Annual Results Announcement

RNS Number : 0971P

Moneysupermarket.com Group PLC

18 March 2009

 



18 March 2009

Moneysupermarket.com Group PLC annual results announcement 

for the year ending 31 December 2008 

Moneysupermarket.com Group PLC ('Moneysupermarket.com' or the 'Company'), the UK's leading price comparison website, is pleased to make its annual results announcement for the 12 months to 31 December 2008 as required by the Disclosure and Transparency Rules.

The financial results and commentary set out herein are the same as announced in the preliminary results announcement made on 25 February 2009 save that this announcement also includes the Chief Executive's Report, Principal Risks and Uncertainties, Statement of Directors' Responsibilities and details of related party transactions for the purposes of compliance with the Disclosure and Transparency Rules, and does not include the outlook or the financial and operational highlights from the preliminary results announcement.

Business Review 

Chief Executive's Report

In the year ended 31 December 2008, the Group has performed well despite the challenging trading conditions that have been driven by the tightening credit markets and downturn in the economy. Group revenue has increased year on year by 10% from £162.9m to £178.8m and the Insurance, Travel and Home Services verticals have all continued to grow helping to compensate for the decline seen in the Money vertical. 

Adjusted EBITDA declined in the year by 9% to £48.4m principally due to further investment in the Group's online offering and the increased customer acquisition costs in the Insurance vertical. The Group remained strongly cash generative and ended 2008 with no debt and the cash balance increasing during the year by £19.5m to £73.5m. We believe this demonstrates the resilience of our diversified business model in these difficult economic times. 

Insurance is now the largest vertical in the Group, accounting for 43% of Group revenue. Revenue grew in the year by 38% to £77.7m (2007: £56.4m) albeit at a slowing rate as the year went on. This was driven both by improved commercial arrangements with providers and increased visitor numbers that were 20% higher than in 2007. We maintained a strong market position in a sector which continued to show growth during the year despite the increasing level of competition from other online aggregators who spent significantly on television advertising and bid aggressively on search engines. We believe we still have the most complete insurance comparison engine in the UK offering our customers the widest choice of providers together with a very strong brand. 

During the course of 2008, and in particular in the second half of the year, the Money vertical felt the impact of the deepening global banking crisis. Revenue in the year declined by 10% to £68.3m (2007: £76.0m) as credit markets continued to tighten. With the UK consumer seeking to reduce debt and providers continuing to tighten their lending criteria, revenue declines were most notable in the loans and mortgages channels. Visitors to the Money vertical were however 27% higher in 2008 than in 2007 demonstrating the value of the website to our customers, particularly in times of uncertainty.

The impact of the credit crunch and the worsening economic conditions were particularly felt in the secured loans market which contracted substantially. In July, Barclays took the decision to close its subsidiary First Plus to new business with effect from August. First Plus had provided the Group with an exclusive market leading product and represented approximately 10% of Group revenue at the time it closed to new business. Although the Group was able to replace some of the revenue lost following the withdrawal by Barclays, the continued tightening of the supply of available credit throughout the year meant that revenue from secured lending in the second half of the year was significantly lower than the first half.

Savings showed the strongest growth in the Money vertical with revenue increasing by approximately 80% in the year as customers sought to spread their cash balances across a number of accounts to take advantage of the protection afforded by the Financial Services Authority Compensation Scheme, and to find the best returns as interest rates fell.

The Travel vertical performed well with revenue increasing in the year by 27% to £19.1m (2007: £15.0m). Growth slowed over the second half of the year as customers sought to reduce discretionary expenditure. Revenue growth was driven by increased visitors to the vertical which were 32% higher in 2008 than in 2007. 

The Home Services vertical delivered a strong performance in 2008 with revenue increasing 63% in the year to £7.4m (2007: £4.5m). For a large part of the year, utility prices were increasing, prompting customers to shop around for the best available deal. The Home Services vertical is now well established and experienced visitor growth in the year of 97%.

In September 2008 the Group launched its own shopping channel. Whilst the Group has had a shopping channel on the website for some time, this was previously provided by a third party. This limited the Group's ability to drive visitors to its website from search engines and therefore our ability to grow this channel. The Group now has its own product which gives an additional 75,000 pages to be indexed by search engines, enabling results from our shopping channel to appear in the natural listings on search engines, increasing revenue.

Mortgage 2000, the Group's offline business which specialises in supporting mortgage intermediaries continued to decline throughout the year reflecting the declining mortgage market. The Group is currently reviewing its options for this business.

The Group's strategy in 2008

Despite the current challenging economic conditions, the Group remains well placed to respond to the continuing structural shift in consumers' and providers' behaviour as consumers spend increasing amounts of time online and their confidence in, and familiarity with, transacting over the internet increases.

We believe the Group provides the largest and most effective price comparison marketplace in the UK, matching providers with customers who, having compared the market, are ready to make a purchase, thereby improving the focus and efficiency of providers' marketing spend.

The Group's strategy to capitalise on this structural shift has focused on three main areas in the last financial year:

Customer focus

The Group is committed to saving its customers time and money. This sits at the heart of the Group and its innovation and product development. Each new website development, new tool or new product that the Group launches is intended to save its customers time and money, support the customer in his or her purchasing decision or enhance the customer experience.

This constant focus on placing the customer first helps ensure that the Group remains at the front of customers' minds and is central to how the Group is run.

Innovation and product development

The Group has continued to invest in innovation and product development in 2008 and will continue to do so. Customers see the benefits of this innovation in enhanced website functionality, improvements in existing products and the addition of new products and features. This focus on innovation and product development ensures that the customer experience is continually enhanced and the Group remains their first choice for price comparison in the UK. By enhancing the customer experience and providing support to customers in their purchasing decision, providers benefit from increased conversion rates and a more efficient marketing spend.

Examples of new products and services introduced in 2008 include:

• The launch of a 'Policy Wizard' tool in motor insurance which enables customers to find the policy that exactly meets their needs and see prices update in real time. This significantly improves the usability of the motor insurance channel and will improve providers' conversion rates.

• The look and feel of the Travel website was refreshed to make it more inspirational; to really excite customers about the prospect of travelling or holidaying and to make it more intuitive to use. This was initially released to customers as an alternative or 'beta' version and will be fully live during 2009.

• The Group integrated hotel reviews from Trip Advisor and added far more photos, videos and content into its Travel website.

• The Group launched a new credit cards channel and enhanced the loans and savings channels, both of which now include expert, video and user reviews, all substantially improving the customer experience.

• The Group extended the question set within its motor and home insurance channels to enable customers to obtain a more tailored quote for their personal circumstances.

• In September 2008 the Group launched its own shopping channel. This channel is already performing well and the Group is planning to further improve its functionality to make it a market leading proposition.

Brand awareness

Marketing and PR drive new customers to the Group's website and ensure that the Group remains at the front of customers' minds. The Group has continued to invest heavily in its brand as part of a highly focused marketing strategy. This has helped the Group to increase the number of visitors attracted to its website by 32% to 120.1m (2007: 91.0m) and has helped to ensure the Group remains the UK's leading price comparison website. The success of this strategy is reflected in the increased online brand recognition of moneysupermarket.com to 80% in September 2008 from 73% in November 2007. 

