Moneysupermarket.com tumbles on regulatory concerns despite strong results

3rd Mar 2015 09:18

Moneysupermarket.com's revenue rose 10% to £248.1m in 2014 after increasing its advertising expenditure and investing in technology but shares sank on worries that the government will make price comparison sites compensate customers who fail to get better deals. Over the weekend, the chairman of the government's Energy and Climate Change Committee, Tim Yeo MP, called for price comparison companies to compensate customers who had been "duped" into buying energy policies that "may not have been the cheapest or most appropriate for their needs".The FTSE 250 company made no reference to the comments in its results, but later tried to reassure analysts that this would not be the industry's version of the PPI scandal that has so hurt banks, but most were unimpressed.Results from the company were impressive though, with a statutory post-tax profit rise of 52% to £52.8m as travel expenses advanced more than 25% over the year.An investment in technology worth £16.1m was part of a three-year plan outlined by the online company.TravelSupermarket.com has since reported a 28% increase in revenue while MoneySavingExpert revenue rose 17% in 2014.The investment included developing its data asset, building a new aggregation engine and improving mobile performance.Chief executive Peter Plumb said: "Our three well-trusted brands helped more than 40m users make the most of their money in 2014. We invested over £16m in our websites and systems and will do the same in 2015 to ensure we lead the market as the easiest and best way for families to save money on their household bills."Following 10% revenue growth in 2014, the group has started the year well and is on track to save more families more money than ever before."On their call with analysts later, Plumb and chairman Bruce Carnegie-Brown gave somewhat conflicting answers.Plumb stressed that the company complied completely with the compliance codes of its accredited regualtor, Ofgem, but of course could not definitely rule out the possibility that compensation payments may be introduced.Carnegie Brown said: "As far as we know, we're complying with all the rules" but warned "regulation can be capricious", with retrospectively penalties sometimes applied. He admitted that the level of regulatory "intrusion" on the price comparison industry was likely to broaden.