC's conclusion since March 2008 and during the course of the second quarter received written notification that it had had its challenge upheld. The Group has reached agreement in principle with HMRC and has recognised a one off net credit of £3.5m in the first half of the year in its statutory numbers recording additional revenues of £3.7m and a charge to administrative costs of £0.2m. Of these amounts the Group has recognised a credit of £0.3m in its adjusted numbers being a credit of £0.7m to revenues and a charge of £0.4m in administrative costs reflecting the estimated benefit of the change in the treatment on the first half of the year. The Group expects to recognise a benefit of approximately £0.5m per annum on an ongoing basis following settlement.

Investment in HD Decisions

On 25 March 2011 the Group invested £1m in acquiring a 25% stake in HD Decisions Limited. HD provides credit decision support technology which allows consumers to better understand the probability of being approved for a credit product before making a formal application for credit. This improves the user's experience on the Group's websites by matching consumers with credit products that they are eligible for and increases the number of relevant applications for individual providers which improves conversion. Importantly a credit footprint is not left on the consumer's profile at the point of initial enquiry. Furthermore providers are able to reduce the overall costs of credit searches they incur at the application stage if consumers proceed to apply only for those credit products that are suited to their particular circumstances. The software is currently deployed to a portion of the Group's credit card channel customers and will be rolled out later in the year to its loan channels.

Cash Balance and Dividend

As at 30 June 2011 the Group had a cash balance of £32.2m (2010: £28.3m). The Group continued to strengthen its cash position throughout the period after payment of dividends of£12.9m in the first six months of the year. Having reviewed the cash required by the business and the performance of the Group, the Board has decided to increase its interim dividend by 15% to 1.5p per ordinary share. This is consistent with the progressive dividend policy the board reaffirmed at the preliminary announcement earlier this year.

In addition to the increased interim dividend the Board has decided to pay a further special dividend of £20m or 3.93p per share reflecting the Board's continued confidence in the business' ongoing ability to generate cash.

The ex-dividend date is 17 August 2011, with a record date of 19 August 2011 and a payment date of 16 September 2011. 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 2011 were 1.7p (2010: 0.4p). Adjusted basic earnings per ordinary share increased from 2.3p to 3.1p per share. The adjusted earnings per ordinary share are based on profit before tax after adding back intangible amortisation, share-based payment charges arising from pre-listing share options and adjusting for the impact of the VAT settlement referred to above. An effective tax rate of 26.5% (2010: 28%) has been applied to calculate adjusted profit after tax.

Outlook

Trading in July has been in line with expectations with revenues approximately 15% ahead of the same period last year. The Board remains confident in the prospects for the full year.

Responsibility statement of the Directors 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 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.

1 August 2011

Principal Risks and Uncertainties

Set out below is a summary of the principal risks and uncertainties facing the Group for the remaining six months of the year.

Financial risks

Significant worsening in credit markets

Financial institutions may reduce the quantum of lending and tighten their acceptance criteria for customers seeking to obtain credit. This may reduce Group revenue. Providers may increase their focus on customer retention rather than acquisition. This may reduce commissions available to price comparison websites.

Reduction of providers

Providers may consolidate, withdraw their products from price comparison websites or reduce their customer acquisition activity via price comparison websites. This may reduce competition for business, customer choice, Group revenue and the customer proposition of price comparison websites.

Investment in new areas

Significant investments in new products and services fails to make a return.

Financial services and other markets regulation or new geographics

The business model in financial services or other lines of business may be compromised by changes to existing regulation or the introduction of new regulation, or changes to the tax legislation, particularly value added tax.

Operational risks

Competitive environment

Loss of market share and erosion of margins from increased competition.

Brand perception and reputation

Reduction in customer loyalty with existing customers and an inability to attract new customers if the business fails to maintain its position as a leading price comparison website or if its reputation is negatively impacted by any event, such as the loss or misuse of customer personal data.

Business continuity, capacity and functionality of IT and systems

Failure to provide adequate service levels to customers or maintain revenue generating services.

Loss of key management

Loss of key management resulting in a lack of necessary expertise or continuity to execute strategy.

Reliance on search engine natural listings

Reduction in gross margin through reduction in revenue derived from search engine optimisation activities.

Economic environment

Reduction in visitors and revenue from a recession as customers seek to reduce levels of discretionary expenditure.

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 2011 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 Services Authority ("the UK FSA"). 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 FSA.

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 2011 is not prepared, in all material respects, in accordance with IAS 34 as adopted by the EU and the DTR of the UK FSA.

Stuart Burdassfor and on behalf of KPMG Audit PlcChartered AccountantsSt James' Square

Manchester, M2 6DS

1 August 2011

Condensed Consolidated Statement of Comprehensive Income

Basis of Preparation

The adjusted results show the trading results for the 6 months ended 30 June 2010 and 30 June 2011. The board regards an adjusted EBITDA figure as being the most meaningful profit measure for this period. The following adjustments have been made to the Condensed Consolidated Statement Of Comprehensive Income:

·; The acquisition of MoneySupermarket.com Financial Group Limited by the Company gave rise to £207.2m of intangible assets. These are to be written off over a period of 3-10 years with a charge of £12.5m and £11.5m respectively in the 2010 and 2011 Condensed Consolidated Statements Of Comprehensive Income.

