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Annual report and accounts 2019
Helping households
save money
Strategic reportMoneysupermarket Group£2bnOur customers saved in 20191 2018: £2.1bn13.1mactive customers2018: 12.9m74Net Promoter Score2018: 74Helping householdssave moneyThrough our well established trusted brands, services, tools and products, delivered by our outstanding people and customer focused culture1. £2bn is estimated customer savings Strategic Report
Financial Statements
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2019 Highlights
At a Glance
Chair’s Statement
Chief Executive’s Review
Our Market and Trends
Our Business Model
Our Customer Journey
Our Strategy
Our Culture
Our Brands
Financial Review
Risk Management
Principal Risks & Uncertainties
Sustainability and Stakeholder
Engagement
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116
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118
Independent Auditor’s Report
Consolidated Statement
of Comprehensive Income
Consolidated Statement of Financial
Position
Consolidated Statement of Changes in
Equity
Consolidated Statement of Cash Flows
119
120 Notes to the Consolidated Financial
Statements
150
Company Balance Sheet
151
Statement of Changes in Equity
152 Notes to the Company Financial
Statements
Governance
General
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157
Shareholder Information
Financial Calendar
Chair’s Introduction to Governance
Board of Directors
Corporate Governance Report
Audit Committee Report
Nomination Committee Report
Risk Committee Report
Directors’ Remuneration Report
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104 Directors’ Report
108 Directors’ Responsibility Statement
Moneysupermarket.com Group PLC Annual Report and Accounts 2019
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Financial StatementsStrategic ReportGovernance 2Moneysupermarket.com Group PLC Annual Report and Accounts 20192019 Highlights Strategic reportCreating valueand making progressReturn to profit growth and continued momentum in the second year of our Reinvent strategy Read more about the performance of our brands from page 24 Financial highlights
Operational highlights
Revenue (£m)
388.4m
9%
Profit before tax (£m)
116.0m
9%
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è Return to profit growth
è Reinvent strategy continues to improve the
customer experience and deliver new market
growth
è Helped our customers save an estimated £2bn
è Solid trading performance with revenue up 9%
ahead of 2018
è Adjusted EBITDA of £141.5m, in line with
expectations
è Strong operational cash generation of £113.7m
during the period, increasing 6% year-on-year
è Full year dividend increased by 6% reflecting our
progressive dividend policy
è Moneysupermarket Group was ranked 36 on the
Inclusive Companies list
Adjusted EBITDA1 (£m)
Basic earnings per share (p)
1 Use of alternative performance measures is detailed in the
141.5m
9%
17.7p
9%
Financial Review on page 30
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Revenue by segment
Insurance
£188.4m
2018: £183.0m
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Money
Adjusted earnings per share1 (p)
Total dividend per share (p)
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5%
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£86.0m
2018: £88.1m
Home Services
£68.6m
2018: £49.2m
Other
£45.4m
2018: £35.2m
Moneysupermarket.com Group PLC Annual Report and Accounts 2019
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4Moneysupermarket.com Group PLC Annual Report and Accounts 2019At a glance Strategic reportLeading positions in growing marketsBrands widely trusted by consumersSignificant savings for customersLow cost and flexible acquisi-tion channel for providersA highly profitable and cash generative marketplace model offering great returns to ourshareholdersVisit our website http://corporate.moneysupermarket.comMoneysupermarket Group is a successful and growing business driven by a clear purpose of helping households save moneyThrough our leading brands, MoneySuperMarket, MoneySavingExpert, TravelSupermarket and Decision Tech, we are committed to providing customers with the services, tools and products they need to save moneyWhy invest in Moneysupermarket Group?Who we are Our leading brands
Key Performance Indicators
‘Get Money Calm’
2019 has been a significant year
for MoneySuperMarket, with a
major overhaul of our
proposition, brand message and
advertising creative all aimed at
showing the brand’s central
purpose - helping our customers
get control of their money to ‘Get
Money Calm’
Active users
13m
Compare to save money
TravelSupermarket helps people
to save money on the largest
element of discretionary spend
for most households - their
holiday. It offers price
comparison for package holidays,
car rental, flights, hotels and a
variety of travel costs, including
travel insurance, transfers and
airport parking
Holiday enquiries
19.5m
Consumer champion and one
of the UK’s biggest finance
websites
MSE reaches nearly half of UK
consumers each month. 2019
saw a new record for weekly
traffic- 6.5 million sessions - and
over 14.3m subscribers to our
weekly email
MSE has consistently ranked top
in the UK Online Services sector
(YouGov 2019 Brandindex) and
are proud to be ranked 4th
overall in the UK Brand Advocacy
category, with our ratings
increasing year on year
Within seven months of the
acquisition of Decision Tech,
it delivered a new energy
comparison service to the saving
and smart money-management
app, Yolt
It has also since won contracts
with Emma Money Management
(a budgeting App), Totally Money,
Love Energy Savings and Snoop,
with the new business funnel
looking very promising
Weekly email subscribers
No. of visitors to site
14.3m
31m+
Estimated customer savings
Calculated by multiplying sales volume and the average
estimated saving per product for core channels, the balance of
the calculation is a Company estimation.
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£2.0bn
£2.1bn
£2.0bn
Active users
The number of unique accounts running enquiries in our
seven core MoneySuperMarket channels (car insurance, home
insurance, life insurance, credit cards, loans, energy and travel)
in the prior twelve month period.
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13.1m
12.9m
13.2m
Marketing margin
The inverse relationship between revenue and total marketing
spend represented as a percentage.
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61%
63%
65%
Net promoter score
The twelve monthly rolling average (1 Jan 2019 – 31 Dec 2019
inclusive, excluding Decision Technologies Limited) measured
by YouGov Brand Index service Recommend Score weighted by
revenue to create a Group-wide NPS.
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69
Revenue per active user
The revenue for the seven core MoneySuperMarket channels
divided by the number of active users.
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£16.40
£15.90
£14.80
Moneysupermarket.com Group PLC Annual Report and Accounts 2019
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Financial StatementsStrategic ReportGovernance 6Moneysupermarket.com Group PLC Annual Report and Accounts 2019We will strive to continue to deliver long-term growth and lead the way in price comparison by leveraging our Reinvent strategy, underpinned by our inclusive and innovative culture“Chair’s Statement Strategic reportI am delighted to have taken over as Chair, having succeeded Bruce Carnegie-Brown at our Annual General Meeting, held in Chester in May 2019. I would like to thank Bruce for his leadership of the Board and his invaluable contribution over nine years, and for enabling a smooth transition.In February 2020, the Company announced that Mark Lewis had indicated his intention to stand down from the Board. No date has been agreed and Mark indicated he wished to ensure a smooth transition to his successor. The Board is grateful for Mark’s contribution to the Group. In the three years since Mark became CEO, the Group has helped households save over £6bn, returned £250m to shareholders, launched new personalised customer experiences and developed new capabilities in B2B services and the digitisation of mortgage comparison under the Reinvent growth strategy.One of the reasons I joined the Board back in 2015 was the strength and allure of the Group’s ethos and its sense of purpose, in helping households save money. The continuous hard work of our people, led by our strong management team, enables us to create significant value for our customers and other stakeholders. Whether it is helping our customers proactively save money on their bills through MoneySuperMarket; providing a range of cost-saving holiday options with TravelSupermarket; or empowering our users and fighting their corner with MoneySavingExpert, our Board is focused on ensuring our strategy and culture enable us to create long-term sustainable value, while adhering to UK Corporate Governance Code requirements. Further information on our people and culture can be found on pages 44 to 48.Our role in societyOne of my priorities as Chair is to ensure that the Stakeholder Voice is heard in the boardroom. The culture that underpins our group strategy is one that encourages our people to consider the impact we are having personally, and as a Company, whether it is our focus on employee welfare and mental wellbeing at work; donating our time and efforts to raise funds for The Prince’s Trust or reducing our carbon footprint in an effort to ensure a sustainable future for all. Board members regularly spend time talking Adjusted EBITDA£141.5mTotal dividend per share11.71pRobin FreestoneChairCombining purpose with innovation and inclusion directly to employees at all our sites and our Non-Executive
Director Employee Champion, Sarah Warby, regularly
updates the Board on key topics raised by our people. To
believe that one can generate sustainable returns for
shareholders without understanding the sentiment of one’s
customers and employees would be the definition of
naivety.
Our Board believes that management of Environmental,
Social and Governance matters must support the Group’s
strategy, long-term performance and the sustainability of
the business. This is why we have made a commitment to
reduce our environmental impact and become a carbon-
neutral company by the end of 2020. More details of this
and our stakeholder engagement more generally can be
found on pages 40 to 59.
The Board
In addition to the Chair, there have been some changes to
the Board’s composition during the year. Scilla Grimble
joined as Chief Financial Officer in February 2019 from
Marks & Spencer Group plc and Genevieve Shore resigned
from the Board in July 2019 after almost five years of
service. We appointed Caroline Britton as Non-Executive
Director and Chair of the Audit Committee (taking over from
me) in September 2019. You can read about Scilla’s and
Caroline’s backgrounds and experience on pages 64 and 65.
In addition, Andrew Fisher will step down from the Board at
the Company’s AGM on 7 May 2020. We thank Genevieve
and Andrew for their valuable contributions and wish them
well with their new roles.
Recent governance requirements have made diversity a
focus in every company’s succession planning. Our Board
collectively possesses a broad range of experience, skills
and knowledge from various backgrounds which support
the strategic and operational direction of the Group. I am
proud that our Board currently consists of a majority of
female members, which exceeds the 33% recommended by
the Hampton-Alexander Review.
I am delighted that we have further strengthened our Board
with the appointments of Supriya Uchil and James Bilefield,
who will be joining the Board as Non-Executive Directors on
1 March 2020 and 1 May 2020 respectively. With Supriya
and James’ product and digital experience, they will be
valuable additions and complement the diverse
backgrounds and experience of our Board.
2019 performance
I am pleased to report another year of progress for the
Group, reflecting the continued investment in our Reinvent
strategy and our product and engineering teams. The
estimated savings customers were able to generate from
our products remained stable at £2bn, while Group revenue
increased by 9% from £355.6m to £388.4m, adjusted
EBITDA increased by 9% from £129.4m to £141.5m and
profit before tax increased by 9% to £116.0m. We again
generated strong cashflow with operating cashflow of
£113.7m and we returned £100.0m cash to shareholders in
2019. All of this was achieved despite an uncertain macro
environment.
Read more about our Business
Model on page 14 and 15
Leading innovation
Part of our strategy is to continue investing in innovative
products to improve our customers’ experience. To
support this, in September 2019, we opened our new
Manchester office which operates as a product and
engineering hub and is now home to approximately 250
employees, including our co-located product and
platform-engineering teams, many working to improve
users’ experience of our products or develop new
offerings for our customers. In order to enable this,
following consultations with affected employees, 53 of
our Ewloe-based roles were relocated to Manchester.
During 2020, in recognition of our long-term
commitment to our Ewloe office, work will commence to
upgrade the site.
Further detail on how our new Manchester presence fits
into the Group’s strategy can be found on page 22.
