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Thursday 26 June, 2008

Trading Statement

RNS Number : 5597X Group PLC
26 June 2008 Group PLC

26 June 2008 Group PLC ('' or the 'Group'), the UK's leading price comparison site, issued the following trading update relating to the six month period ending 30th June.

The Group commenced trading on 22 June 2007 and, accordingly presents its financial information on a pro forma basis to show what the financial results would have been had the Group in effect been trading since 1 January 2006 [1] [2]. The directors believe that this will allow users of the financial information to gain a better understanding of the underlying performance of the business. The interim and full year results will be presented on the same basis. The commentary below is based upon the pro forma results unless otherwise stated.

The financial results for the group for the first six months of the year are in line with the Board's expectations. Group revenues for the first half of 2008 are expected to be in the region of £100m, which represents a year on year increase in excess of 25%. Group EBITDA margins are expected to be in the region of 30% with the underlying UK EBITDA margins in excess of 32% broadly consistent with the second half last year.

Trading conditions in the Money vertical remained extremely challenging, especially in loans and mortgages which on a monthly basis continued to worsen throughout the second quarter. However we have continued to see strong growth in credit cards and savings. As a result the Group expects the Money vertical to deliver high single digit growth over the same period last year.

Revenues in the Insurance vertical are expected to be in the region of 50% ahead of the first half last year with good levels of growth across all channels. Growth rates in motor insurance the largest insurance channel, in particular, have held up extremely well in the face of significant increases in marketing spend from a number of other price comparison sites.

Revenues in the Travel vertical are expected to be in the region of 45% ahead of the same period last year. Growth has been strong across all channels with Package Holidays in particular performing well based on improvements to the core product.

Revenues in the Home Services vertical are expected to be in the region of 75% ahead of the same period last year with the Utilities channel continuing to drive the majority of the growth

Cost growth in the Group has been controlled and is in line with the Board's expectations for the first half of the year. In particular the Group has held its marketing budget firm in the face of some significant marketing expenditure by some other price comparison sites. The Board has taken the decision to scale down substantially its intermediary operation particularly the packaging business. The intermediary business is expected to generate approximately £4m of revenues in the first half of the year and does not make a positive contribution to Group EBITDA.

The board does not expect to see any significant growth in the cost base in the second half of the year.


Simon Nixon, chief executive of commented: 'The strength of our diversified strategy is really evident in the first half. The problems in the UK loan and mortgage markets are well documented and have naturally impacted our activities in that area. Nevertheless, that we expect to end the first half of the year broadly in line with our targets and with overall revenue growth in excess of 25% shows the underlying strength of our diversified business model.'

Interim results for the six months ended 30th June 2008 are due to be announced on 27th August 2008.

For more information, please contact:

Paul Doughty, chief financial officer, 07789 712787

Ian Williams, director of communications, 07515 329671

Tulchan Communications

David Trenchard, 07771 867757

Susanna Voyle, 07980 894557

[1] Assuming a debt free acquisition of Financial Group Limited by on 1 January 2006, from which date intangible amortisation commenced, and a share option charge which reflects the average charge over the vesting period of currently unexercised options.

[2] Adjusted EBITDA is calculated by the directors by making certain adjustments to the historical compensation levels of the directors and senior managers, and share based bonus awards to employees on the listing of These adjustments reflect the directors' and senior managers' profit share, discretionary bonus and related employers' national insurance contribution. They also include charges relating to the issue of free shares to each eligible employee to the value of £3000, charges relating to the conditional share award made to Gerald Corbett on listing and charges related to share based compensation relating to options issued prior to listing. Following listing, these elements of compensation no longer apply at these levels.

This information is provided by RNS
The company news service from the London Stock Exchange