Moneysupermarket shares collapse after slowdown in energy switching
Shares in Moneysupermarket collapsed on Thursday morning after the company warned profits would come in at the lower end of expectations following a slowdown in energy switching.
The FTSE 250 firm said revenues in its home services division, which includes gas and electricity, fell by a third in the six months to June to £16.9 million.
It blamed the fall on fewer consumers switching providers, which was down to a "lack of blockbuster energy deals".
As a result, the price comparison site has slashed its outlook for the year, saying operating profit will come towards the lower end of the consensus range at between £112.6 million and £117.4 million.
Shares fell 6% to 335.6p in morning trading.
Group revenue increased by 5% year-on-year to £165.3 million over the period, helped by the continued strength in its biggest segment, insurance, where revenues rose 18% year-on-year.
The board also increased the interim dividend by 3% to 2.84p per ordinary share.
However, the market chose to ignore all of this and focus on the reduced energy switching activity and disappointing outlook.
Chief executive Mark Lewis, who joined the firm from John Lewis in May, said: "Insurance switching grew an encouraging 18%. However, the energy market continues to evolve and the lack of blockbuster energy deals from providers meant we didn't collectively switch as many people as last year.
"Our focus now is on using our tech investment to find new ways to help our customers, particularly on mobiles, and improving our everyday energy switching."
Analysts at Liberum said: "The company's comments (on its energy switching activity) suggest this will not be as beneficial in the future as in the past.
"We think this is a company that is very well run and we like the management team but we do have issues over the barriers to entry in the price comparison industry and the relative opacity of numbers."