Capital Allocation
We have a progressive dividend policy and the Board is
recommending a final dividend of 8.61p per share (2018:
8.10p) representing an increase of 6% on the final
dividend in 2018. If approved by shareholders at the
forthcoming Annual General Meeting, this will bring the
total dividend for the year to 11.71p (2018: 11.05p) per
ordinary share, an increase of 6% year on year. The final
dividend will be paid on 14 May 2020 to all shareholders
on the register on 3 April 2020. Details of our dividend
policy can be found on page 61.
When we have significant surplus capital and there are
no short-term organic or acquisitive growth
opportunities available, we will again consider returning
these surplus funds to shareholders through a ‘special
distribution’, in accordance with our capital allocation
policy.
Senior Managers & Certification Regime
(SM&CR)
During 2019 the Board reviewed its governance
framework to ensure it remains fit for purpose and is
compliant with the SM&CR, which was implemented
across the Group’s regulated business in December
2019.
Remuneration Policy
Our Remuneration Policy is being put before the
shareholders for approval at our upcoming Annual
General Meeting, which includes updates to ensure it
complies with the 2018 UK Corporate Governance Code
(the ‘2018 Code’). Considerable work has gone into
updating our policy to comply with all the main tenets of
this code. More information is available in the
Remuneration Report which can be found on pages 85.
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As we progress into 2020, we will strive to continue to
deliver long-term growth and lead the way in innovative
price comparison, by leveraging our Reinvent strategy,
underpinned by our inclusive culture.
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Robin Freestone
Chair
19 February 2020
Moneysupermarket.com Group PLC Annual Report and Accounts 2019
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8Moneysupermarket.com Group PLC Annual Report and Accounts 2019After a year of investment, we have returned to profit growth and are proud to have helped households save over £2bn off their bills”Chief Executive’s review Strategic reportOverviewAfter a year of investment, we have returned to profit growth and are proud to have helped households save over £2bn across a broad range of bills and expenses, while also providing an efficient channel for our providers to attract and retain users. I am pleased to welcome Robin in his new role as Chair of the Board - I have had the pleasure of working with Robin since I joined the Company and he was one of the key architects of our Reinvent strategy. I would also like to extend my thanks to Bruce Carnegie-Brown for his invaluable contribution to the Group.Enabled by our inclusive and innovative culture, our diverse portfolio has performed well against a backdrop of mixed market conditions. The initiatives we undertook in this second year of our Reinvent strategy contributed to revenues that reached £388.4m, up 9% relative to 2018. Exceptional rates of energy switching, the full-year benefits of the Decision Tech acquisition and our ongoing work to optimise the customer experience all contributed to a strong performance. The establishment of our product engineering hub in Manchester and the relaunch of the MoneySuperMarket brand with a promise to help customers ‘Get Money Calm’ were also significant contributors to performance.We remain confident in our personalisation roadmap for MoneySuperMarket, and recently launched a new, personalised homepage, showcasing the monitoring services in one place. During the year we continued to enhance our mortgages proposition, improving our broker and lender integrations to improve the customer experience. We have added further eligibility factors and have built broker and lender integrations to enhance the overall customer experience. Our Podium joint venture has been key to delivering these improvements. Estimated customer savings across the Moneysupermarket Group£2bnRevenue per active user£16.40Mark LewisChief Executive OfficerDelivering on our purpose of helping households save money 2019 was a standout year for
MoneySavingExpert, whose powerful brand
and campaigning work drew a record number
of visitors seeking support in navigating their
finances. Once more the brand’s commitment
to independent editorial journalism resulted in
record traffic and MoneySavingExpect remained
the go-to place for users to navigate the key
consumer finance events of the year such as the
PPI claims deadline, the introduction of the
Energy Price Caps and indeed the implications
of Brexit on their wallets.
Profit before tax and adjusted EBITDA both
grew by 9%, relative to 2018, to reach £116.0m
and £141.5m respectively, reflecting the growth
markets in which we operate. Customers
continued to move towards engagement via
mobile devices, putting pressure on our gross
margin.
We enjoy leading positions in growing markets
with significant headroom and our brands are
firmly trusted by our customers, as
demonstrated by our strong Net Promoter
Score of 74.
Segmental performance
Insurance
Insurance revenues increased by 3% to
£188.4m. We had consistently high natural
search positions in 2018 and in the first half of
2019. However, in the second half of the year,
we saw more volatility in our natural search
positions, which were weaker on average. This
meant that we had fewer customers coming to
us via natural search, suppressing revenue
growth across this vertical.
Money
Money revenue declined by 2% during the year.
Credit products account for the majority of
money revenue and performed well during
2019. The reduction in availability and
attractiveness of promotion products
significantly impacted switching levels for
banking products during the year, especially in
the second half.
Read more about the performance
of our brands on pages 24 to 29
Read more about our strategy
on page 18
Home Services
The introduction in January 2019 of the cap on
default tariffs was a major development in the
energy market, which drives the majority of our
Home Services revenue. Contrary to thoughts
that the energy price cap might suppress
customer appetite for switching, we saw
exceptional growth in our energy business,
with the price cap increasing consumer
awareness of their energy bills, resulting in
Home Services revenue reaching £68.6m
(2018: £49.2m). We were able to capitalise on
the opportunity presented by this significant
regulatory change with leading offers, the
editorial strength of MoneySavingExpert and
further optimisation gains, which resulted in
very high levels of switching.
Other
Weak sterling exchange rates and lower
consumer confidence resulted in a slowdown of
package holiday bookings in early 2019 with the
travel market beginning to pick up in the second
half of 2019. Results for TravelSupermarket
were dampened accordingly. Some of the
initiatives we are working on to counter this are
outlined on page 28.
In its first full year as part of the Group,
Decision Tech contributed £24.8m to revenue
(2018: £10.7m, from acquisition date), with
both its B2B and B2C home communications
businesses performing well. Decision Tech is a
key enabler of our strategic pillar to take price
comparison to the user, more details of which
are outlined below and on page 19.
Progress against strategy
In the two years since we embarked on our
Reinvent strategy we have made pleasing
progress against our strategic pillars to
reaccelerate core growth and unlock new
market growth.
The first pillar of our Reinvent strategy,
reaccelerate core growth, focuses on the
optimisation of our customer experience,
improving the customer journey on our
websites and thereby helping boost conversion.
The customer experience on a mobile device
has been a particular focus and we are pleased
with the conversion gains we have delivered.
The improvements have reduced the margin
pressures from the change in mobile mix
and natural search ranking volatility. The
optimisation of our customer journeys was
enabled by our investment into our product
engineering capability, which is now established
at our permanent product engineering hub in
central Manchester.
Moneysupermarket.com Group PLC Annual Report and Accounts 2019
9
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10Moneysupermarket.com Group PLC Annual Report and Accounts 2019Chief Executive’s review continued Strategic reportThe second pillar of our Reinvent strategy leverages our technology platform to enable us to lead the innovation of price comparison to unlock new market growth:Personalised MoneySuperMarketDuring 2019 we continued to make our services more proactive and personalised. A key enabler of our evolution away from traditional price comparison to a more personalised model was the brand relaunch of MoneySuperMarket, with the commitment to ‘Get Money Calm’. This new brand identity, implemented across all customer touchpoints, has been well received by customers.Following the successful trial of energy and credit monitoring on our mobile app, we extended monitoring services for credit and energy to the core web experience in the second half of 2019. We now have over 600,000 Moneysupermarket customers using these services and are seeing evidence of more customer engagement, cross sell of products and a higher likelihood to return to our website from unpaid sources. We have a clear path to delivery on energy autoswitching, which leverages our unique MSE brand and the Group technology platform. We plan for this service to go live in the first half of 2020.Taking price comparison to the user2019 was the first full year of B2B growth after Decision Tech joined the Group in August 2018. Growth in Decision Tech’s core business was strong and on a like-for-like basis grew 10%. We also made progress in adding new revenue streams by providing energy switching services in our B2B proposition, with six services live.Mortgage price comparisonDuring the year we continued to enhance our mortgage proposition. We have added further eligibility factors to our question set, helping our customers find a mortgage more suited to their needs and, for our remortgage customers, we have improved our broker and lender integrations to enhance the overall customer experience. In February we launched our first decision in principle service. Our Podium joint venture has been key to delivering these improvements.People and cultureEmbedding an innovative and inclusive culture in the business has been a priority as we seek to drive innovation for our users. We also strive to create an inclusive environment, championed very effectively by several of our Employee Resource Groups. I wish to thank them, as well as colleagues throughout the business, who have embraced moving our culture forward. We are proud to have been recognised as the #2 ranking company in the Hamilton Alexander report for gender neutrality at Board levels in the organisation, and to have recently been voted one of the top 50 most inclusive companies in the UK. A core strand of our culture is our approach to working responsibly, which we have stepped up through our commitment to being a carbon-neutral business by the end of 2020 and our partnership with the Prince’s Trust, details of which are outlined on pages 54 and 55 respectively.The business is built on close relationships with our broad base of longstanding and more recently established providers, whose value for money keeps customers returning to our sites. Although we work closely with providers on an ongoing basis, the relaunch of the MoneySuperMarket brand earlier in the year provided an exciting opportunity to celebrate our valued partnerships. OutlookIn ongoing uncertain times for UK consumers and their finances, we are well-positioned to fulfil our purpose of helping households save money. Our market leading brands, the diversity of our trading categories and increased levels of innovation set the Group up to once again deliver successful returns for customers, providers and investors in 2020, as we continue at pace with our Reinvent strategy to move price comparison forward.Mark LewisChief Executive Officer19 February 2020 S
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Moneysupermarket.com Group PLC Annual Report and Accounts 2019
11
Strategic report
Our Market and Trends
Clear trends in
our chosen markets
We have a diverse mix of
growth opportunities
Markets
Trends
Impact
Opportunities
Brands affected
Price
Comparison
(Overall market)
Insurance
Money
Home
Services
Travel
Regulatory focus
Greater focus from governmental and regulatory bodies
on empowering customers
Regulation will become an increasingly important
feature of the price comparison sector.