The Group continues to supply best buy tables to the personal finance sections of a number of national newspapers including The Telegraph, The Times and The Independent and in 2008 spent £19.0m on television advertising (2007: £17.0m). With increased competition from other online aggregators, most notably in motor insurance, the Group's brand remains one of its most important and valuable assets.

Simon Nixon

 

Before I outline the Group's strategy in 2009, I would like to thank Simon for his help and support during my transition to Chief Executive Officer. I very much look forward to working with him in his new role, where he will continue to drive product development and innovation across the Group. 

The Group's strategy in 2009

Simon's Chief Executive Report described the Group's strategy during 2008 and in particular the focus on customers, innovation and product development, and brand awareness. 

These cornerstones of the Group's strategy in 2008, which have served the Group well in its development and growth to date, will continue to form a major part of the plans for 2009. However, the unprecedented global financial crisis and the subsequent UK recession means the Group faces a very different marketplace to that which it has encountered in the past. 

Our immediate task is to reconfigure our business for the lower levels of demand we are seeing due to the recession and to concentrate on managing our existing business better. 2009 will be a difficult year and we cannot assume 2010 will be any easier. More so now than ever, the Group must remain flexible and responsive to the changing market conditions and changing customer needs.

Accordingly, the Group's priorities for 2009 will focus on the following areas, each of which interacts with the other as part of an overall strategy:

Marketing 

moneysupermarket.com and travelsupermarket.com are both market leading brands, with online brand recognition at their highest ever levels as a result of the major marketing and PR investment by the Group over the past three years. In 2009, the Group will continue to invest significantly in its brands and will focus on building more innovative and effective communication with its customers. Making the marketing investment and the Group's brands work harder will be a major challenge for the business this year as we seek to optimise our marketing spend.

Innovation and product development

Continued innovation and product development remain key to the Group's strategy in spite of the downturn. Customers are already benefiting from a more personalised search capability across the website, in the form of customer reviews, richer content and smart search tools and wizards. Such innovations not only save customers money but also time. 

The Group will continue to focus in 2009 on innovation and product development with the aim of saving customers more time and money. The Group will also invest in developing its existing systems, both to simplify the customer proposition and to make more of what the Group already has. 

The Group will further look at and test innovative new opportunities to utilise and leverage its core price comparison competencies in markets different to those in which the Group currently operates. 

Insight led

The Group will focus in 2009 on using its data better and developing tools and capabilities from which it can drive decision making. In a challenging market, it is essential that as an online business the Group uses every piece of information effectively.

As the Group becomes more analytical in its approach, the insight and knowledge it gathers about its business, customers and providers will enable the Group to optimise its decision making and to monitor its performance against its goals. This will ensure the Group is able to manage its business better in the short, medium and long term.

Customer focus

Saving customers time and money remains at the very heart of the Group's philosophy and the Group will continue to focus on this during 2009 and beyond. The Group has started to build a single base of customer knowledge, and as a business, recognises the need to be much more inquisitive about customer behaviours and attitudes so that the Group can respond to them with better service and more tailored products. 

As the UK continues in recession and customers need to find more ways to save money, the Group's focus on customers will be more important than ever.

Outlook in 2009

The short term outlook is not good. Revenue to date this year is significantly down on last year, entirely due to the recession. We will manage ourselves accordingly.

However, the Group has many important strengths, including a diversified business, market leading brands, high brand recognition with customers and a motivated workforce. I am confident that the successful execution of the Group's strategy in 2009 will position the business for long term sustainable growth.

Peter Plumb

Financial and Business Review

Moneysupermarket.com Group PLC (the 'Company') was formed as a new holding company on 14 March 2007 and it acquired Moneysupermarket.com Financial Group Limited and its subsidiaries (together the 'Group') on 22 June 2007. Revenue in 2008 was £178.8m (2007: £88.3m), and after an impairment charge of £70.0m, generated a net loss after tax of £59.1m (2007: profit £9.4m). 

The Group has presented below an Adjusted Income Statement for the years ended 31 December 2008 and 31 December 2007 to show what the financial results would have been had the Company acquired Moneysupermarket.com Financial Group Limited on 1 January 2006. The Directors believe that this will allow users of the financial information to gain a better understanding of the underlying performance of the business. This is consistent with the presentation made last year. The Adjusted Income Statement forms the basis of the commentary contained in the Business Review presented below unless otherwise stated. 

Adjusted Income Statement 

for the year ended 31 December 2008 

	Actual 2008 £000	Pro Forma 2007 £000
Revenue	178,800	162,882
Internet	172,532	152,220
Intermediary	6,268	10,662
Cost of sales	(62,064)	(54,268)
Gross profit	116,736	108,614
Distribution expenses	(21,618)	(19,640)
Administrative expenses - excluding Directors' and senior managers' profit share and discretionary bonuses, and share based compensation	(75,310)	(62,837)
Administrative expenses - Directors' and senior managers' profit share and discretionary bonuses	-	(4,967)
Administrative expenses - share based compensation	(4,325)	(4,433)
Administrative expenses - impairment of goodwill	(70,000)	-
Administrative expenses - total	(149,635)	(72,237)
(Loss)/profit from operating activities	(54,517)	16,737
Adjusted EBITDA
(Loss)/profit from operating activities	(54,517)	16,737
Directors' and senior managers' profit share and discretionary bonuses	-	4,967
Share based compensation	4,163	4,433
Amortisation of intangible assets	25,200	25,200
Impairment of goodwill	70,000	-
Depreciation	3,543	1,612
Adjusted EBITDA	48,389	52,949
Adjusted earnings per ordinary share:
-     basic	6.9p	7.5p
-     diluted	6.8p	7.3p

Notes to the Adjusted Income Statement

Basis of preparation 

The adjusted results show the trading results of the Group for the years ended 31 December 2008 and 31 December 2007 adjusted for the following assumptions: 

• The acquisition of Moneysupermarket.com Financial Group Limited by the Company occurred debt free on 1 January 2006.

• The charge for share options is the average expected charge over the vesting period of options still to be exercised following the listing of the Company on 31 July 2007. 

Adjusted basic and diluted earnings per ordinary share figures which have been included are based on an adjusted net profit figure assuming that the number of ordinary shares and options in issue at 31 December 2007 had been in issue since 1 January 2007. Options and shares issued since 28 December 2007 have been included in the adjusted diluted earnings per share calculation on a pro rata basis. The adjusted earnings per share calculations assume a 30% tax rate for 2007 and a 28.5% rate for 2008. 

The Directors regard an adjusted EBITDA figure as being the most meaningful profit measure for this period. The following adjustments have been made to the Adjusted Income Statement: 

• The acquisition of Moneysupermarket.com Financial Group Limited by the Company gave rise to £207.2m of intangible assets. These are to be written off over a period of 3-10 years with a charge of £25.2m per annum to be recorded in each of the first three years. This has been shown within administrative expenses as a charge of £25.2m in the 2008 and 2007 Adjusted Income Statement. 

