Moneysupermarket shares plunge after growth warning
Shares tumbled as much as 27% at one stage after the FTSE 250 firm said earnings are expected to be ‘broadly flat’ in 2018.
Price comparison site Moneysupermarket.com has seen its shares take a hammering after it warned over slowing growth this year.
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Shares tumbled as much as 27% at one stage after the FTSE 250 firm reported lower-than-expected annual profits and said earnings are expected to be “broadly flat” in 2018.
It said it expected to grow more slowly in 2018 than the 6% to 7% forecast for the price comparison market overall.
The group added: “We have started the year at a similar growth rate to last year.
“This means that adjusted EBITDA (earnings) for 2018 is expected to be broadly flat before growth resumes from 2019 onwards.”
It reported a 5.3% rise in pre-tax profits to £96.1 million for 2017 and pledged to spend £5 million on boosting its product engineering teams to improve customer experience.
But the firm also cautioned that plans to revamp the business would cost up to £9 million in 2018.
Chief executive Mark Lewis, who joined the group from John Lewis last May, said: “We are committed to leading the way in price comparison to make saving with us easier, quicker and simpler.
“Our goal is to offer our customers ways to save that they didn’t know existed and to do so in a way that is as effortless as we can make it.”
The growth warning comes after a difficult six months for the group after it alerted over 2017 profits last July following a slowdown in energy switching.
Shares have fallen by nearly a third since then.
Ian Whittaker, an anlayst at Liberum, said the new guidance would lead to “significant” profit downgrades for 2018.
But he said: “The new strategy does make sense in that one of the key points is to increase personalisation and therefore attempt to lock in the consumer.
“We also like the management team and the fact they are taking the right steps despite what it will mean for estimates should be applauded.”