Increasingly, regulators are working to
empower the consumer.e.g. Ofcom enabling
users to switch mobile phone provider by text
Continued shift to mobile
Consumers are increasingly accessing price comparison
services on mobile devices
Mobile conversion rates are typically lower
than rates achieved using desktop across most
industries (beyond just price comparison sites)
Regulation empowering customers to save money is fully aligned with both our purpose of
helping households save money and our Reinvent strategy. Easier opportunities for switching, e.g.
regulatory changes allowing customers to switch mobile phone providers by text, will encourage
greater engagement by our customers and drive site visits. In addition, the Group’s market position
and strategy together with its systems, controls and infrastructure means it is well placed to deal
with the impacts of any increase in regulation. It will differentiate itself from its competitors through
enhanced customer journeys (on both mobile and desktop) and enhanced product offerings
Motor and home insurance premiums
Average car insurance premiums are expected to grow
in 2020, having remained stable year-on-year driven
by the adjustment of the Ogden rate and increasing
claims inflation. Home insurance premiums have grown
driven by an increase in subsidence claims and weather
related claims
Travel insurance
Lower consumer confidence has decreased the overall
demand for travel and therefore the demand for
travel insurance. Weaker sterling exchange rates have
increased the cost of medical claims which has fed into
higher premiums
Consumer market
There are signs of credit decision tightening and
a decrease in availability of unsecured credit to
households
Increasing motor and home insurance premiums
may encourage consumers to look to switch their
insurance provider to get a better deal
As a leading price comparison site, MoneySuperMarket is well placed to help consumers seeking
to lower their insurance premiums and switch to a better deal. Our brand relaunch will help to
keep us in the front of consumers’ minds when they are looking to compare their insurance
Increasing premiums may encourage customers
to switch their travel insurance provider,
although this may be offset by a potential
decrease in demand for travel insurance
Decreasing demand from consumers and
reduced switching offers for credit cards and
savings accounts
The Group’s strength in identifying money-saving ideas and monitoring our customers’
credit files will benefit consumers seeking services that help to improve their credit ratings
Energy price cap
Ofgem introduced the energy price cap in January
2019 and adjusted it above the average standard
variable rate, resulting in increased energy bills for
many consumers
The price cap increased consumer awareness
of the costs of energy and the benefits of
switching their energy provider
The Group is well placed to help consumers seeking to reduce their energy costs and switch their
energy provider. Our new monitoring products will alert customers if further savings can be made
MoneySavingExpert’s strong editorial content drives user engagement and strong retention rates
Package holidays
Weaker sterling exchange rates and lower consumer
confidence resulted in a slowdown of package holiday
bookings in early 2019. However, bookings picked
up towards the end of 2019, driven by increased
competition and a stronger sterling
Economic uncertainty has meant consumers
are increasingly focused on finding the best deal
for their holiday
TravelSupermarket continues to focus on building leading comparison services to help consumers
find the best deal for their holiday
12
Moneysupermarket.com Group PLC Annual Report and Accounts 2019
Markets
Trends
Impact
Opportunities
Brands affected
Regulatory focus
on empowering customers
Price
Comparison
(Overall market)
Greater focus from governmental and regulatory bodies
Regulation will become an increasingly important
feature of the price comparison sector.
Increasingly, regulators are working to
empower the consumer.e.g. Ofcom enabling
users to switch mobile phone provider by text
Mobile conversion rates are typically lower
than rates achieved using desktop across most
industries (beyond just price comparison sites)
Continued shift to mobile
Consumers are increasingly accessing price comparison
services on mobile devices
Motor and home insurance premiums
Average car insurance premiums are expected to grow
Increasing motor and home insurance premiums
Insurance
in 2020, having remained stable year-on-year driven
by the adjustment of the Ogden rate and increasing
claims inflation. Home insurance premiums have grown
driven by an increase in subsidence claims and weather
may encourage consumers to look to switch their
insurance provider to get a better deal
related claims
Travel insurance
higher premiums
Consumer market
Lower consumer confidence has decreased the overall
Increasing premiums may encourage customers
demand for travel and therefore the demand for
to switch their travel insurance provider,
travel insurance. Weaker sterling exchange rates have
although this may be offset by a potential
increased the cost of medical claims which has fed into
decrease in demand for travel insurance
Regulation empowering customers to save money is fully aligned with both our purpose of
helping households save money and our Reinvent strategy. Easier opportunities for switching, e.g.
regulatory changes allowing customers to switch mobile phone providers by text, will encourage
greater engagement by our customers and drive site visits. In addition, the Group’s market position
and strategy together with its systems, controls and infrastructure means it is well placed to deal
with the impacts of any increase in regulation. It will differentiate itself from its competitors through
enhanced customer journeys (on both mobile and desktop) and enhanced product offerings
As a leading price comparison site, MoneySuperMarket is well placed to help consumers seeking
to lower their insurance premiums and switch to a better deal. Our brand relaunch will help to
keep us in the front of consumers’ minds when they are looking to compare their insurance
There are signs of credit decision tightening and
a decrease in availability of unsecured credit to
Decreasing demand from consumers and
reduced switching offers for credit cards and
The Group’s strength in identifying money-saving ideas and monitoring our customers’
credit files will benefit consumers seeking services that help to improve their credit ratings
Money
households
savings accounts
Energy price cap
Home
Services
many consumers
Ofgem introduced the energy price cap in January
2019 and adjusted it above the average standard
variable rate, resulting in increased energy bills for
The price cap increased consumer awareness
of the costs of energy and the benefits of
switching their energy provider
The Group is well placed to help consumers seeking to reduce their energy costs and switch their
energy provider. Our new monitoring products will alert customers if further savings can be made
MoneySavingExpert’s strong editorial content drives user engagement and strong retention rates
Package holidays
Weaker sterling exchange rates and lower consumer
Economic uncertainty has meant consumers
confidence resulted in a slowdown of package holiday
are increasingly focused on finding the best deal
TravelSupermarket continues to focus on building leading comparison services to help consumers
find the best deal for their holiday
Travel
bookings in early 2019. However, bookings picked
up towards the end of 2019, driven by increased
competition and a stronger sterling
for their holiday
Moneysupermarket.com Group PLC Annual Report and Accounts 2019
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Financial StatementsStrategic ReportGovernance 14Moneysupermarket.com Group PLC Annual Report and Accounts 2019Our Business Model Strategic reportAchieving savings for our customers and efficient customer acquisition for our providersWe operate through well-established, trusted leading brands, providing price comparison and editorial-based websites Increasingly, we offer monitoring services to alert our customers when they could save more. Whilst each brand has a slightly different business model, we set out in this section the overarching business model for the Group – which is simple, success-based, revenue-driven and highly scalableHow it worksUsing our assets (trusted brands, data-driven aggregation, provider relationships and talent), we: •identify products and services which are relevant to customers, and where they can make meaningful savings on their household bills, including motor, home and life insurance, utilities, credit cards, loans and package holidays; and •attract customers and providers through our trusted brands and services, and through our marketing activities (including traditional media and paid-for search).Details of our customer journey are set out on pages 16 to 17.How we create valueWe create value through: •Our trusted brands – customers have the reassurance of using a family of well-known and trusted brands. We help customers to find us through media advertising, editorial comment in the press and on TV programmes, and through search engines; •Data-driven aggregation – we combine, process and aggregate data using our enterprise data warehouse which is a single, modern, flexible and secure platform, enabling us to personalise the customer experience, helping customers make informed choices about which products they wish to buy in a straightforward and convenient way; •Our provider relationships – ensuring our commercial teams build strong relationships with providers to identify opportunities to help our customers, including new and market-leading exclusive products; •Our talent – ensuring we hire the most talented people with appropriate industry, technology, data, product and marketing expertise who are responsible for innovating, designing, implementing, maintaining, supporting and promoting our websites and apps, including via natural search. Investing in our talented people through management development and mentoring programmes; •Natural search – our natural search teams make improvements to our sites with the aim of improving the quality and quantity of website traffic to our sites as well as responding to known changes in search engine’s algorithms; •Our scalable platform – our websites and apps are robust, flexible, secure and are scalable across our different channels ensuring we can adapt and meet the needs of our customers and product providers; •Operational leverage – our revenue is driven by the number of customers who buy a product through us, and the fee rates payable to us by product providers, for each product taken out. An increase in either the number of products purchased or the fee rates will have a positive impact on revenue; and •Encouraging repeat usage – our new monitoring propositions provide useful services and MoneySavingExpert’s clubs alert customers and users when savings can be achieved. This encourages repeat visits to our sites.14Moneysupermarket.com Group PLC Annual Report and Accounts 2019 Trusted brands
Data-driven aggregation
Provider relationships
Talent
Customer
data
Data-driven marketplace
Efficient
acquisition
Customer
savings
Provider
profitability
Personalised
quotes, guidance
and monitoring
Personalised
quotes
Operational leverage
Scalable platform
Shareholder returns and stakeholder value
Sharing value with our stakeholders
Our customers – in a few simple steps,
customers can use any of our trusted brands
to help them save time and money on their
household bills.
Our people – we offer a great place to work:
rewarding and stimulating careers, learning
and development opportunities, an attractive
range of benefits and the opportunity to help
households save money.
Fact: Our customers are
estimated to have saved £2.0bn
in 2019 (2018: £2.1bn)
Read more in the Chief Executive’s review
Page 8
Our providers – we offer providers access
to millions of informed customers, thereby
giving them a flexible, efficient and cost-
effective, success-based marketing solution.
Fact: We worked with around
1,100 providers in 2019
(2018: around 1,000)
Fact: We spent £750,000 on
employee development in 2019
(2018: £907,000)
Read more about our people and culture
– Pages 44 to 48
Our community – we seek to make a
positive difference by being an active
contributor to the communities we
operate in.
Fact: We donated £142,000
to charitable causes in 2019
(2018: £337,000)
Read more about our work with the
community – Pages 54 to 55
Our shareholders – by delivering value
to our customers and providers, we
ultimately drive long-term financial value
to our shareholders through the delivery
of consistent revenue and earnings growth,
together with the payment of dividends,
in accordance with our progressive
dividend policy.
