Profits rise for GoCompare as degree programme launches

Profits rise for GoCompare as degree programme launches

The price comparison website reported a 20% rise in adjusted operating profit for 2017, in line with what analysts predicted, as marketing margins improved.

The news comes as the comparison heavyweight announces a pilot degree apprenticeship scheme with Aston University to develop future talent.

The comparison website saw revenues rise 5.1% in 2017 to £149.2m, while an improved marketing margin allowed underlying operating profits to rise 19.8% to £36m.

The board has announced a final dividend of 0.7p per share, taking the full year payment to 1.4p.

Nicholas Hyett, equity analyst at Hargreaves Lansdown, said of the announcement: “Agile is not a word that springs to mind with a company most closely associated with a slightly overweight tenor. However, that’s very much the order of the day at GoCompare.

“A focus on improving user experience has seen the group move from quarterly website updates to a stream of small tweaks every week.

“If all goes to plan that should keep the site moving forwards while avoiding expensive and risky overhauls where the benefits can be uncertain.”

Like other comparison websites, GoCompare spends heavily on marketing in order to attract and retain customers, making it a key area to target lowering costs.

Nicholas Hyett continued: “The group’s prodigious cash flow has seen leverage tumble despite the group embarking on a programme of strategic investments in small tech businesses both at home and abroad.

“A significant cash pile should allow it to move quickly as and when opportunities present themselves.

“One slight concern is that GoCo remains very reliant on insurance, accounting for 94% of total revenues.

“That’s not been a problem lately since higher insurance prices, particularly in motor, have provided an incentive for consumers to switch providers and use price comparison websites.

“However, it’s a cyclical market and when pricing tightens a highly concentrated customer base could leave GoCo stranded.

“Over time investments and strategic initiatives should reduce reliance on insurance, but on current trends that’s some way off.”

The company also recently announced a new technology degree apprenticeship with Aston University, representing an investment in talent for the business.

The pilot scheme will see up to five candidates enrolled onto a fully sponsored degree apprenticeship course funded by GoCompare with one of the UK’s top universities, alongside an apprenticeship role with the fintech company.

Aston University, based in Birmingham city centre, has over 100 years’ experience working in close partnership with enterprise, learners and communities to nurture professionals with relevant skills as well as knowledge that can be directly applied to business and industry.

In 2015 the university became the first in the UK to offer degree apprenticeships and is also the first to have alumni who graduated the Digital and Technology Solutions Degree Apprenticeship in July 2017.

Successful applicants will undertake an initial seven-week, full-time bootcamp with Aston University before starting a job in GoCompare’s industry-leading tech team, continuing their studies through a mixture of distance and classroom learning.

GoCompare will specifically look to collaborate with schools and colleges in South Wales to identify candidates for its degree apprenticeship programme, thereby giving opportunities to students who may otherwise not have had access to higher education through a traditional route.

Lee Griffin, founder and president of GoCompare, said: “We’re really excited to launch our degree apprenticeship scheme with Aston University.

“Our hope is that through working with higher education institutions, we can give students a chance to earn as they learn, providing them with both the theoretical knowledge and real-world experience they need to make a real impact and pursue valuable careers.

“This initiative is part of our on-going commitment to develop talent in our area, closing any diversity gaps, and putting South Wales on the map as a UK tech hotspot.

“With our degree-apprenticeship partnership with Aston University, our message to people is simple: if you have the ability and drive then we want you to help us build the future of fintech in the UK.”