• With effect from the listing of the Company on 31 July 2007, Directors' and senior managers' compensation was revised and the individuals entered into new service agreements. Directors' and certain senior managers' profit share, discretionary bonus and employer's national insurance contributions have been added back in calculating adjusted EBITDA in 2007 to reflect the fact that following the listing on 31 July 2007 these elements of compensation no longer apply to these individuals. No adjustments are required for the year ended 31 December 2008. 

• Share option charges relating to options granted to Directors, senior managers and other employees of the Group before the listing of the Company on 31 July 2007 have been added back to calculate adjusted EBITDA. Prior to the acquisition of Moneysupermarket.com Financial Group Limited by the Company, Moneysupermarket.com Financial Group Limited issued share options to employees on terms that will not be offered moving forwards. On listing, the Company also issued 'free' shares to the value of £3,000 as a 'bonus' to each eligible employee as part of its Share Incentive Plan scheme. On listing, the Company also entered into an agreement with Gerald Corbett under which Gerald Corbett purchased 117,647 ordinary shares in the Company and provided he completes three years service as Chairman of the Company from listing and he retains the ordinary shares he purchased, he will be entitled to subscribe at nominal value for 235,294 ordinary shares in the Company. 

• The Company made conditional share awards under the terms of the Company's Long Term Incentive Plan on 28 December 2007 and on 4 March 2008. 

• The Group has performed an impairment review during the year resulting in an impairment charge against goodwill of £70m which has been added back to calculate adjusted EBITDA. 

Overview of financial performance 

Revenue grew by 10% to £178.8m (2007: £162.9m) and adjusted EBITDA fell by 9% to £48.4m (2007: £52.9m). The internet business generated £172.5m of revenue representing an increase of 13% on 2007. Revenue growth was impacted by the credit crunch which reduced the supply of credit to the market in general and reduced revenue year on year in the Money vertical. Revenue in all of the other internet verticals grew compared with last year. The intermediary business generated £6.3m of revenue representing a decrease of 41% on 2007. The intermediary business also suffered as a result of lower lending volumes in the UK mortgage market. The Group is currently considering a number of options in respect of the intermediary business. 

Gross margins fell slightly compared with last year from 67% to 65%. Gross margins benefited from a favourable sales mix, as the lower margin intermediary business contributed 3% of Group revenue in 2008 compared to 7% in 2007. The Group was able to maintain its direct-to-site revenue as a proportion of total revenue over the period. During the third quarter customer acquisition costs increased substantially in the Insurance vertical which reduced gross margins overall. However these returned to more normal levels in the fourth quarter.

The adjusted cost base before depreciation increased by 23% from £55.7m to £68.4m. Distribution costs, which consist primarily of TV advertising, increased by 10% on last year at £21.6m. Although the Group advertised across all of its verticals, more of the spend was targeted at Insurance, this being both the most competitive market segment and the fastest growing in absolute terms. 

The Group has further strengthened its online brand recognition which increased to 80% in 2008 as measured by a YouGov survey regularly commissioned by the Group. 

Adjusted administrative expenses increased by 34% over the period. Total adjusted staff costs increased by £7.6m to £30.4m in 2008. The Group reduced its permanent headcount over the period, and particularly the second half of the year, from 647 to 555 reflecting declining revenue in the Money vertical and a downsizing of the workforce in the intermediary business. The Group invested approximately £3.3m in third party resource in the Money vertical to transfer its technology from ASP to ASP.net to ensure its core technology remained current and 'supported' by Microsoft and to improve the look, feel and functionality of a number of the key channels. This work was completed in the fourth quarter of 2008. 

Other administrative costs, including irrecoverable VAT, increased by £3.0m accentuated by a change in sales mix towards sales which were exempt from VAT, notably insurance, together with the introduction of a second data centre to provide business continuity management capability in the first quarter of 2008. 

The Group reshaped its operations in Germany and invested £2.2m in 2008 against £0.7m in 2007, launching operations in the Money vertical in January 2009 through the website marktvergleich.de. 

Adjusted EBITDA margins fell from 32% in 2007 to 27% in 2008.

The Group operates two different business segments in the UK (internet and intermediary). The internet business operates across four vertical markets. These are discussed below: 

			Revenue
	31 December 2008			31 December 2007
	£000	%		£000	%
Money(1)	68,265	38		75,996	46
Insurance(1)	77,739	44		56,436	35
Travel	19,089	11		15,004	9
Home Services	7,416	4		4,540	3
Other - UK	23	0		87	0
Total internet UK	172,532	97		152,063	93
Germany	-	0		157	0
Total internet	172,532	97		152,220	93
Intermediary	6,268	3		10,662	7
Total	178,800	100		162,882	100

Internet business 

The UK internet business accounted for 97% of Group revenue in the year ended 31 December 2008. The Directors use key performance indicators ('KPIs') to assess the performance of the internet business against the Group's strategy. These are reviewed on a regular basis. The principal KPIs for the internet business are as follows: 

Visitors 

The Group measures the number of visitors to its website as the number of unique visitors per day per channel, measured on a cumulative basis using cookie-based tracking methodologies. 

Transactions 

The Group measures transactions at the point in time that the customer leaves the Group's website having clicked through to a third party website, or in some cases having completed an application form hosted on the Group's website. 

Revenue per visitor ('RPV') 

The Group measures the total revenue (including click and other internet revenue) divided by the number of visitors defined above. 

Revenue per transaction ('RPT') 

The Group measures the click based revenue divided by the total number of transactions defined above. 

The relative performance of each of the internet verticals is discussed below: 

Money 

The Money vertical currently offers customers the ability to search for, and compare, products for, amongst other things, business finance, credit cards, current accounts, mortgages, loans, debt solutions and savings accounts. It also includes elements of the Group's lead business (PAA) and advisory business (MCAT) together with advertising revenue that derives from financial products. 

The KPIs for the Money vertical are shown below: 

	31 December 2008	31 December 2007	Change
Visitors (000)(2)	35,131	27,676	27%
Transactions (000)	15,003	12,557	19%
Revenue (£000) - click based revenue	57,372	60,779	-6%
Revenue (£000) - other(1)	10,893	15,217	-28%
Revenue (£000) - total	68,265	75,996	-10%
RPV	£1.94	£2.75
RPT	£3.82	£4.84

Total revenue in the Money vertical decreased by 10% from £76.0m to £68.3m and click based revenue by 6% from £60.8m to £57.4m. Visitor growth of 27% has been offset by a decline in RPV of 29% in the year. The Group noted during the year, and in particular the second half of the year, that lenders significantly tightened their lending criteria. Indeed a number of providers withdrew from the market completely as the credit crunch began to deepen, reducing the supply of available credit. This impacted all of the credit based channels but most markedly the secured loans channel, which also suffered as home equity declined with the falling housing market. First Plus, a subsidiary of Barclays, which was the Group's largest single provider by revenue in 2007 closed to new business in August 2008. First Plus represented approximately 10% of Group revenue at the time it closed to new business. 