Fact: We returned £100.0m to
shareholders in 2019 through
dividends (2018: £56.5m)
Read more in the Financial Review
Page 30
Moneysupermarket.com Group PLC Annual Report and Accounts 2019
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Financial StatementsStrategic ReportGovernance 16Moneysupermarket.com Group PLC Annual Report and Accounts 2019 Strategic reportOur Customer journeyI found MoneySuperMarket so simple and straight forward to use. Fast results that saved me around 70% on my previous provider. I would recommend MoneySuperMarket if you are looking for value for money“Trust Pilot reviewOptimising the customer experienceThe first pillar of the Reinvent strategy focuses on the optimisation of our customer journeysOverviewDuring 2019 we focused on the optimisation of our customer journeys, making our sites easier to use, particularly for anyone accessing our services via a mobile phone. The customer experience optimisation rollout is continuing to deliver conversion gains across our key verticals: Insurance, Money and Home Services. Optimisation successes in 2019 included: •new results pages on home insurance and loans journeys; •simplification of the life insurance journey; •introduction of provider customer savings ratings on Cheap Energy Club; and •comparing monthly costs and annual savings for energy switchers.Customer experienceIn September 2019, we moved into our new product and engineering hub in Manchester. Our co-located product and platform-engineering teams work in a well-designed environment, allowing them to focus on innovation and customer centricity.Manchester product engineering hub250 staffDuring 2019, we broadened the demographic that we use for our customer experience testing to include customers aged 70 and over and visually impaired and blind people. Further information on our progress is on page 56. Beyond optimisationWe launched two new monitoring services on MoneySuperMarket by the end of 2019. Further information on our personalisation progress is on page 20. 1
Awareness
Prompted by our monitoring
services, marketing and
editorial content, customers
and users visit our sites to
connect with our trusted
brands
Research
Customers and users
compare products and
personalised quotes
2
3
4
Select & Buy
Customers and users
select a product from
a provider, transacting
either on our site or
clicking through to a
partner’s site
Customer
Insight
We gain insight
and feedback from
customers and their
data to further help
personalise the service
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Return
Customers and
users return to us
for more savings
on other products
or services
5
Monitor & Engage
Customers receive
guidance,
money-saving tips
and tailored alerts on
relevant products
Steps taken to optimise the customer journey
Via Decision Tech’s
B2B price and
product comparison
capabilities we are
able to reach
customers through
other products they
already use
Our award-winning
marketing and
editorial attracts
customers to our
trusted brands
We alert customers
when they can save
money on the
product they bought,
as well as other
related products
Our secure, flexible
technology finds
binding quotes
across a broad set
of 15 different
categories
We use customer
insight and feedback
to help us improve
our service and help
providers improve
their products
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18Moneysupermarket.com Group PLC Annual Report and Accounts 2019Our Strategy Strategic reportHelping households save moneyTo fulfil our purpose of ‘Helping households save money’, our Reinvent strategy relies on two key pillars: reaccelerating our core growth by focusing on rapid optimisation of our customer journeys and unlocking new market growthThe first pillar of the Reinvent strategy focuses on the optimisation of our customer journeys, making the site easier to useThe second pillar of the Reinvent strategy uses our technology platform to lead the innovation of price comparison and unlock new market growthStrong differentiated modelOur core business fundamentals are strong and differentiated. We have leading brands with high customer satisfaction scores. The Group benefits from an efficient mix of marketing and publishing business models to attract users. On the back of our investment in data analytics, we can track our users across the interactions they have within each of our brands. Our technology platform provides us with a single view of our users, allowing us to serve them better.Efficiently growing the number of active users and helping them save in new ways is core to our business model. For further information on our business model see pages 14 to 15.Growing marketsWe forecast price comparison markets to grow 4-5% over the coming years.We already help customers save money across a broad set of channels. Nevertheless we believe there are opportunities to unlock further growth in the market, by making it easier for users to save and by developing categories, such as mortgages.CultureOur Reinvent strategy is underpinned by our strong company culture. Our inclusive and innovative culture allows us to drive innovation for our users and deliver our strategy. Helping households save money
Reaccelerate Core Growth
New Market Growth
Leading
Trusted
Brands
Customer
Experience
Optimisation
Leading
Provider
Offer
Personalised
MSM
Take Price
Comparison
to the user
Mortgage Price
Comparison
Customer Experience
Optimisation
Developing our product and
engineering capabilities to
ensure we continue to optimise
the customer experience,
increase conversion rates and
help customers find savings
more easily on mobile and web.
Leading Trusted Brands
Customers continue to have the
reassurance of using a family of
well-known and trusted brands.
We help customers find us
whether online, via social media
or above the line advertising.
1. Personalised MSM
Focused on making our services
more proactive and personalised,
driving meaningful engagement
and increasing the rate at which
our customers return to
MoneySuperMarket.
Leading Provider Offer
Ensuring our commercial teams
continue to build strong
relationships with providers,
to identify opportunities to
help our customers, including
new and market-leading
exclusive products.
3. Mortgage price
comparison
Transforming and digitising the
mortgage experience, for both
our customers and the lenders
and brokers with whom we
partner, by building a true price
comparison service in mortgages.
In 2018, we launched Podium, a
joint venture to disrupt the
mortgages market and improve
mortgage comparison services.
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Launching monitoring products
which store customers’ key
policies, and automatically check
that they continue to receive the
best deal possible.
2. Take Price
Comparison to the user
Leveraging our trusted brands
and technology platform to
ensure we reach people who
are not yet engaging with price
comparison sites, by presenting
personalised deals to users
on apps or sites they are
already visiting.
In August 2018 we bought
Decision Tech, which has
leading B2B price and product
comparison capabilities.
During 2019, Decision Tech
established itself as a leading
B2B energy service.
Moneysupermarket.com Group PLC Annual Report and Accounts 2019
19
Read more about how our culture
drives performance on page 22
20Moneysupermarket.com Group PLC Annual Report and Accounts 2019Our Strategy Strategic reportProgress againstour strategic prioritiesOur Reinvent growth strategy focuses on two main strategic pillars – reaccelerate core growth and new market growthStrategic InitiativesBusiness ModelWhat we have done in 2019Reaccelerate Core GrowthCustomer ExperienceOptimisation ´Trusted brands ´Talent ´Provider relationships ´Established product and engineering hub in Manchester and integrated new tech and product teams ´Improvements in conversion across key channelsNew Market GrowthPersonalised MSM ´Data driven aggregation ´Talent ´Operational leverage ´Delivered Credit Monitor, Energy Monitor and monitor dashboard to web ´‘Get Money Calm’ brand relaunch in March 2019Take Price Comparison to the User ´Data-driven aggregation ´Trusted brands ´Provider relationships ´Scalable platform ´Successfully embedded Decision Tech and launched B2B energy proposition ´Provided energy switching services to four partner businessesMortgage Price Comparison ´Trusted brands ´Provider relationships ´Talent ´Delivered the first phase of our new mortgage journey ´Lender integrations live Strategic Initiatives
Business Model
What we have done in 2019
Our Future
Brand
Principal Risks and Uncertainties
´ Trusted brands
´ Talent
´ Provider relationships
´ Established product and engineering hub in
Manchester and integrated new tech and
product teams
´ Improvements in conversion across key channels
´ Modernisation of MoneySavingExpert’s user
experience
´ Strong roadmap to continually optimise the
customer experience
´ Data driven aggregation
´ Delivered Credit Monitor, Energy Monitor and
´ Talent
´ Operational leverage
monitor dashboard to web
´ ‘Get Money Calm’ brand relaunch in March 2019
´ Continued development of monitoring
products
´ Continued development of the ‘Get Money
Calm’ brand
´ MoneySuperMarket’s customers to be
logged in by default
´ Launch of MoneySavingExpert’s energy
autoswitching
´ Competitive environment and consumer demands
´ Brand strength and reputation
´ Business transformation
´ Economic conditions
´ Regulation
´ Competitive environment and consumer demands
´ Business transformation
´ Relevance to partners
´ Data-driven aggregation
´ Successfully embedded Decision Tech and
´ Focus on attracting additional partners
´ Trusted brands
´ Provider relationships
´ Scalable platform
launched B2B energy proposition
´ Provided energy switching services to four partner
businesses
´ Competitive environment and consumer demands
´ Business transformation
´ Relevance to partners
´ Trusted brands
´ Provider relationships
´ Talent
´ Delivered the first phase of our new mortgage
journey
´ Lender integrations live
´ Further product eligibility enhancements
to the mortgage journey
´ Continued focus on deeper broker and
lender integrations to further improve the
mortgage journey
´ Competitive environment and consumer demands
´ Business transformation
´ Relevance to partners
´ Regulation
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Take Price
Comparison
to the User
Mortgage Price
Comparison
Moneysupermarket.com Group PLC Annual Report and Accounts 2019
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Financial StatementsStrategic ReportGovernance
22Moneysupermarket.com Group PLC Annual Report and Accounts 2019Top Tech TalentWe seek to foster a culture of learning and growth, giving employees the skills, knowledge and experience to flourish, as well as support sustainable business growth. In September 2019, we moved into our new purpose-built Product and Engineering Hub in Spinningfields, Manchester. Our aim was to create a state-of-the-art, flexible and intuitive workspace which would deliver an excellent employee experience, and enable us to build a world-class product and engineering capability for the business. The workspaces have been designed specifically to provide a frictionless and functional environment within which our teams could collaborate in their focus on innovation and customer centricity. The office now houses approximately 250 employees including our co-located product and platform-engineering teams. Culture supports our strategyOur Reinvent strategy is underpinned by our strong company culture. We encourage our people to consider both their own and the Group’s impact on the world around themOur CultureEmployees in new hub250 6,23Moneysupermarket.com Group PLC Annual Report and Accounts 2019Financial StatementsStrategic ReportGovernanceThrive award2019 saw our Moneysupermarket Group colleagues progress with our fantastic ‘Thrive’ employee resource group, which empowers a culture supportive of mental health. Thrive scooped up the award for Best New Workplace Approach to Mental Health at the This Can Happen Awards 2019.This award recognises our approach to addressing mental health in the workplace and the steps we have taken in 2019 to change the culture at the Group, via a holistic and focussed approach to maintaining and improving the mental health of all employees. It also commends the impetus and processes behind our Thrive initiative and the action plans we have set in motion to deliver it.Inclusion in list of top 50 inclusive companiesMoneysupermarket Group has reached Number 36 in 2019’s Inclusive Top 50 UK Employers List.The league table recognises the most inclusive employers and shines a light on best practice across all strands of diversity, including age, disability, gender, LGBT, race, faith and religion. We are extremely proud to enter the list for the first time this year at number 36.Top 50 UK Employers List# 36 Strategic report
Our Brands
Get Money Calm
2019 has been a significant year for MoneySuperMarket, with a major
overhaul of our proposition, brand message and advertising creative all
aimed at showing the brand’s central purpose – helping our customers
get control of their money to ‘Get Money Calm’
A new brand idea to support
a new proposition
After 7 years focusing on the promise of,
‘save money, feel epic’, we relaunched
MoneySuperMarket’s central brand
promise in March, with the idea that
MoneySuperMarket can help its
customers ‘Get Money Calm’.
Our new advertising focuses on the
feelings of being calm and in control, that
customers can experience as they tame
the chaos of their bills. It is intended to
permeate every part of the customer
experience, including all communications
ensuring that customers are more likely
to remember the MoneySuperMarket
brand – a key consideration in such a
competitive category. The initial feedback
on the campaign has been positive,
as reflected in the increased brand
tracking metrics.
A new look for the site
The new brand purpose was
accompanied by an entire new look and
feel for MoneySuperMarket to make sure
that we show a consistent delivery of our
proposition from advertising to our
customers’ experience on site. This has
resulted in a calmer experience across
web and app. The site now showcases
how MoneySuperMarket can help users
achieve a feeling of ‘money calm’ and
promotes a series of new products aimed
at delivering the proposition.
New monitoring products
We have launched a number of new
products across our website and apps in
2019, all aimed at changing the nature of
price comparison. Our aim is to reduce
the ‘one-shot’ nature of consumers’
engagement with price comparison
websites. MoneySuperMarket will
encourage users to visit the site by
monitoring the products they purchase
and alerting them when a further switch
could save them more.
We launched our credit monitor
proposition on the web this year,
matching what we provide app users -
a free credit score and timely and
accurate information on the best
borrowing products for them, along
with hints and tips on how to improve
their score.
In a similar development, we took the
energy monitoring proposition we had
developed for app users and made it
available on the web. This product helps
customers keep on top of the ever-
changing world of energy tariffs and
price caps and tells them when a switch
would save them money.
Our mobile app allows customers to
sign up to receive reminders when
their car tax, MOT and insurance are
due for renewal.
To emphasise the change in proposition,
from just switching to monitoring, we plan
to rebuild the homepage for logged-in
users. Once live, users will see their
personalised dashboard, which will
update them at a glance emphasising
the fact that MoneySuperMarket helps
you ‘Get Money Calm’.
By the end of 2019, we had over
600,000 customers using the above
monitoring services.
Supported by intelligent customer
relationship management (‘CRM’)
We have supported the move to
monitoring with our approach to CRM.