·; Certain share option charges relating to Directors, senior management and other employees of the Group arising from the time the Group listed or when it was privately owned have been added back to calculate adjusted EBITDA. A charge for awards made under the Group's Long Term Incentive Plan is included within the adjusted results for 2010 and 2011.

·; On 14 October 2010 the Group acquired Financial Services Net Limited. The acquisition gave rise to £6.1m of intangible assets which are to be written off over a period of 3-10 years, and which gave rise to an amortisation charge of £0.4m in the current period.

·; The Group received written notification in June 2011 that it had been successful in challenging the VAT treatment of the supply of certain of its lead services. Following a ruling in March 2008 from HMRC the Group had treated the supply of its lead services as a standard rated supply for VAT purposes rather than as an exempt supply that the Group believed to be correct. Consequently, the Group has recorded additional revenues of £3.7m in the first half statutory results for the year together with a charge of £0.2m in administrative expenses. Of these amounts, the Group has included a credit of £0.7m to revenue in the first half results (2010: nil) together with a charge of £0.4m to administrative expenses (2010: nil) reflecting the estimated impact on the first half results.

Condensed Consolidated Statement of Financial Position

Condensed Consolidated Statement of Changes In Equity

for the period ended 30 June 2011

Other reserves

The other reserves balance represents the merger and revaluation reserves generated upon the acquisition of MoneySupermarket.com Financial Group Limited by the Company.

Foreign currency translation reserve

The translation reserve comprises all foreign currency differences arising from the translation of the financial statements of foreign operations.

Reserve for own shares

The reserve for the Company's own shares comprises the cost of the Company shares held by the Group. At 30 June 2011, the Group held 263,693 shares at a cost of 0.02 pence per share through a trust, for the benefit of the Group's employees.

Condensed Consolidated Statement of Cash Flows

for the period ended 30 June

 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 2011 comprise the Company and its subsidiaries ('Group').

The financial statements have been prepared on a going concern basis, which the Directors deem appropriate, given the Group's positive cash position and lack of debt.

The consolidated financial statements of the Group as at and for the year ended 31 December 2010 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

These condensed consolidated interim financial statements have 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 2010.

The comparative figures for the year ended 31 December 2010 are not the Company's statutory accounts for that financial year. Those accounts have been reported on by the Company's auditors and delivered to the Registrar of Companies. The report of the auditors was (i) unqualified, (ii) did not include a reference to any matters to which the auditors 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 1 August 2011.

3. Significant accounting policies

As required by the Disclosure and Transparency Rules of the Financial Services Authority, the condensed set of financial statements has been prepared by the Group by applying the same accounting policies and significant judgements as were applied by the Group in its published consolidated financial statements as at and for the year ended 31 December 2010.

4. Segmental information

In applying IFRS 8 - Operating Segments, the Group has disclosed four reportable segments, being Money, Insure, Travel and Home. This disclosure correlates with the information which is presented to the Group's Chief Operating Decision Maker, the Company's Board, which reviews revenues by segment, but margin, operating costs and assets at a consolidated level. All of the Group revenue reported for the first six months of 2011 was generated in the UK (2010: £71.5m out of Group revenue of £71.6m). Included within Other revenue in the current period is £3.0m of additional revenue relating to prior periods which the Group has recognised in relation to the

settlement of a VAT dispute concerning its leads business. The full impact of this settlement is described in Note 10.

5. Income tax

The Group's effective consolidated tax rate for the six months ended 30 June 2011 was 29.7% (2010: 31.9%). This change in the effective tax rate was caused by the following:

·; During the period ended 30 June 2010, the Group incurred losses from its German operation, which it believed it could not offset against profits generated elsewhere in the Group for corporation tax purposes, totalling £515,000, compared with only £5,000 of losses in the current period.

6. Earnings per share

Basic and diluted loss per share has been calculated on the following basis.

7. Dividends

8. Intangible fixed assets

9. Share-based payments

On 9 March 2011 further conditional awards were made over 2,630,535 shares to a number of Directors and employees under the Long Term Incentive Plan scheme.

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

The following table indicates the changes in the number of each type of share option during the period:

10. Settlement of VAT dispute

During the course of the period the Group received written notification that it had been successful in challenging the VAT treatment of the supply of certain of its leads services. Following a ruling received from HMRC in March 2008 the Group had treated the supply of its leads services as a standard rated supply for VAT purposes rather than as an exempt supply that the Group believed to be correct. Consequently the Group has recorded additional revenues of £3.7m in the first half of the year, together with a credit of £0.2m to administrative costs. The adjusted first half results reflect the estimated impact of the change in VAT treatment on the first half results being a £0.3m credit to profit, the largest element of which is an additional £0.7m of revenues. The Group anticipates receiving the cash benefit of the change in the VAT treatment during the second half of the year.

11. Related party transactions

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.

Simon Nixon, Paul Doughty, Michael Wemms, Bruce Carnegie-Brown and Gerald Corbett received dividends from the Group during the period totalling £6,814,472 in relation to the year ended 31 December 2010.

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.