Yahoo Finance Moneysupermarket shares plunge as investors told not to expect growth
Shares in Britain’s biggest price comparison website Moneysupermarket tumbled on Thursday after it told investors not to expect earnings growth in the year ahead.
The company, known for its audacious dance-off adverts that feature businessmen in hot pants, said its revenue growth would lag the 6pc to 7pc boost expected for the wider market as it focuses on a new strategy.
Chief executive Mark Lewis, the former retail boss of John Lewis who took the helm last year, said his aim was to make the website easier to use so that customers can save in ways "they didn't know existed".
The shift in focus will involve spending an extra £5m to build its product engineering teams as well as up to £9m in one-off costs, the company said.
It also posted a revenue rise of 4pc to £329.7m for 2017, slightly below analyst expectations.
Shares in the FTSE 250 group plunged 25pc on Thursday morning as investors flinched at the growth warning. They were trading down 16pc by midday, the lowest since December 2016.
While growth this year is forecast to be "broadly flat" the company said it expects an uptick in 2019.
"If [it] can deliver on what appear to be sensible, targeted plans, then in the medium term it should be able to deliver both top line and bottom line growth for shareholders," said RBC analyst Kamran Hossain.
It's been a rocky six months for Moneysupermarket, which warned last summer that a lack of bargains being offered by the big energy providers would hit its full-year profits as fewer people were switching. It reported a 6pc rise in profits to £78.1m on Thursday.
Mr Lewis told The Telegraph last year that it was a challenge to drum up interest in the price comparison market, which is why the industry pours money into marketing through dance-off and meerkat commercials.
"We’re very aware we’re in a pretty low interest category – we have to find ways to be engaging," the former advertising executive said. "I’m pleased our strutting and dancing builders are talked-about advertising."