Revenue generated from savings grew significantly year on year as customers sought both to maximise their returns on investments and reduce exposure to individual banks amidst the uncertainty that arose following the collapse of a number of financial institutions. The overall impact of the change in sales mix away from debt products towards savings products, together with the reduced availability of credit, was to reduce the average RPT and consequently RPV.

Other revenue, which includes revenue from the sale of leads through PAA, commission based sales through MCAT for mortgages and loans, and advertising revenue, declined 28% over the year. Leads and commission based revenue fell in line with the declining credit markets. Revenue from advertising declined relative to 2007 following a deliberate reduction in the space made available for impression-based advertising, aimed at improving the user experience on the website. 

Insurance 

The Insurance vertical currently offers customers the ability to search for, and compare, insurance products for, amongst other things, breakdown, dental, home, life, medical, mortgage payment protection, motor, payment protection, pet and travel insurance. It also includes elements of the Group's lead business (PAA) and advisory business (MCAT) together with advertising revenue that derives from insurance products. 

The KPIs for the Insurance vertical are shown below: 

	31 December 2008	31 December 2007	Change
Visitors (000)(2)	24,830	20,677	20%
Transactions (000)	15,385	13,291	16%
Revenue (£000) - click based revenue	66,614	46,674	43%
Revenue (£000) - other(1)	11,125	9,762	14%
Revenue (£000) - total	77,739	56,436	38%
RPV	£3.13	£2.73
RPT	£4.49	£3.51

Total revenue in the Insurance vertical grew by 38% from £56.4m to £77.7m and click based revenue by 43% to £66.6m. RPT increased by 28% to £4.49 as a number of contracts with providers were migrated from a pure cost per click to a cost per action arrangement over the course of 2007 and 2008. This has allowed the Group to benefit from improved conversion rates as a result of better search functionality on its website and improvements made to provider websites. A number of significant enhancements to the website were made in the fourth quarter including the launch of the 'Policy Wizard' in motor insurance, which enables customers in real time to make changes to policy details and compare the impact this has on pricing across multiple providers simultaneously. It is anticipated that the Group will continue to benefit from these improvements in 2009. Other revenue increased by 14% to £11.1m over the period. 

The insurance comparison market remains the most competitive that the Group currently operates in. Advertising and in particular television advertising spend in the insurance comparison market increased significantly over the period. In response to this, the Group increased its spend in the Insurance vertical to protect its market share whilst only marginally increasing Group television advertising spend over the prior year. Customer acquisition costs from search engines also increased significantly in the third quarter which is traditionally a competitive period for the motor insurance industry. Customer acquisition costs returned to more normal levels in the fourth quarter. The increased marketing expenditure in 2008 lowered the relative contribution in the Insurance vertical compared to 2007. 

Travel 

The Travel vertical currently offers customers the ability to search for, and compare, amongst other things, airport parking, car hire, flights, hotels and package holidays. 

The KPIs for the Travel vertical are shown below: 

	31 December 2008	31 December 2007	Change
Visitors (000)(2)	48,924	36,964	32%
Transactions (000)	38,149	30,636	25%
Revenue (£000) - click based revenue	16,818	13,080	29%
Revenue (£000) - other	2,271	1,924	18%
Revenue (£000) - total	19,089	15,004	27%
RPV	£0.39	£0.41
RPT	£0.44	£0.43

Total revenue in the Travel vertical grew by 27% from £15.0m to £19.1m and click based revenue by 29% from £13.1m to £16.8m. Visitors grew by 32% over the period whilst RPV fell by 4%. Revenues from the flights channel were impacted in the year by the continued popularity of the low cost branded carriers, a number of which do not pay commissions to the Group. 

Revenue growth slowed in the second half of the year as customers began to reduce their levels of discretionary spend. This impacted the flights and hotels channels in particular. Package holidays and car hire revenue continued to grow strongly throughout the period. Other revenue grew 18% to £2.3m driven by increased visitor numbers. 

The Group ceased television advertising activity for the Travel vertical for the majority of the second half of the year in response to the weakening market conditions and only recommenced activity in the post Christmas period. Full year television advertising expenditure for the Travel vertical was £2.2m lower than the previous year. 

Home Services

The Home Services vertical offers customers the ability to search for, and compare, products for broadband, mobile telephones, shopping and utilities. 

The KPIs for the Home Services vertical are shown below: 

	31 December 2008	31 December 2007	Change
Visitors (000)(2)	11,245	5,721	97%
Transactions (000)	2,891	1,699	70%
Revenue (£000) - click based revenue	7,297	4,345	68%
Revenue (£000) - other	119	195	-39%
Revenue (£000) - total	7,416	4,540	63%
RPV	£0.66	£0.79
RPT	£2.52	£2.56

Total revenue in the Home Services vertical grew by 63% from £4.5m to £7.4m. Revenue grew particularly strongly in the utilities channel aided by the rising prices in the electricity and gas markets. The Group's shopping channel launched in September 2008 and this helped drive the significant year on year increase in visitors of 97% to the Home Services vertical. RPV and RPT are significantly lower in shopping than the other channels in the Home Services vertical and the change in sales mix has resulted in a fall in both KPIs compared with 2007. 

Germany 

During 2008 the Group refocused its operations in Germany. Launched in October 2007, the German operation originally concentrated on motor insurance using a third party provided solution to test the market. Whilst the initial reaction from customers was broadly positive, the third party technology was not sufficiently flexible to allow rapid development, particularly to the front end customer offering, and was therefore discontinued. The Group invested in its own proprietary technology in the second half of 2008 developing a loans channel which commenced trading in January 2009 at marktvergleich.de.

Acquisition of Moneysupermarket.com Financial Group Limited 

On 22 June 2007 the Company, at that time controlled by Simon Nixon, purchased the entire issued share capital of Moneysupermarket.com Financial Group Limited. This was funded partly by a cash payment of £162m to one of the founder shareholders, Duncan Cameron, and partly by a share-for-share exchange. This transaction has had a number of impacts on the Financial Statements and will also impact on subsequent periods. 

Goodwill and intangibles 

The acquisition of Moneysupermarket.com Financial Group Limited gave rise to £125.0m of goodwill and the recognition of £207.2m of intangible assets. Individual intangible assets are amortised over their useful lives (which are in the range of 3-10 years) with a charge of £25.2m per annum in the first three years in the full year accounts. A charge of £13.3m has been included in the accounts covering the period from 22 June 2007 to 31 December 2007, and a full year's charge of £25.2m has been included in the Adjusted Income Statement for the years ended 31 December 2008 and 31 December 2007 and the Statutory Income Statement for the year ended 31 December 2008. 

On an annual basis, or where an indication exists, the Group is required to assess its goodwill and intangible assets for impairment. For the current period, the recoverable amount of the assets was taken to be their value in use, and this was calculated by reference to the cash flows taken from the Group's forecasts, discounted to their present value by a discount rate reflecting not only the time value of money but also additional risks specific to the Group and the industry in which it operates, and the limited visibility inherent in the current economic environment. 

