Moneysupermarket.com (MONY)

Price: 233p

Gain to date: 34%

We recommended money-saving website operator Moneysupermarket (MONY) in May 2022 on the basis the cost-of-living crisis would lead everyone to start comparing what they pay at the moment for services like insurance and broadband with what they could be paying if they switched to a different provider.

WHAT HAS HAPPENED SINCE WE SAID TO BUY?

We’re pleased to say that, with food inflation hitting double digits and housing costs in general (rent, mortgages, fuel bills, electricity) going through the roof, activity has taken off not just in obvious areas like services but also in sectors like travel as people have used the opening up of the airline market to get away from the daily grind.

At the same time, as interest rates have risen, borrowers have been scouring the site for cheaper deals on mortgages, loans and credit cards, while those with savings have been looking for deposit accounts with attractive rates.

In the year to December, the firm reported a healthy 22% increase in revenue driven by strong performances in its travel and
money channels and solid trading at the core insurance business.

The disappointments, such as they were, are that the big money-spinner of energy switching seems unlikely to return in full this year, and the firm didn’t increase its dividend from the previous year’s 11.7p per share, which upset a few investors.

The shares were initially marked down 8% on the report, but they ended the day in positive territory as buyers stepped in.

WHAT SHOULD INVESTORS DO NOW?

We would keep hold of Moneysupermarket as it is a unique franchise in terms of listed UK companies.

While the lack of energy saving services is a hindrance, it is surely temporary and every day that passes brings its return closer.

Also, maintaining last year’s (uncovered) dividend at 11.7p made sense to us as the company needs to maintain flexibility.

If it can’t find any interesting organic or acquisitive growth opportunities, the board has already said shareholders will have money handed back to them in a ‘special distribution’.

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