Moneysupermarket (MONY.L) [Investec Securities]
Price: 180p | Target: Under Review | Rec: Buy
FY figures are as expected and the outlook positive with SEO/Google issues looking back on track, which is potentially a big positive for Insurance.

Valuation: CY14E P/E of c.

16.1x and adj.

EV/EBITDA of c.

11.6x.

The dividend yield is 4.2% and FCF yield is 6.9%.

This does not look expensive if the diversified online model can really deliver, but volatility/visibility by vertical and recent Google/SEO issues have been unhelpful.

Our target price and forecasts move to under review. * Outlook: satisfactory with 2M revenues up mid-single digit (our FY estimate is currently +2.5%) and trading consistent with 4Q trends.

Importantly, the Google ‘penalty’ on natural search for MONY subsidiary ‘traffic ‘feeder’ sites appears to have lifted, which should help SEO from here especially in Insurance, so this is good news (car insurance is currently no.5 in SEO for us).

New open source technology for travelsupermarket (capex). * Forecasts: under review.

We expect to tweak EBITDA up +2-3% to c.

£89m from the £87m now.

Our current FY14/15E EPS estimates are 11.2p/12p (Reuters consensus: 11.7p/12.7p). * FY13A sales were £225.6m (+10%) in line with our forecast (£225.6m) and company guidance.

Core MONY revenues grew +7% and 2H grew +9%.

MSE trading was very good (+10% yoy). * FY13A adj.

EBITDA was £84m (+26%) in line with our forecast and company guidance, with a margin of 37.2% as we forecast at 37.2% (FY12: 32.4%). * Net debt of £21m in line with MONY guidance at £21m. * DPS of 7.28p (27%) vs our 6.89p forecast on top of previous special 12.92p. * By division: Money FY sales at £52.1m, down 9% as forecast (3Q: -4%, 1H: 13%).

Insurance FY sales at £127.6m, up 6% as f/c (3Q: +2%, 1H: +11%).

Travel FY sales at £17.7m, +35% vs f/c +30% (3Q: +35%, 1H: +30%).

Home Services FY sales at £21.9m, +93% vs f/c +95% (3Q: +11%, 1H: +84%).
To access the full note please click here Analyst: Steve Liechti +44 (0)20 7597 5039
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