Gocompare share price rises giving investors a reason to thank their lucky stars

 
Oliver Gill
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Gio Compario and Gocompare's advert's have boosted marketing margins

Shares in Gocompare rose by almost six per cent after the company reported a 22 per cent growth in half-year profits.

The figures

Revenue for the six months to 30 June was £75.8m, up four per cent on the prior year.

Adjusting operating profit rose 22 per cent to £17.5m.

The ratio of lending to earnings reduced to 1.5x, in other words the number of years it will take the firm to pay off its debts. This is a reduction from 1.7x at the end of 2016 and 2.8x at the time of the group's demerger from Esure in October 2016.

Read more: Who needs meerkats? Gocompare shares rocket on bumper trading

Why it's interesting

A lot is going on at the home of Italian-Welsh singing sensation Gio Compario. Last month, it unveiled an agreement to expand its targeted comparison services within Haymarket Media Group's car media franchises.

The firm has invested in robo-tech. Last month it bought a minority stake in Mortgage Gym Limited, a digital mortgage robo-adviser, which plans to launch its new platform in September 2017.

Hargreaves Lansdown equity analyst Nicholas Hyett noted that revenue growth was slower in the second quarter than in the first.

“Gocompare is taking a deep breath before launching into the next verse," he said.

"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 to see what the year’s second act brings.

What the company said

Gocompare chief executive 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 per cent increase in adjusted operating profit delivered in the first half."

He added: "The new executive team have delivered significant improvements in speed and capacity in the last six months, notably in the technology and product functions. I am particularly pleased with the integration and performance of our existing talent, alongside new talent recruited in Newport.

"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."

Read more: GoCompare float is go after shareholders approve Esure demerger

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