Building on the strength of
personalisation, where over 90% of our
messages to MoneySuperMarket users
are personalised, we launched ‘Your
Money Round Up’, which brings together
relevant and timely personalised content,
along with updates across the monitoring
services customers have opted into.
Optimised journeys support
getting money calm
In 2018 we announced an investment in
building our internal product engineering
capability in Manchester, with an
emphasis on iterative development to
improve conversion and reduce friction.
By the middle of 2019, all of our major
channels were owned and optimised by
internal teams. We have seen progress
in all areas – across several insurance
channels, borrowing and energy, and we
see further potential for growth here.
Users responded to our improvements in
the central proposition and site with a net
promoter score of 72.3.
Encouraging prospects
2020 will be focused on similar themes –
further cementing the idea of, ‘Get Money
Calm’ in our site experience and
communications.
24
Moneysupermarket.com Group PLC Annual Report and Accounts 2019
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An excellent service,
easy to search out
the best deals, saving
me more than two
hundred pounds
compared to my
then current
insurer’s quote “
Trustpilot review
Clever ways to
save a lot, by
doing very little
Moneysupermarket.com Group PLC Annual Report and Accounts 2019
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26Moneysupermarket.com Group PLC Annual Report and Accounts 2019Our Brands continued Strategic reportCutting users’ costs, fighting their cornerSetting the agendaThrough our campaigns, MoneySavingExpert sets the agenda and fights on behalf of consumers. This year we:Helped make it easier to claim the ‘Severely Mentally Impaired’ council tax discount. Based on our recommendations, and with our support, all 22 Welsh local authorities introduced a standardised application for the discount, and agreed to a standardised back-dating policy. The initiative significantly increased uptake in Wales, something MoneySavingExpert will now focus on replicating across Scotland and England.Helped tackle online scam ads. In July, two major initiatives launched as a direct result of Martin Lewis’s campaigning defamation lawsuit – the creation of Citizens Advice Scams Action (CASA) and Facebook’s scam ads reporting tool which is unique to the UK.Continued to fight on behalf of mortgage prisoners. After five years of MoneySavingExpert campaigning, in 2019 the FCA finally confirmed market interventions that will free some of these consumers, who are nonsensically told they can not afford a cheaper mortgage. As the FCA’s solution is only going to help the minority, MoneySavingExpert will step up efforts to influence the Treasury to act. MoneySavingExpert is one of the UK’s biggest finance websites, reaching nearly half of UK consumers each month. 2019 saw a new record for weekly traffic – over 6.5 million sessions – and we reached a record of over 14 million for our weekly email. We have consistently ranked top in the UK Online Services sector (YouGov 2019 BrandIndex) and are proud to be ranked 4th overall in the UK Brand Advocacy category, with our advocacy ratings increasing year-on-year Our core aims remain unchanged: editorially independent, we are committed to helping users cut their costs, with money-saving guides and tools, and fighting their corner with high-impact campaigns. We will continue to look for new ways to deliver our mission, including improving our website and services to adapt to the changing needs of our usersDecoded the complexities of student loans. MoneySavingExpert produced an hour-long video lecture, featuring Martin Lewis, to help students, graduates, parents and teachers really understand how student finance works. Filmed in front of 100 sixth form students, it will be freely distributed to hundreds of schools across England.The place people turn to2019 showed that when people want clear information on events that affect their finances, MoneySavingExpert is where they turn to: •In the last two days before the August PPI reclaim deadline, 500,000 people used our reclaiming tool. Since our PPI guide was first launched in 2005, we’ve helped over 4m people reclaim an estimated £12bn; •Following the collapse of Thomas Cook, our constantly updated guide brought together the latest information for concerned travellers, as well as practical help for staff made redundant. It received 450,000 page views in the first week; •Our regularly updated Brexit guide provided the best available information on the potential impact on personal finances and was read over one million times this year. Our strategic prioritiesThis year we have continued to focus on improving our product guides and tools to increase user engagement, and have begun the next stage of our programme to update the website to ensure we help our users find the content they need, in the form they need, with a particular emphasis on mobile. Site-wide improvements to navigation, search and design have been tested, and will be rolled out in 2020. In early 2020 we launched our re-platformed MoneySavingExpert Forum, allowing us to further expand the impact of the UK’s largest online community of money savers. We will also enhance our key money-saving tools including Cheap Energy Club and our Cards and Loans Eligibility Checker, to make it even easier for users to cut their bills. S
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Over 14m
subscribers to MSE
weekly email
£12bn
Over 1m
reclaimed since 2005 by MSE users
accessing our PPI guide
Number of times our Brexit
guide was read in 2019
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Strategic report
Our Brands continued
Simply compare
to save money
TravelSupermarket helps people to save money on the largest element of
discretionary spend for most households – their holiday. It offers price
comparison for package holidays, car rental, flights, hotels and a variety of
travel extras, including travel insurance, transfers and airport parking
49mTotal Visitors
19.5mHoliday Enquiries
TravelSupermarket has focused on two
areas to help it trade through tough
times. First, it has focused on its ability to
generate traffic cost effectively, through
unpaid search engine traffic. New pages
were engineered for most major
destinations to appeal both to customers’
needs and Google’s search engine. They
aim to showcase our great deals along
with updated content about each
destination.
Second, it has continued to optimise its
experience for holiday searchers,
reducing the time taken for results to
appear and making a like-for-like
comparison of the elements of a package
holiday easier. This has helped improve
the experience, particularly on a mobile
phone, and increased conversion of
package holiday shoppers into prospects
for our partners.
The early part of 2019 saw
TravelSupermarket operating in tough
market conditions. Uncertainty
surrounding both the date and nature of
the UK’s exit from the European Union –
two deadlines passed in 2019 – has
reduced demand by at least 10%
compared with 2018. Most operators in
the UK market have warned that they
have found trading difficult. Thomas
Cook, one of the oldest and best-known
names in the market, filed for bankruptcy
at the end of the summer season. Whilst
TravelSupermarket’s providers tend to be
the newer challengers in the market – like
Jet2 Holidays or Love Holidays, it has still
felt pressure from the market and found
trading tough.
One positive outcome from the turbulent
environment has been the opportunity it
has created for TravelSupermarket to
cement its position as a trusted media
commentator. The Press office observed
a 40% increase in coverage compared to
2018, across print and broadcast media,
with our spokesperson Emma Coulthurst
commenting regularly on BBC News and
National Radio. This has resulted in
increased brand awareness.
28
Moneysupermarket.com Group PLC Annual Report and Accounts 2019
Connecting you with the very
best products and services
Our Reinvent strategy noted the rapid rise of new services which engage users
about their finances through banking and personal financial management
tools. As a result, a key pillar of Reinvent is to ‘take price comparison to the user’
by delivering the Group’s comparison services to businesses that are
developing these tools. To enable this, in August 2018 we acquired Decision
Tech for its leading B2B price and product comparison capabilities across
home communications, broadband and mobile. In 2019, Decision Tech
launched Energy comparison and MoneySuperMarket now offers these
comparison services to new audiences
In early 2019, within seven months of
the acquisition, Decision Tech delivered
a new energy comparison service to the
saving and smart money-management
app, Yolt (an ING business). Decision
Tech developed its new energy
application platform interface and white
label offering by leveraging the Group’s
energy service that powers the
MoneySuperMarket website, the Group’s
mobile apps and MoneySavingExpert.
This required deep integration and
cooperation across MoneySuperMarket
and Decision Tech. It has also since
won contracts with Emma Money
Management (a budgeting App), Totally
Money, Love Energy Savings and Snoop,
with the new business funnel looking
very promising.
By the end of its first year in the Group,
Decision Tech has established itself in
the UK market as a leading provider of
branded energy comparison solutions.
Its new energy capability complements
Decision Tech’s highly-regarded
market-leading B2B home
communications service that powers
other price comparison sites.
31m+
Number of visitors to
Decision Tech price
comparison platform
Decision Tech continues to provide rapid
product releases, account development,
and timely and actionable management
information across this new channel for
its partners and customers. A new
energy monitoring service is expected to
go live in March which will allow Decision
Tech’s partners to automatically monitor
customers’ contract end-dates.
Decision Tech continues to progress well
and has become a valuable contributor
to the Group. It has delivered growth
across the MoneySuperMarket home
communications channel. It is seeing
strong demand from new and existing
customers who would like to deliver
energy comparison services in 2020.
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Moneysupermarket.com Group PLC Annual Report and Accounts 2019
29
30Moneysupermarket.com Group PLC Annual Report and Accounts 2019The Group’s revenues increased 9% to £388.4m (2018: £355.6m) and adjusted EBITDA to £141.5m (2018: £129.4m), up 9%”Group revenue grew by 9% to £388.4m (2018: £355.6m), with profit after tax growing slightly ahead of this at 10% to £94.9m (2018: £86.6m). When reviewing performance, the Board reviews a number of adjusted measures, including adjusted EBITDA which increased 9% to £141.5m (2018: £129.4m) and adjusted EPS which grew 5% to 18.2p (2018: 17.4p), as shown in the table below.This year we adopted IFRS 16, the new accounting standard for leases, using the modified retrospective approach. Prior year numbers have therefore not been restated and are disclosed under IAS17. See “IFRS 16 – Leases” below, for further detail.Extract of Consolidated Statement of Comprehensive Income2019£m2018£mRevenue388.4355.6Cost of sales(122.0)(102.3)Gross profit266.4253.3Operating expenses(148.1)(145.3)Operating profit118.3108.0Amortisation and depreciation20.914.7EBITDA139.2122.7Reconciliation to adjusted EBITDA:EBITDA139.2122.7Impairment of Property, Plant & Equipment–0.8Strategy related costs:Strategy review and associated reorganisation costs2.34.2Deal fees–1.7Adjusted EBITDA141.5129.4Adjusted earnings per ordinary share:– basic (p)18.217.4– diluted (p)18.217.3Full Consolidated Statement of Comprehensive Income see page: 116.A reconciliation to adjusted EPS is included in note 10.Scilla GrimbleChief Financial OfficerFinancial Review Strategic reportGood trading performance with revenue up 9%We have delivered good financial results whilst continuing to progress Reinvent, our strategy to improve the customer experience and deliver new market growth Revenue
Insurance
Money
Home Services
Other revenue
Total
Revenue
2019
£m
188.4
86.0
68.6
45.4
388.4
2018
£m
183.0
88.1
49.2
35.2
355.6
Growth
%
3
(2)
39
29
9
During the year, Group revenue grew 9%; excluding Decision Tech
(which was acquired in August 2018), Group revenue grew 5%.
Insurance grew 3%. Our natural search positions for key insurance
search terms were consistently high in 2018 and in the first half of
2019. However, in the second half of the year our natural search
positions were more volatile and weaker on average. This meant we
had fewer customers coming to us via natural search which
suppressed our revenue growth across the vertical.
Gross profit
Gross margin fell from 71% to 69% in the year. As anticipated, around
one percentage point of this reduction was caused by a full year of
consolidation of Decision Tech results, as B2B has lower margins than
B2C. The remaining reduction was caused by consumers across our
businesses continuing to shift to mobile and by weaker natural search
positions.