As a result of this exercise, the Group concluded that it should recognise an impairment charge against goodwill of £70.0m in 2008, reducing the carrying value of the goodwill balance to £55.0m. No impairment was deemed necessary against the other intangible assets. 

Treasury and funding

The Company raised £180m from the proceeds of the listing on 31 July 2007. Approximately £178m of the proceeds raised were used to fund the costs of the acquisition by the Company of Duncan Cameron's shares in Moneysupermarket.com Financial Group Limited including all related costs and expenses of the acquisition, the raising and draw down of debt finance and the costs of the listing. The Company acquired £14.3m of cash at the acquisition and has continued to generate cash from operations. The Company had cash balances of £73.5m at 31 December 2008 and no debt. The Company has invested its cash over the period predominantly in instant access cash deposits and short-term deposits of no more than three months, and in light of the events which occurred in the banking sector over the past year, now holds balances with a larger range of different UK and Irish institutions. As such the interest earned has closely followed movements in the Bank of England base rate. 

Dividend 

The Directors have adopted a progressive approach to dividend payout and initially had a dividend payout of approximately one third of adjusted net profit each year, with one third of the annual amount payable as an interim dividend and two thirds as a final dividend. The Group announced on 27 August 2008 following a review of its cash position that it would increase its annual dividend payout to approximately one half of adjusted net profit, to be paid on a broadly similar basis. 

The Board is recommending a final dividend, subject to shareholder approval, consistent with the policy above in respect of the year ended 31 December 2008. This equates to £11.1m and represents 2.2p per ordinary share. Together with the interim dividend of 1.3p per ordinary share paid on 17 October 2008, this gives a total dividend for the year of 3.5p per ordinary share. The total cost of the dividend for the financial year will be £17.6m. The ex-dividend date for the final dividend is 25 March 2009, with a record date of 27 March 2009 and a payment date of 1 May 2009. Shareholders have the opportunity to elect to reinvest their cash dividend and purchase existing shares in the Company through a Dividend Reinvestment Plan. 

Tax 

The Group tax charge of £8.1m in the Income Statement represents an effective tax rate of -16%. This is significantly below the prevailing rate for the period of 28.5%. The current year has been impacted by a number of items. The Group has disallowable expenses in the year of £76.0m (including £70.0m of goodwill impairment), and a further £1.2m of losses have arisen in the year relating to the German operation, for which a deferred tax asset has not been recognised. The Group has also recognised a deferred tax charge of £2.5m representing the revaluation of the deferred tax asset held in relation to share options. In future, the Group expects the underlying effective rate of tax to revert to close to the standard UK corporation tax rate of 28%. 

Loss per ordinary share 

Basic statutory loss per ordinary share for the period to 31 December 2008 was 11.8p (2007: earnings per share of 3.0p). Adjusted basic earnings per ordinary share decreased from 7.5p to 6.9p per share. The adjusted earnings per ordinary share is based on adjusted EBITDA after deducting depreciation and adding estimated interest income for each period to calculate an adjusted profit before tax. A tax rate of 28.5% (2007: 30%) has been applied to calculate adjusted profit after tax. 

Notes:

 1. During 2008 the Group undertook an exercise based on additional information made available to it to reallocate impression-based advertising revenue between the Money and Insurance verticals in 2007 consistent with the results presented for the year ended 2008. As a result of this exercise £2.0m previously shown in the Money vertical in other revenue has been reallocated and recorded in other revenue in the Insurance vertical in respect of the year ended 31 December 2007. 

2. As noted in the prospectus issued in connection with the listing of the Company on 31 July 2007, the Group's visitor numbers during the period between January and May 2007 were understated due to certain visitors not being assigned a unique global user ID. The issue was resolved in May 2007 and has not impacted visitor numbers in the Insurance vertical after May 2007. The Group has not been able to quantify the exact extent of the understatement.

The Group recorded a substantial increase in its reported visitors from 27 April 2008 to the end of June 2008 following a release made in respect of the anti-virus software AVG. In assessing whether a webpage was safe it 'followed' every link or url displayed on an email or webpage to the destination website. This meant that many web based businesses including the Group recorded visitors from users of the AVG software who themselves did not technically visit the website. The 2008 visitor count has been adjusted for the estimated impact of this. AVG released a further update to its anti-virus software in early July 2008.

Statement of Directors' responsibilities pursuant to Disclosure and Transparency Rules 

Each of the Directors, whose names and functions are listed below, confirms that, to the best of his or her knowledge:

• The financial statements, which have been prepared in accordance with the applicable set of accountancy standards, give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company and the undertakings included in the consolidation taken as a whole.

• The business review includes a fair review of the development and performance of the business and the position of the Company and the undertakings included in the consolidation taken as a whole, together with a description of the principal risks and uncertainties that they face.

Name	Function
Gerald Corbett	Chairman
Simon Nixon	Deputy Chairman
Peter Plumb	Chief Executive Officer
Paul Doughty	Chief Financial Officer
David Osborne	Marketing Director
Graham Donoghue	Managing Director, Travel
Michael Wemms	Senior Independent Non-Executive Director
Rob Rowley	Non-Executive Director

Principal Risks and Uncertainties

Below is a summary of the material operational and financial risks to the Group and how the Group seeks to mitigate them in the day-to-day running of the business.

Financial risks

Significant worsening in credit markets

Potential impact 

Financial institutions may reduce the quantum of lending and tighten their acceptance criteria for customers seeking to obtain credit. This may reduce Group revenue. Providers may increase their focus on customer retention and not acquisition. This may reduce commissions available to price comparison websites.

Mitigation

The Group has invested heavily in its Smart Search technology which matches customers with providers offering products that are suitable to their particular credit circumstances. This enables the results and information presented to customers to reflect price for risk and reflects lenders' appetites to lend to different customer risk categories, increasing the relevance of the results presented, helping to protect Group revenue.

Significant consolidation of providers

Potential impact 

Consolidation of providers may continue in response to the poor credit markets. This may reduce competition for business with customers having less choice and may reduce commissions available to price comparison websites. 

Mitigation

The Group will continue to improve its search functionality and deliver new relevant customers to providers at demonstrably lower acquisition costs compared with other media.

Security of cash balances

Potential impact 

The Group holds significant cash balances. A failure of a major financial institution with whom the Group places significant deposits may result in a material loss to the Group.

Mitigation

The Group has diversified its cash holdings across a number of institutions. At the end of 2008, the Group held cash balances with five financial institutions with a maximum balance of £31.5m with any one institution.

Revenue assurance

Potential impact 

Reduction of or a failure to recognise revenue from contracted providers where the Group is remunerated on a cost per action basis.

Mitigation

The Group will continue to perform independent reviews using third parties to gain assurance that the Group is being correctly remunerated for the sales it introduces to contracted providers.

Investment in new areas

Potential impact 

Capital invested in new products and services or new geographies fails to make a return.

Mitigation

Investments in new areas typically leverage existing expertise and experience built up over many years. Capital requirements are relatively low and investment is managed in stages such that it is not finally committed until there is good visibility of a return.

