Gocompare sees first-half profit up 22%

Price comparison website Gocompare.com said on Tuesday that it expects to report a 22% increase in first-half adjusted operating profit, driven mostly by an improvement in marketing margin.

In a pre-close trading update for the six months to the end of June, the company said it has made good progress in the year-to-date, with revenue up 4% on the same period last year to around £75.8m.

Gocompare said cash generation continues to be strong, with leverage down to 1.5x compared to 1.7x at 31 December 2016 and 2.8x at the time of the demerger.

The company also said it has bought a minority stake in digital mortgage robo-adviser Mortgage Gym, which plans to launch its new platform in September.

Chief executive officer Matthew Crummack said: "We have made strong progress in delivering improvements to our core business following organisational and operational transformations early in the year. This created positive momentum in trading performance, which, as anticipated, will accelerate through the year and we are delighted with the 22% increase in adjusted operating profit delivered in H1.

"As well as progressing the core business we have continued to develop our strategy and our investment in Mortgage Gym is an exciting opportunity to work with an innovative business that is well aligned to our mission of helping people everywhere save time and money. We are well positioned for the remainder of 2017 and the board remains confident of the outlook for the full year."

Nicholas Hyett, equity analyst at Hargreaves Lansdown, said: "GoCompare.com is taking a deep breath before launching into the next verse. Margins have improved dramatically this half, and while revenue may have slowed, management remain confident it’ll pick up in the second half.

"Cash generation remains strong and leverage is falling. That’s supporting deals with magazine group Haymarket and robo-adviser Mortgage Gym, important steps on the group’s journey to diversify its revenue base away from insurance. For now though, it’s a case of waiting of to see what the year’s second act brings.”

At 0855 BST, the shares were up 4.3% to 108.25p.