More customers are choosing to visit our sites from their mobile
devices. In comparison to a desktop customer, mobile customers are
less committed to the transaction as evidenced by the lower
conversion typically seen on mobile. They are also more likely to
come to us through paid search which is more prominent on smaller
screens.
While our work on customer experience optimisation is helping to
improve the journey on mobile devices and increase conversion,
margins for mobile visitors remain lower than those for desktop
visitors. In aggregate, we estimate the shift to mobile devices placed
about one percentage point downward pressure on gross margin.
Our car and home channels grew well despite these natural search
headwinds, and the continued absence of premium inflation in car.
We receive fewer visitors when premiums are stable or falling than
when customers see premiums rising.
The reduction in Insurance customers from natural search, which is
explained above, added further pressure to gross margin, particularly
during the second half. This is because natural search is a higher
margin source of customers than average.
Money revenue declined by 2% during the year. Our Money business
splits into two main parts, credit products, accounting for over three
quarters of Money revenue, and banking products. The reduction in
availability and attractiveness of promotional products significantly
impacted switching levels for banking products during the year,
especially in the second half. Credit performed well over the year
although in the final quarter the market slowed and consumer search
demand for credit products fell.
Home Services delivered very strong performance throughout the year,
growing 39%, driven by high levels of energy switching. This strong
result highlighted that healthy levels of customer savings and switching
are possible within the new energy price cap regime.
We maximised the energy switching opportunity through a
combination of leading offers from providers, improvements to the
customer journey and leveraging the authority of MSE. Energy is a
relatively low engagement channel but MSE’s editorial strength and its
Cheap Energy Club helped us overcome this and provide the stimulus
for users to switch. The weekly tip email, which is distributed to 10.5
million MSE users, drew attention to the strong offers from providers
and high levels of savings available to users. MSE was also compelling
in explaining what the price cap meant to their users.
Within the Other category, Decision Tech contributed £24.8m to
revenue, with both its B2B and B2C home communications
businesses performing well. TravelSupermarket continued to
underperform, with visitors for package holidays and car hire falling
and a challenging macro environment for the travel market adversely
impacting the first half.
Operating expenses
Distribution expenses
Administrative expenses
Operating expenses
Within administrative expenses
Amortisation of software
Amortisation of acquisition related
intangible assets
Depreciation
2019
£m
29.9
118.2
148.1
2018
£m
30.2
115.1
145.3
14.0
11.8
2.4
4.5
1.5
1.4
The MoneySuperMarket brand relaunch did not significantly increase
our marketing spend year on year and therefore we were able to
manage distribution expenses in line with the prior year. Spending
levels on TV and media were similar to 2018.
Administrative expenses increased by 3% to £118.2m (2018: £115.1m).
A full year of Decision Tech ownership added an incremental £5.3m
to these costs, which was partially offset by lower adjusting item
charges year on year (£3.5m lower than 2018) which are detailed in
the table below.
Technology amortisation charges for the year increased from £11.8m
to £14.0m due to the full year impact of several large technology
assets that went live in the second half of 2018.
Depreciation is £3.1m higher in 2019, £2.5m of this is due to the
adoption of IFRS 16 as lease costs are now largely reflected through
depreciation charges.
Moneysupermarket.com Group PLC Annual Report and Accounts 2019
31
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32Moneysupermarket.com Group PLC Annual Report and Accounts 2019Adjusting items2019 £m2018£mImpairment of property, plant and equipment–0.8Amortisation of acquisition related intangible assets2.41.5Strategy related costs: Strategy review and reorganisation costs2.34.2 Deal fees–1.74.78.2The acquisition of MSE in 2012 by the Group gave rise to £12.9m of intangible assets excluding goodwill. These are being amortised over a period of 3-10 years with a charge in £1.0m in 2019 (2018: £1.0m). The acquisition of Decision Tech in August 2018 gave rise to £8.7m of intangible assets excluding goodwill, which are being amortised over a period of 3-10 years. The charge incurred in 2019 is £1.4m (2018: £0.5m). Together these amortisation charges totalled £2.4m (2018: £1.5m).The Group incurred £2.3m (2018: £5.9m) of strategy related costs associated with the strategy review and reorganisation, including the Manchester relocation. We do not anticipate any material strategy related costs during 2020.Prior year adjusting items included £1.7m of deal fees in relation to the acquisition of Decision Tech.Key performance indicatorsThe Board reviews key performance indicators (KPIs) to assess the performance of the business against the Group’s strategy. We measure five key strategic KPIs: 20192018Estimated customer savings £2.0bn£2.1bnNet promoter score7474Active users13.1m12.9mRevenue per active user£16.40 £15.90Marketing margin61%63%Estimated customer savings: This is calculated by multiplying sales volume against the average saving per product for core channels, the balance of the calculation is a company estimation.Net promoter score: The twelve monthly rolling average NPS (1 Jan - 31 Dec inclusive) measured by YouGov Brand Index service Recommend Score weighted by revenue for each of our brands (excluding Decision Tech’s consumer brands) to create a Group-wide NPS.Active users: The number of unique accounts running enquiries in our core seven channels for MoneySuperMarket (Motor insurance, Home insurance, Life insurance, Travel insurance, Credit Cards, Loans and Energy) in the prior 12 month period. Revenue per active user:This is the revenue for the core seven MoneySuperMarket channels divided by the number of active users.Marketing margin:The inverse relationship between revenue and total marketing spend represented as a percentage. Total marketing spend includes the direct cost of sales plus distribution expenses.We estimate that our MoneySuperMarket customers saved £2.0bn in 2019. This is a good performance given the average saving from car insurance, the largest channel, has reduced.Trust and satisfaction in our brands remain strong, with a healthy net promoter score being maintained, in line with last year.The number of active users increased slightly to 13.1 million. Within this, the number of customers making an enquiry within energy, car insurance and credit grew, offset by declines in travel insurance.A number of factors impact the increase in revenue per active user to £16.40, including the mix into higher converting channels and an increase in the number of users engaging in more than one channel.The marketing margin reduction reflects the dynamics described under gross profit, specifically the consolidation of Decision Tech, the transition of customers to mobile and the weaker natural search positions.Alternative performance measuresThe Group uses a number of alternative (non-Generally Accepted Accounting Practice (‘non-GAAP’)) financial measures which are not defined within IFRS. The Board reviews adjusted EBITDA and adjusted EPS alongside GAAP measures when reviewing the performance of the Group. The Group has moved from a period of significant capital investment to investing in customer experience optimisation and the in-house product engineering capability. This has made capital investment and amortisation less relevant. Therefore, adjusted EBITDA alongside adjusted basic EPS has become a more relevant performance measure. Executive management bonus targets include an adjusted EBITDA measure and the long-term incentive plans include an adjusted basic EPS measure.The adjustments are separately disclosed and are usually items that are non-underlying to trading activities and that are significant in size. Alternative performance measures used within these statements are accompanied with a reference to the relevant GAAP measure and the adjustments made. These measures should be considered alongside the GAAP measures.DividendsThe Board has recommended a final dividend of 8.61 pence per share (2018: 8.10p), making the proposed full-year dividend 11.71 pence per share (2018: 11.05 pence per share) and reflecting our progressive dividend policy. The final dividend will be paid on 14 May 2020 to shareholders on the register on 3 April 2020, subject to approval by shareholders at the Annual General Meeting to be held on 7 May 2020. Further information on our dividend policy is on page 61.Financial Review continued Strategic report Tax
The effective tax rate of 18.2% (2018: 19.0%) is below the UK
statutory rate of 19.0% (2018: 19.0%) due to prior year adjustments.
The Group expects the underlying effective rate of tax to continue to
approximate to the standard UK corporation tax rate.
Business model
The Group has a simple business model – matching customers to the
right providers. It uses online services to help customers to compare a
wide range of products in one place and make an informed choice when
taking out the product most suited to their needs.
Earnings per share
Basic reported earnings per share for the year ended 31 December
2019 was 17.7p (2018: 16.2p). Adjusted basic earnings per ordinary
share increased from 17.4p to 18.2p per share.
For our providers, it offers an efficient and cost-effective way to reach a
large volume of informed customers who are actively looking for a
product. For the majority of our services, we receive a success-based
marketing fee from the providers. This business model operates along
the following principles:
The adjusted earnings per ordinary share is based on profit before
tax before the adjusting items described above. A tax rate of 19.0%
(2018: 19.0%) has been applied to calculate adjusted profit after tax.
Cash flow and balance sheet
Operating cash flow remained robust and grew 7% year on year. The
£5m working capital outflow was driven by higher receivables as a
result of mixing into verticals and providers with longer working
capital cycles. The Group ended the year in a net cash position of
£24.2m (2018: £29.8m).
Our technology capital expenditure continued to fall in 2019 to
£10.7m (2018: £12.9m), reflecting the ongoing shift of spend towards
operating expenditure. Our reinvestment rate has fallen from 11% to
9% as we continue to leverage our technology platform for growth
across the Group.
In 2020, we expect technology capex to be in the region of £10m and
the technology amortisation charge to be in the region of £13m.
The Group has a revolving credit facility (‘RCF’) of £100m in committed
funds, which matures in September 2021 with the ability to apply for
a one or two year extension to this facility. At 31 December 2019 the
Group was not utilising any of the facility. The Group also has an
accordion option to apply for up to an additional £100m of funds
during the term of the RCF.
IFRS 16 - Leases
As expected, the adoption of IFRS 16 has impacted the consolidated
statement of comprehensive income in 2019, reducing operating
lease costs by £2.7m and reflecting these lease costs through
depreciation charges of £2.5m and finance costs of £1.2m. This
increased reported 2019 EBITDA by £2.7m. On the balance sheet at
31 December 2019, adoption of IFRS 16 meant the recognition of
lease assets and liabilities of £29.7m and £34.4m respectively. The
Group adopted IFRS 16 using the modified retrospective approach
and therefore the prior year has not been restated.
Viability statement
As required by Provision 31 of the 2018 UK Corporate Governance
Code, the Directors have assessed the prospects of the Group over a
three-year period to December 2021. In making this assessment the
Directors took account of the Business Model and Principal Risks set
out on pages 14 to 15 and 38 to 39 of the Strategic Report.
•
•
the Group relies on customer transactions for its revenues and
does not have long-term contracted revenue streams – the Group
makes money when its customers find the product they want,
switch to it, and save themselves money;
customers will continue to see value in shopping around for
products and services and will aim to save money by doing so; and
• providers will want to acquire new customers and develop
products and services to fulfil that strategy.
The Group’s strategic priorities are: leading trusted brands, leading
provider offer, customer experience optimisation and new market
growth including making price comparison more personalised,
extending price comparison to new platforms and enhancing
mortgage price comparison.
The Strategic Report sets out the Group’s performance against the
main KPIs which the Board monitored for the year ended
31 December 2019. The Board monitors and reviews progress
against three time horizons: quarterly to review and reforecast
performance against the annual plan and budget; annually to
establish a clear annual plan and budget that will deliver against the
strategic plan; and a three-year strategic plan re-assessed annually, to
determine the strategy of the Group.