Financial services and other markets regulation and taxation

Potential impact 

The business model in financial services or other lines of business may be compromised by changes to existing regulation or the introduction of new regulation, or changes to the tax legislation, particularly value added tax.

Mitigation

The Group has a team of regulatory specialists who work with the business to ensure that it remains compliant with existing regulation and informed of impending regulation. The Group has embraced regulation to date and shares the vision of the regulators generally to make the market more transparent to the end customer.

The Group continues to monitor ongoing European Union developments in respect of the review of the provision of financial intermediary services with regard to value added tax and any relevant case law in this area as it emerges.

Operational risks

Competitive environment

Potential impact

Loss of market share and erosion of margins from increased competition.

Mitigation

The Group continues to focus on building market leading products to improve its proposition to customers. This includes investment in customer retention tools and technology including CRM initiatives which deliver additional features and functionality to customers.

Brand perception

Potential impact 

Reduction in customer loyalty with existing customers and an inability to attract new customers if the business fails to maintain its position as a leading price comparison website.

Mitigation

Continued investment in television advertising reinforced through press activity will maintain the Group in customers' minds. Rigorous checking of the website through audit and review will maintain the accuracy of the information displayed. Additional investment in initiatives increases transparency to the customer helping to protect brand values. 

Capacity and functionality of IT and systems infrastructure

Potential impact  

Failure to provide adequate service levels to customers or maintain revenue generating services.

Mitigation

The Group maintains two separate data centres with n + 1 redundancy in relation to its core infrastructure to ensure that service is maintained in the event of a disaster at the primary data centre.

Retention of key management

Potential impact  

Lack of necessary expertise or continuity to execute strategy.

Mitigation

Existing key management and new hires are tied in through attractive equity incentive packages and rewarding career structures. 
In addition succession plans are being developed in 2009 for key members of the management team which will be regularly reviewed.

Reliance on search engine paid search and natural listings

Potential impact  

Reduction in gross margin through reduction in revenue derived from search engine optimisation or failure to manage search engine marketing campaigns appropriately.

Mitigation

The Group will continue to invest in sustainable search engine optimisation activities which adhere to search engine guidelines. A new software solution was introduced during the year to assist in managing the profitability of search engine marketing campaigns.

Economic environment

Potential impact  

Reduction in visitors and revenue from a recession as customers seek to reduce levels of discretionary expenditure.

Mitigation

The Group continues to focus on building a wide range of market leading products to meet customers needs. Customers seeking to reduce levels of discretionary expenditure will also be looking to obtain 'best' value from compulsory products and services. The diversification of the Group both in the number of verticals that it operates in and the range of products and services it provides in each vertical should lessen the impact of a recession upon the Group although it cannot entirely mitigate against it.

Group Income Statement

for the period ended 31 December 2008

	Year ended 31 December 2008	Six months and nine days ended 31 December 2007
	£000	£000
Revenue	178,800	88,314
Cost of sales	(62,063)	(29,057)
Gross profit	116,737	59,257
Distribution expenses	(21,618)	(10,332)
Administrative expenses - other	(79,635)	(37,817)
Administrative expenses - impairment of goodwill	(70,000)	-
Administrative expenses - total	(149,635)	(37,817)
Results from operating activities	(54,516)	11,108
Financial income	3,504	1,336
Financial expense	-	(4,894)
Net finance income/(costs)	3,504	(3,558)
(Loss)/profit before income tax	(51,012)	7,550
Income tax (charge)/credit	(8,094)	1,874
(Loss)/profit for the period	(59,106)	9,424
Attributable to:
Equity holders of the Company	(58,987)	9,472
Minority interest	(119)	(48)
(Loss)/profit for the period	(59,106)	9,424
(Loss)/earnings per share
Basic (loss)/earnings per ordinary share (pence)	(11.8)	3.0
Diluted (loss)/earnings per ordinary share (pence)	(11.8)	2.9

Group Balance Sheet

at 31 December 2008

	31 December 2008	31 December 2007
	£000	£000
Assets
Non-current assets
Property, plant and equipment	13,596	12,585
Intangible assets	223,653	318,853
Deferred tax asset	362	3,124
Total non-current assets	237,611	334,562
Current assets
Trade and other receivables	16,074	19,906
Prepayments	2,059	1,194
Cash and cash equivalents	73,465	54,015
Total current assets	91,598	75,115
Total assets	329,209	409,677
Liabilities
Non-current liabilities
Deferred tax liability	47,259	54,243
Current liabilities
Trade and other payables	20,710	25,681
Current tax liabilities	3,394	2,758
Total current liabilities	24,104	28,439
Total liabilities	71,363	82,682
Equity
Share capital	101	118
Share premium	171,047	170,565
Retained earnings	(20,042)	13,285
Other reserves	106,740	143,027
Total equity attributable to equity holders of the Company	257,846	326,995
Minority interest	-	-
Total equity	257,846	326,995
Total equity and liabilities	329,209	409,677

Group Statement of Changes in Equity

for the period ended 31 December 2008

	Issued share capital	Share premium	Other reserves	Retained earnings	Reserve for own shares	Foreign currency translation reserve	Total
	£000	£000	£000	£000	£000	£000	£000
Foreign currency translation(*)	-	-	-	-	-	9	9
Deferred tax recognised on share based payments	-	-	-	262	-	-	262
Profit for the period	-	-	-	9,424	-	-	9,424
Total income and expense for the period	-	-	-	9,686	-	9	9,695
Arising on acquisition of subsidiary	-	-	143,018	-	-	-	143,018
Issue of share capital	118	179,927	-	-	-	-	180,045
Transaction costs	-	(9,362)	-	-	-	-	(9,362)
Share-based payment	-	-	-	3,599	-	-	3,599
At 31 December 2007	118	170,565	143,018	13,285	-	9	326,995
Foreign currency translation(*)	-	-	-	-	-	(6)	(6)
Deferred tax recognised on share based payments	-	-	-	(209)	-	-	(209)
Loss for the period	-	-	-	(59,106)	-	-	(59,106)
Total income and expense for the period	-	-	-	(59,315)	-	(6)	(59,321)
Share options exercised	2	482	-	-	-	-	484
Purchase and cancellation of deferred shares	(19)	-	19	-	-	-	-
Equity dividends	-	-	-	(14,637)	-	-	(14,637)
Share-based payment	-	-	-	4,325	-	-	4,325
Reserves transfer	-	-	(36,300)	36,300	-	-	-
At 31 December 2008	101	171,047	106,737	(20,042)	-	3	257,846

Other reserves

The other reserves balance represents the merger and revaluation reserves generated upon the acquisition of Moneysupermarket.com Financial Group Limited by the Company and a capital redemption reserve for £19,000 arising from the acquisition of 95,294,118 deferred shares of 0.02p by the Company from Simon Nixon.

Foreign currency translation reserve

The translation reserve comprises all foreign currency differences arising from the translation of the financial statements of foreign operations.

Reserve for own shares

The reserve for the Company's own ordinary shares comprises the cost of the Company ordinary shares held by the Group. At 31 December 2008, the Group held 948,184 shares at a cost of 0.02p per share through a trust for the benefit of the Group's employees.

