The economic downturn is having an effect on price comparison websites, with the reduced commission received by websites from loans or mortgages damaging their profits. Price comparison website Moneysupermarket.com suffered a 9 per cent slump in earnings after reportedly making almost no commission from its loan or mortgage customers in the final quarter of 2008.
A spokesperson for the company refused to confirm the claims of Numis Securities about the performance of what they call their Money division. The company does not publish quarterly results for each of its business units.
Analyst at Numis Securities, David McCann, said, ‘We estimate fourth quarter revenue came in at £9.5m, 45 per cent less than the third quarter and 52 per cent behind fourth-quarter 2007 numbers. We believe that the group generated almost no loans and mortgage commissions in fourth quarter resulting in this drop.’
Meanwhile, the company’s insurance division provided reasons for optimism, with a 10 per cent increase in revenue on the previous quarter, according to Numis. During 2008, the company’s insurance division provided 44 per cent of the company’s total revenue, up from 35 per cent in 2007.
Price Comparison Websites Suffering From Shortage of Loans Commission
Price Comparison Websites Suffering From Shortage of Loans Commission
Fri, 27 Feb 2009
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