The Board noted the commentary issued by the Financial Reporting
Council suggesting that viability statements should be extended
beyond a period of three years however, due to the nature of our
economic, technological and regulatory environment, the Board did
not consider it appropriate to alter its current timeframe due to the
following reasons:
• The expected lifecycle of the Group’s front-end technology
•
platforms is three years and this reflects the frequent changes in
the way that consumers choose to use technology;
It is difficult to forecast revenues and costs beyond three years
given that the Group’s revenues and costs are not materially
covered by long term contracts; and
• Within three years costs could be substantially restructured to
compensate for a major fall in revenues.
As such, the Board proposes to keep the time frame as three years
rather than extending beyond this.
Moneysupermarket.com Group PLC Annual Report and Accounts 2019
33
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34Moneysupermarket.com Group PLC Annual Report and Accounts 2019Risk managementAs part of the review of the strategic priorities, the Board identified the Group’s Principal Risks to delivering these priorities which represent a risk or combination of risks in severe but reasonable scenarios that can seriously affect the future prospects or reputation of the Group through threatening its business model, future performance, solvency or liquidity. These include competitive environment and consumer demands, brand strength and reputation, data processing and protection, data security and cyber, business transformation and relevance to partners. In addition, the Directors believe that the Group faces risks around regulation, government policy and economic conditions, especially as that may influence the availability of attractive products for customers. The changes in the Principal Risks are outlined on pages 38 and 39.The risks described above were assessed in a range of scenarios, encompassing: •Change in market dynamics and conditions – the financial impact of a loss of market share in car and home insurance was considered. •Significant data breach – the financial impact of fines was considered along with the associated reputational damage. •Change in economic environment – the financial impact on trading of a significant economic downturn. Principal risks covered while assessing the above scenarios included: •Competitive environment and consumer demands •Brand strength and reputation •Economic conditions •Data processing and protection •Data security and cyber •Regulation •Economic conditionsThe results of this scenario modelling showed that no individual event or plausible combination of events would have a financial impact sufficient to endanger the viability of the Group in the period assessed. It would therefore be likely that the Company would be able to withstand the impact of such scenarios occurring over the assessment period.The assessment consisted of scenario (stress) testing including one combined scenario for those with impacts of medium or higher likelihood and moderate or higher residual risk. These stress tests involved estimating the impact on revenues, EBITDA and net cash, together with reverse stress testing to identify the theoretical sensitivity that the Group could absorb. The Directors also considered possible mitigating circumstances and actions in the event of such scenarios occurring, including the availability of the Group’s banking facilities, reduction of future dividends or the slowdown of capital expenditure.The Board manages risks across the Group through a formal risk identification and management framework, designed to ensure that risks are properly identified, prioritised, evaluated and mitigated to the extent possible. Key aspects of this framework include: •a Risk Appetite Statement expressing the amount and type of risk the Board is willing to accept to achieve its strategic objectives; •regular assessments of current and emerging risks being faced by the Group including internal control effectiveness and mitigating actions; •risk metrics and thresholds which are monitored as potential indicators of risk; •scenario planning based on the Principal Risks; and •oversight from the Risk and Compliance and Internal Audit functions.Viability assessmentIn making its assessment of viability, the Board has considered the resilience of the Group using scenario-planning based on the Principal Risks to test the Group’s planned earnings, cash flows and viability over the three-year period. Using its judgement on the likelihood of the Principal Risks and the probability of them being interrelated, the Board assessed the risks separately and in certain combinations of stressed scenarios. In arriving at its conclusion, the Board is making the assumption that the key aspects of customer and provider behaviour set out above which underpin the business model will continue. It is also assuming that customers and providers will continue to want to transact online.Based on the Company’s current position and Principal Risks, together with the results of this robust assessment and the Company’s ongoing risk management processes, the Directors have a reasonable expectation that the Company will be able to continue in operation and meet its liabilities as they fall due over the three-year period of their assessment.Going concernHaving reassessed the Principal Risks, the Board is satisfied that the Group has sufficient resources, liquidity and available bank facilities (set out in note 17 of the Financial Statements) to continue in operation for the foreseeable future, a period of not less than 12 months from the date of this Report. Accordingly, the Directors continue to adopt the going concern basis in preparing the financial statements.Investment propositionThe Group is a data-driven online marketplace, providing market-leading exclusive products to customers, value to our providers and a track record of returns to investors. It is a Group with leading brands, a diversified provider base and a large number of customers as well as core strengths in marketing, journalism and provider relationships. The Group operates in a wide set of markets, each with significant headroom and growth opportunities. We are delivering on our Reinvent strategy which is ensuring we reaccelerate core growth and unlock future new ways of growth for the business. Investors benefit from investing in a highly cash generative business with a progressive ordinary dividend policy.Financial Review continued Strategic report 35Moneysupermarket.com Group PLC Annual Report and Accounts 2019Financial StatementsStrategic ReportGovernanceRisk management approachIn common with many businesses, the Group faces risk in all areas of its activity. The Group seeks to understand its risks and manage them appropriately. Effective risk management is vital in enabling the Group to achieve its strategic objectives and to secure the business for the long term, whilst ensuring the desired outcomes for consumers. Risk management is a key element of the Group’s decision-making processes and, alongside its governance structure and system of internal control, gives the Board assurance that risks are being appropriately identified and managed, in line with its risk appetite.Governance and oversightA governance and oversight structure is in place, with clearly defined lines of responsibility, accountability and delegation of authority.The Board is ultimately responsible for the overall effectiveness of risk management across the business, supported by the Risk Committee. The Board delegates day-to-day responsibility to executive management. Executive management owns the Group risks, is responsible for ensuring that the business effectively manages risk and takes appropriate and timely action where issues are identified. The Risk Committee oversees executive management on behalf of the Board in the management of risks.Horizon scanning is undertaken by the legal, risk and compliance teams in order to keep abreast of potential emerging risks. The Risk Committee’s agenda retains flexibility in order to discuss the mitigation of emerging risks as they are identified. The Board has carried out a robust assessment of the Principal Risks facing the Group, including those that would threaten its business model, future performance, solvency or liquidity. Our Principal Risks and uncertainties are outlined on pages 38 and 39, along with a description of how they are being managed.Identify if further controls needed • Quantify net risk • Identify existing risk mitigation •• Monitor and control • Identify risks • Quantify gross riskRisk Management ProcessRisk management governance and oversight •Framework, policy and procedures •Roles and responsibilities •Appetite and tolerance •Risk registers and risk assessmentRisk management culture •Values, behaviours and communication •Training, education and awareness •Embedding in decision-making •Continuous improvementRisk Management Strategic report 36Moneysupermarket.com Group PLC Annual Report and Accounts 2019RoleResponsibilitiesBoard •Approval of Risk Appetite Framework and Statement for the Group. •Carry out an assessment (at least annually) of Principal Risks and effectiveness of risk management and internal control policies; and report to shareholders on such matters. •Assessment of the effectiveness of Risk Appetite Framework and system of internal control.Risk Committee •Advise the Board on Risk Appetite Framework and Statement for the Group. •Review and oversight of Risk Register. •Assessment of identification and measurement of risks. •Oversight of executive management in management of risks.Management (1st Line of Defence) •Ensure risk management is an integral part of implementing the business strategy. •Operate the business within set risk appetite and tolerances. •Responsibility for managing risks and implementing effective controls. •Implement appropriate policies to identify and evaluate risks.Risk & Compliance(2nd Line of Defence) •Monitor against Risk Appetite Framework and Statement, risk profile, internal control effectiveness and management actions. •Monitor and update the Risk Register. •Co-ordinate appropriate and timely delivery of risk management information to executive management and the Risk Committee. •Advise and challenge management on risk management and internal control processes. •Develop and implement risk management policies, tools, techniques, methodologies, analysis, communication and training.Internal Audit (3rd Line of Defence) •Monitor effectiveness of risk management processes. •Perform tests of controls effectiveness. •Identify and agree corrective actions with management. •Liaise with Risk & Compliance function, including in relation to mapping of assurance activities to the Group’s significant risks. •Report to the Audit Committee.In addition, the Audit Committee performs an annual assessment of the risk management and internal control framework, covering financial, operational and compliance controls including the: •assessment of the risk management framework for identifying and monitoring risks, with consideration of the integration with strategic and business planning processes. This is supported by independent reporting on risk management and internal controls by the Internal Audit function or independent third parties, including the external auditor; •assessment of the extent, frequency and quality of risk management and internal control reporting; •review of the resolution of issues arising from internal control failings or weaknesses; and •review of the effectiveness of the financial reporting processes. The Audit Committee makes a recommendation to the Board on risk and internal control effectiveness which the Board considers, together with reports from the Risk Committee, in forming its own view on the effectiveness of risk management and internal control systems.Risk management frameworkDuring 2019, we have monitored the risks associated with the Group’s strategic priorities, strengthened our management of data security and cyber risks and have extended our risk management framework to Decision Tech. This year we have also focused on the potential impact of a no-deal Brexit, and regulatory developments such as the Senior Managers & Certification Regime, could have on our Risk Appetite Framework & Statement, and have advised the Board on the associated risks.Risk appetite‘Risk appetite’ defines the level and type of risk the Group is able and willing to accept in order to achieve its strategic objectives. The Group’s risk appetite influences the Group’s culture and operating decisions, and is reflected in the way risk is managed. The Group Risk Appetite Statement is reviewed at least annually, in line with the strategic direction of the Group, recent experience and the regulatory environment, and is subject to Board approval.There are certain risk areas where we have a very low appetite such as complying with applicable laws, including applicable regulatory requirements. This means that we take actions to avoid or eliminate this risk as far as possible. In other areas, such as strategy, we recognise the importance of managed risk-taking in order to achieve business objectives and goals.Risk Management continued Strategic report Risk identification and assessment
The Group adopts formal risk identification and management
processes which are designed to ensure that risks are properly
identified and evaluated, in line with risk appetite. The identification of
significant risks is informed using a bottom-up and top-down approach
with each business area identifying new risks as well as re-assessing
those already being monitored. To aid in the identification of risks and
development of associated mitigating actions, risks are categorised into
strategic, financial and operational/conduct risks. During 2019, we
updated the risk register in line with the evolution of our Group
strategy. In addition, our regular and ongoing risk oversight culminates
in a robust risk and control assessment at year end across all areas of
the business, in order to understand the strength and performance of
the controls in place, and potential gaps and weaknesses.
Management reporting
Timely and accurate management information is provided to the right
people to support management decisions and manage risk effectively
within the Group.
Should risk exposures be identified as being outside the Group’s risk
appetite, this is escalated and reported to the Risk Committee,
alongside clear action plans to bring the risk within tolerance, with
appropriate timescales. The type and extent of any mitigating actions
will be determined by the level and nature of the risk and the Group’s
risk appetite.
Future developments
We will continue to ensure that risk management is part of everyday
business decision-making and is understood by our wider business.
We will continue to develop our management information in the light
of our strategic initiatives and ensure that specialist risk knowledge is
readily available to each of our brands to enable them to take and be
fully accountable for risk-based decisions, whilst providing an effective
level of risk and compliance oversight for the Group.
