GoCompare sees profits halved in H1, hints at exploring new sectors

Aggregator GoCompare has posted solid half-year financial results for 2019, but has seen the group’s pre-tax profits halve.

The group posted steady and consistent revenue, but operating profit tumbled from £17.3m in H1 2018 to £9.5m in H12019.

And pre-tax profit fell by 52% in H1 2019 to £7.6m, from £15.9m in H1 2018.

According to the group’s financial statement, the cost of marketing the launch of subsidiary, weflip (£6.8m) and higher EBITDA costs of around £3.5m (H1 2018: £2m), were seen as the main cause of this fall in profits.

Price comparison stays steady despite downward trend

For the price comparison side of the business, revenues stayed the same, at around £72m, however 2019 is just slightly lower than 2018, which it puts down to “downward trend in car insurance premiums, leading to lower switching volumes.”

However, while premiums may have been down as well as interactions, revenue per interaction increased by 8% compared to H1 2018, primarily driven by an improvement in conversion but also higher income per transaction. 

GoCompare predicts that the market will soon switch again, with conversion rates and higher interaction on the horizon.

“With the launch of our new customer-led brand proposition to drive awareness and preference we are well placed for H2 and expect the car insurance switching market to return to growth.”

Move into new sectors?

When looking ahead to possible strategic development, it hinted at the possibility of entering more sectors of insurance, aside from motor and home.

It said: “The Group has an opportunity to grow the brand beyond motor and home insurance into other product and price comparison services and sectors.

“Overreliance on products or segments may lead to adverse financial performance.