* Foreign currency translation represents the only income or expense for the current and prior periods recognised directly in equity.

Group Consolidated Cash Flow Statement 

for the period ended 31 December 2008

	Year ended 31 December 2008	Six months and nine days ended 31 December 2007
	£000	£000
Operating activities
(Loss)/profit for the period	(59,106)	9,424
Adjustments to reconcile Group net (loss)/profit to net cash flows:
Depreciation	3,543	908
Amortisation of intangible assets	25,200	13,325
Impairment of goodwill	70,000	-
Loss on disposal of property, plant and equipment	78	-
Net finance (income)/costs	(3,504)	3,558
Equity-settled share-based payment transactions	4,325	3,599
Income tax (charge)/credit	8,094	(1,874)
Change in trade and other receivables	2,890	2,541
Change in trade and other payables	(4,971)	(1,730)
Income tax paid	(11,894)	(6,254)
Net cash flow from operating activities	34,655	23,497
Investing activities
Interest received	3,581	1,336
Acquisition of subsidiary	-	(164,561)
Cash acquired with subsidiary	-	14,296
Acquisition of property, plant and equipment	(4,618)	(6,260)
Net cash flow from investing activities	(1,037)	(155,189)
Financing activities
Proceeds from share issue	484	179,951
Purchase of own shares	-	-
Costs from issue of shares	-	(9,362)
Proceeds from borrowings	-	150,000
Loan from a related party	-	20,000
Repayment of borrowings	-	(150,000)
Interest paid	-	(4,882)
Dividends paid	(14,637)	-
Net cash flow from financing activities	(14,153)	185,707
Net increase in cash and cash equivalents	19,465	54,015
Cash and cash equivalents at start of period	54,015	-
Effect of exchange rate fluctuations on cash held	(15)	-
Cash and cash equivalents at end of period	73,465	54,015

Notes:

1. Earnings per share

Basic earnings per share 

Basic earnings per share amounts are calculated by dividing profit for the year attributable to ordinary equity holders of the Company, by the weighted average number of ordinary shares outstanding during the period.

Diluted earnings per share

Diluted earnings per share amounts are calculated by dividing profit attributable to ordinary equity holders of the parent, by the weighted average number of ordinary shares outstanding during the period plus the weighted average number of ordinary shares that would be issued on the conversion of all dilutive potential ordinary shares into ordinary shares.

Earnings per share

Basic and diluted (loss)/earnings per share has been calculated on the following basis:

	2008	2007
	£000	£000
(Loss)/profit after taxation (for basic and diluted earnings per share)	(59,106)	9,424
Basic weighted average ordinary shares in issue (millions)	498.9	313.6
Dilutive effect of share based instruments (millions)	-	12.2
Diluted weighted average ordinary shares in issue (millions)	498.9	325.8
Basic (loss)/earnings per ordinary share (pence)	(11.8)	3.0
Diluted (loss)/earnings per ordinary share (pence)	(11.8)	2.9

2. Dividends

	2008	2007
	£000	£000
Declared and paid during the period:
Equity dividends on ordinary shares:
Final dividend for 2007: 1.63p per share	8,098	-
Interim dividend for 2008: 1.3p per share	6,539	-
Proposed for approval (not recognised as a liability at 31 December):
Equity dividends on ordinary shares:
Final dividend for 2008: 2.2p per share	11,107	-

3. Intangible assets

During 2007 the Group employed the services of an appropriately qualified and experienced independent third party to value the intangible assets acquired from Moneysupermarket.com Financial Group Limited. This valuation was used as the initial carrying value for these assets. Since the goodwill and intangibles have historically constituted approximately 90% of the Group's net assets balance, the Group has tended to use its quoted market price to provide assurance over the value, or indicate impairment of, its assets. At the balance sheet date and prior to any impairment, the market capitalisation of the Group represented 92% of the total carrying value of the goodwill and intangible assets (2007: market capitalisation exceeded carrying value by 70%). Whilst not directly comparable, the quoted market price acts as an indicator of impairment, and in light of this, the Group has performed a thorough assessment during the period to consider whether its non-current assets are impaired.

Impairment testing of goodwill

On an annual basis, or where an indication exists, the Group is required to assess its goodwill and intangible assets for impairment. Given the worsening economic conditions and the turmoil in the credit and wider financial markets, the impairment testing has been performed on the following basis.

For the current period, the recoverable amount of the assets was taken to be their value in use and was calculated by reference to the cash flows taken from the Group's forecasts as detailed below. 

For the purposes of impairment testing, the Group has one significant cash generating unit (CGU), the internet segment, to which all of the goodwill has been allocated. The segment is the lowest level at which goodwill is monitored for internal management purposes. The present value of its future cash flows has been calculated with the following key assumptions applied:

• Cash flows for year 1 represent management's best estimate of future cash flows as at 31 December 2008, and are based upon the Group's approved budget for 2009. The main assumptions underlying the 2009 budget relate to visitor numbers and revenue per transaction/visitor. The budget reflects the general downturn in the consumer economy and expected lower levels of credit available to consumers and lower levels of discretionary expenditure in general.

• Subsequent cash flows for future years assume 0% growth in earnings from those forecast for 2009. Management believe this reflects the tightening of lending criteria, withdrawal of products by providers, and the general downturn in the economy. No reliable third party estimates of long term growth rates exist, given it is a relatively new business model.

• Cash flows into perpetuity have been incorporated in the calculations.

• A pre-tax discount rate of 16% has been used in the forecast. This reflects the increased risk and uncertainty inherent in the current economic climate, the lack of confidence with which the near future can be forecast, and the additional risks specific to the Group and the industry in which it operates.

When the economy begins to recover a different set of assumptions may be more appropriate.

The analysis performed calculates the value in use of the internet segment as £237.2million, indicating that the segment's assets are impaired as follows:

	£000
Value in use of internet segment	237,249
Representing:
Carrying value of tangible non-current assets	(13,596)
Carrying value of other intangible non-current assets	(168,688)
Implied book value of goodwill	54,965
Carrying value of goodwill	124,965
Impairment of goodwill	(70,000)

An impairment loss of £70.0m has been recognised in the year and therefore there is no difference between the carrying amount and recoverable amount of the goodwill balance as at the balance sheet date. An increase of 1% in the discount rate, with all other assumptions held constant, would give rise to an additional impairment charge of £14.5m.  A decrease of 1% in the value of cash flows generated, with all other assumptions held constant, would give rise to an additional impairment charge of £2.4m.

Impairment testing of other intangible assets, property, plant and equipment

For impairment testing purposes, all of the Group's intangible, and other non-current, assets are also assigned to the internet segment. With reference to the testing described above, the value in use of £237.2m assigned to the internet segment indicates that neither the other intangible, nor other non-current, assets are impaired. At an individual level, management believe that the assumptions relating to each intangible asset remain applicable, and that no adjustment is required to their valuation, nor their useful economic life. 

4. Related party transactions

The Group has the following investments in subsidiaries:

	Country of incorporation	Ownership interest	Principal activity
Moneysupermarket.com Financial Group Limited	UK	100	Holding company
M2 Mortgage Club Limited	UK	100	Mortgage facilitators
Mortgage 2000 Design & Processing Limited	UK	100	Mortgage brokers and processors
Moneysupermarket.com Limited	UK	100	Internet price comparison
Travelsupermarket.com Limited	UK	100	Dormant
Insuresupermarket.com Limited	UK	100	Financial intermediary services
Mortgage 2000 Limited	UK	100	Financial intermediary services
Making Millionaires Limited	UK	100	Holding company
Moneysupermarket Limited	UK	100	Dormant
Icero GmbH	Germany	90	Internet price comparison
Foom.com Limited	UK	80	Social networking website
Inhoco 3429 Limited	UK	100	Dormant

The Company is the ultimate parent entity of the Group. Intercompany transactions with wholly owned subsidiaries have been excluded from this note, as per the exemption offered in IAS 24.

Transactions with key management personnel

There were no outstanding amounts loaned to Directors by the Company at 31 December 2008.

In addition to their salaries, the Group also provides non-cash benefits to Directors and executive officers. Executive officers also participate in the Group's share option programme.

During the year, Simon Nixon and Paul Doughty received dividends from the Group totalling £4,409,807 in relation to the year ended 31 December 2007, and £3,517,037 in relation to the year ended 31 December 2008.

On 21 May 2008, the Group purchased 95,294,118 deferred shares held by Simon Nixon for a consideration of £1.

Key management personnel compensation

Key management, defined as the executive management team, received the following compensation during the period:

	31 December 2008  (£000)	31 December 2007  (£000)
Short-term employee benefits	2,274	1,346
Share-based payments	2,820	2,375
Post employment benefits	9	2
	5,103	3,723

Other related party transactions

A number of Directors and key management personnel hold positions in other entities that result in them having control or significant influence over the financial or operating policies of these entities.

A number of these entities transacted with the Group in the reporting period.

  The aggregate value of transactions and outstanding balances relating to key management personnel and entities over which they have control or significant influence were as follows:

Director	Company	Transaction value Year ended 31 December 2008 (£000)	Transaction value Year ended 31 December 2007 (£000)	Balance Outstanding as at 31 December 2008 (£000)	Balance Outstanding as at 31 December 2007 (£000)
S J Nixon	Abacus Permanent Limited	53	333	(221)	(335)
S J Nixon	Virtual Processing Limited	238	602	216	(227)

The Group provides office space and services to Abacus Permanent Limited and Virtual Processing Limited, companies in which Simon Nixon controls over 90% of the voting shares. The Group recharges these two companies rent and associated services at the same levels as it recharges wholly owned subsidiary companies. These rates are based on notional open market rents for similar offices in the locality. In addition the Group provides payroll services for these related companies, fully recovering salaries paid. In the normal course of trade with these related companies the Group both charges and is charged for mortgage procuration fees. The level of these fees is at arm's length and mirrors the going rates in the open market.

The aggregate value of transactions and outstanding balances relating to Icero GmbH, which was not a wholly owned subsidiary of the Group at the balance sheet date, were as follows:

	Transaction value Year ended 31 December 2008 £000	Transaction value Year ended 31 December 2007 £000	Balance Outstanding as at 31 December 2008 £000	Balance outstanding as at 31 December 2007 £000
Icero GmbH	-	-	2,017	663

The minority interest share of the loss for the period was £118,500. No liability has been recognised in the balance sheet, as there is no requirement for the minority interest to fund their share of the losses.

On 6 September 2007, Tim Heidfeld was appointed a Director of Icero GmbH, a company that was at that time a wholly owned subsidiary of Moneysupermarket.com Financial Group Limited. On 27 December 2007, Moneysupermarket.com Financial Group Limited entered into a shareholder's agreement with Tim Heidfeld pursuant to which Moneysupermarket.com Financial Group Limited transferred to Tim Heidfeld 10% of the shares of Icero GmbH in consideration for the payment by Tim Heidfeld to Moneysupermarket.com Financial Group Limited of €2,500. The shareholder's agreement includes a contractual obligation on Moneysupermarket.com Financial Group Limited to acquire all the shares in Icero GmbH held by Tim Heidfeld during the period 2010 to 2012 in predetermined tranches. The consideration to be paid by Moneysupermarket.com Financial Group Limited for the acquisition of the shares in Icero GmbH held by Tim Heidfeld will be determined by the financial performance of Icero GmbH during the financial years 2009 to 2011. No liability has been recognised at the balance sheet date, as the consideration to be paid cannot be reliably measured. The contingent consideration will be recognised when payment becomes probable. According to the shareholder's agreement, the maximum consideration that can be paid by Moneysupermarket.com Financial Group Limited to Tim Heidfeld for the acquisition of his 10% shareholding in Icero GmbH is €12,500,000. For the achievement by Icero GmbH of financial performance less than the target financial performance, the consideration payable by Moneysupermarket.com Financial Group Limited to Tim Heidfeld for the acquisition of the shares held by him in Icero GmbH is determined by a formula set out in the shareholder's agreement. 

On 25 April 2008, Rob Budden was appointed a Director of Foom.com Limited. On that date, Rob Budden subscribed for 40 ordinary shares of £1 each in the capital of Foom.com Limited, representing 20% of the issued share capital of Foom.com Limited. On that date, Rob Budden entered into a shareholder's agreement with Making Millionaires Limited regulating their relationship as shareholders in Foom.com Limited.

Statutory Information

The financial information set out above does not constitute the Company's statutory accounts for the year ended 31 December 2008 but is derived from those accounts. The accounts for the year ended 31 December 2008 will be delivered to the Registrar of Companies following the Annual General Meeting. The Company's auditors, KPMG Audit Plc, have reported on the accounts for the year ended 31 December 2008 under section 235(1) of the Companies Act 1985 ('Act'). These reports were not qualified within the meaning of section 235(2) of the Act and did not contain statements made under section 237(2) and section 237(3) of the Act. The annual report and accounts for the year ended 31 December 2008 were posted to shareholders in March 2009. The results for the year ended 31 December 2008 were approved by the Board of Directors on 24 February 2009 and are audited. The Annual General Meeting will take place on 16 April 2009. The final dividend will be payable on 1 May 2009 to shareholders on the register at the close of business on 27 March 2009. Interim and preliminary announcements notified to the London Stock Exchange are available on the internet at www.moneysupermarket.com. 

The Annual Report for the year ended 31 December 2008 is available on the internet at www.moneysupermarket.com or upon request from the Company's registered office at Moneysupermarket House, St David's Park, Ewloe, Chester, CH5 3UZ. 

Cautionary note regarding forward-looking statements

This announcement includes statements that are forward looking in nature. Forward looking statements involve known and unknown risks, assumptions, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Except as required by the Listing Rules and applicable law, the Company undertakes no obligation to update, revise or adjust any forward looking statements to reflect events or developments occurring after the date such statements are published.

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END

 

 

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