We will continue to enhance our risk management framework in
specific areas of focus, including cyber risks and operation resilience,
as well as enabling the identification and mitigation of emerging risks.
Reporting enables management: to have clear visibility of the most
relevant risks; to identify areas of concern and/or priority; to have
access to detailed information to enable root cause analysis and
identification of underlying trends; and to identify, escalate and
potentially mitigate the impact of new operational risk concerns in
a timely manner.
Principal Risks (as at 31 December 2019)
Outlined here are the most significant risks that may affect our
future. There have been no changes to our Principal Risks from those
reported in our 2018 Annual Report. We assess the probability of the
risk materialising and the impact of the risk on a residual basis (taking
into account the benefit of mitigating controls).
Our Principal Risks (as at 31 December 2019)
Outlined here are the Group’s most significant risks that may affect our future. We assess the probability of the risk materialising and
the impact of the risk on a residual basis (taking into account the benefit of mitigating controls).
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2
4
5
3
8
6
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Probability
1
8
7
6
5
4
3
2
1
1 Competitive environment and
consumer demands
2 Brand strength and reputation
3 Data processing and protection
4 Data security and cyber
A D
A B
B C
B C
5 Business transformation
A B C D
6 Relevance to partners
7
Economic conditions
8 Regulation
C D
A C
A C
Strategic Priorities:
A
B
C
D
Customer
experience
optimisation
Leading
trusted
brands
Leading
provider
offer
New market
growth
Moneysupermarket.com Group PLC Annual Report and Accounts 2019
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38Moneysupermarket.com Group PLC Annual Report and Accounts 2019The table below summarises the Board’s view of the material strategic, financial and operational/conduct risks to the Group and how the Group seeks to mitigate them.Risk area and trendDescriptionRisktypeStrategic priorityMitigating activitiesDevelopments in 2019Competitive environment and consumer demandsThe Group operates in a dynamic and highly competitive marketplace with new competitors entering the market. We must continually innovate to keep ahead of competitors and changing consumer demands.SRAD Continuous innovation of new services and ongoing evolution of existing propositions.Regular engagement with consumers to understand changes in how they use our services.Investment in our technology platforms to improve customer experience and make comparing products easier.Our focus in 2019 has been on the personalisation of customer journeys, including the launch of new engagement tools (energy monitor and credit monitor). Our mortgage proposition is developing well and we are engaging with the FCA to ensure our customer journey remains compliant.We continue to integrate Decision Tech within the Group, align risk management and governance processes, and support them with new B2B partnerships.Brand strength and reputationThe Group must maintain consumer awareness of and engagement with its key brands.SRAB Investment in marketing across a range of media to maintain the Group’s brands in consumers’ minds.Arrangement of exclusive and competitive deals to offer consumers market-leading products and prices.In 2019, our Group NPS remained level at 74. This year we re-launched our MoneySuperMarket brand, which has been well-received by our customers. The powerful brand and campaigning work of MoneySavingExpert drew a record number of visitors on issues such as Brexit and PPI.Data processing and protectionThe Group must appropriately process and control the data our customers share. As a leading website operator, the Group may experience operational issues which result in incorrect or incomplete data being transferred to or from partners.ORBC Understanding and assessment of the data we collect from our customers and how we use it.Specialist data protection knowledge within our Risk & Compliance, Technology and Legal teams. Annual data protection training for all colleagues.Rigorous controls and monitoring of internal processes. Regular ongoing quality assurance procedures.We continue to embed data protection and GDPR requirements including enhanced governance arrangements, embedding of Data Privacy Impact Assessments and stronger processes to respond effectively to enhanced rights of consumers.We have invested in quality assurance and testing within technology release processes and strengthened controls in respect of data mapping.Data security and cyber riskThe Group must protect itself from security breaches or successful cyber attacks which could impact our ability to operate our websites and services.ORBC Rigorous monitoring and testing of the Group’s systems and infrastructure. Enhancing controls to our data and systems through the implementation of our Information Security Management System (‘ISMS’).With the ongoing implementation of our cyber governance framework and ISMS, our approach to data security has matured considerably and cyber risk is better understood and more effectively managed.Principal Risks & Uncertainties Strategic report Risk area
and trend
Business
transformation
Relevance to
Partners
Economic
conditions
Regulation
Description
Risk
type
Strategic
priority
Mitigating
activities
Developments
in 2019
The Group must
manage the
implementation of our
new strategic priorities
appropriately, without
our focus being
disrupted. We must
retain and recruit
colleagues with strong
industry, technology
and marketing
expertise.
The Group relies on its
partners to access
competitive products
and technological
integration to provide
a seamless customer
experience.
Weaknesses in the UK
economy including
those occurring as a
result of Brexit, may
lead to more
challenging conditions
for the Group and
financial performance.
The Group must
understand and
comply with existing
and new regulatory
requirements.
OR
SR
SR
SR
SR
A
B
C
D
C
D
A
C
A
C
Strong management
structures which provide clear
and straightforward
responsibilities and
accountabilities in the delivery
of our strategic priorities.
Effective governance
arrangements to oversee
implementation of strategic
priorities.
Structured approach to
recruitment and retention of
high quality talent, combined
with learning and
development activities for
existing colleagues.
Working closely with partners
to ensure high quality and
appropriate products and to
maximise the opportunities
for partners to acquire
customers in a cost-effective
manner.
Maintaining a diversified
business across a range of
products.
Regular monitoring of market
conditions and environment.
Focusing on maintaining
control of our cost base.
We maintain regular and
ongoing dialogue with key
regulatory bodies.
Our Risk and Compliance
team works across the Group
to ensure it remains compliant
with new and existing
regulations.
Embedding an innovative and inclusive
culture has been a priority.
Focused management of our strategic
initiatives including Decision Tech
acquisition, optimising the customer
experience and the personalisation of
customer journeys.
Our strategy to relocate a significant
number of technology and product
roles to our new Manchester office is
now complete.
Strong relationships with partners
enables us to access exclusive deals
and offers for our customers.
We have enhanced our customer
insights and data analysis for partners
to help them understand how they can
further improve their products.
The continued diversity of the Group
across a portfolio of brands and channels
offers the Group protection from cyclical
economic changes.
This year we have continued to assess
the potential challenges associated with
Brexit, with a focus on planning for a
no-deal outcome.
We have monitored and responded to
new and emerging regulatory
developments. We have proactively
engaged with regulators, including the
FCA (in respect of the Insurance
Distribution Directive and the Senior
Managers & Certification Regime),
Ofgem and the Competition and
Markets Authority.
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Risk type:
SR Strategic risk
OR Operational/conduct risk
Risk trend:
Increasing
Decreasing
Stable
Strategic Priority:
A Customer experience optimisation
B Leading trusted brands
C Leading provider offer
D New market growth
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40Moneysupermarket.com Group PLC Annual Report and Accounts 2019Sustainability overviewSustainability and Stakeholder Engagement Strategic reportThe Board recognises that the management of safety, wellbeing, environmental, social and ethical matters forms a key element of effective corporate governance, which in turn supports the strategy, long-term performance and sustainability of the business At Moneysupermarket Group, we understand that our behaviour,
operations, and how we treat our employees all have an impact
on the environment and society. We also understand the
importance of aligning our purpose and strategy with responsible
corporate decision-making to create value for our employees,
customers, shareholders and society in a sustainable way. Our
focus is to make a positive economic, environmental and social
contribution not just to the communities in which we operate, but
to the UK as a whole. Our commitment to reducing our
environmental impact continues to be recognised with the Group
being a constituent of the FTSE4Good Index Series, which
measures the performance of companies demonstrating strong
Environmental, Social and Governance (ESG) practices. In addition,
we have recently made a commitment to being carbon neutral by
the end of 2020. Further information on our plans is detailed on
pages 52 to 53.
Our commitment to sustainability underlines the responsibility
we have to our stakeholders to build long-term value. To
enable us to do this, we focus on the following three key ESG
elements:
• Minimising environmental impact;
• Our social responsibility; and
• Robust governance and ethics.
Minimising our environmental impact
Recent years have seen important developments in the climate
change agenda and growing momentum behind the drive to
tackle greenhouse gas emissions. As a responsible business,
we want to play our part in addressing environmental
challenges, and our employees, customers and our other
stakeholders expect this.
Whilst we may not be considered a major energy user, we are
aware of the impact that we have and in 2019 we have been
working to reduce the carbon emissions associated with our
operations. This has included investing in more
environmentally friendly office space, evaluating our ways of
working and reducing the amount of materials we use and
waste we generate. We have also begun work on our carbon
neutral initiative. See page 53 for more information.
Our social responsibility
We are a responsible employer and recognise that our success
is dependent upon the talent and diverse skillsets of our
employees. We are committed to investing in our employees’
health and wellbeing. Focus areas for 2019 included actively
promoting our ‘Work: Your Way’ flexible working policy and
creating an inclusive environment to ensure that our
employees can be their true, authentic selves where everyone’s
voice is valued. See pages 44 to 47 for further details.
In addition to the Group’s purpose of helping households save
money, we want to do more to maximise the social value that we
create. Through our partnership with The Prince’s Trust, we strive
to broaden and deepen our impact and create a lasting legacy
by running a range of money management initiatives for
young people.
The culture @MSMG is very
diverse and inclusive. I’ve
never felt like an outsider“
Swapna Bakshi
Mobile Quality Assurance
I started my journey in Tech in 2011, working
in India as a software tester. I moved to the
UK in 2016, which was a challenge for me
both personally and professionally. I now
work as a mobile app tester at
Moneysupermarket Group. Working as a
software tester enables me to learn so many
things. I’ve improved many of my soft skills,
such as communication and working as part
of a team. I believe you can always achieve
your goals with the right mindset and with
the right people to support you. I’m proud
to work for an organisation that has helped
me to achieve my goals and guide me
throughout my personal and professional
growth.
Robust governance and ethics
The Group recognises that driving better corporate behaviours
will provide improved returns over the longer term and we are
committed to operating responsibly and with high ethical
standards. We encourage innovation whilst championing best
practice and strong corporate ethics to ensure that the
impacts of our business activities are appropriately balanced.
We are proud of our robust corporate governance and risk
management processes and have a range of policies designed
to ensure that we maintain best practice in all our business
activities. Our policies include Cyber Security, Data Protection,
Modern Slavery and Anti-Bribery, and are accompanied by an
interactive training programme to ensure that these principles
remain front and centre in our employees’ minds. See page 61
for further details.
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42Moneysupermarket.com Group PLC Annual Report and Accounts 2019Sustainability and Stakeholder Engagement continued Strategic reportEngaging with our stakeholdersTo achieve our purpose, deliver our strategy and operate our business in a way that is sustainable, we need to build strong relationships with all of our stakeholders.We engage with our stakeholders in diverse ways to understand their views and priorities so that these can be taken into account in our decision-making. Read about how stakeholder views are communicated to and taken into account by the Board on page 72.s.172 statementThe Directors of Moneysupermarket.com Group plc – and those of all UK companies – must act in accordance with a set of general duties. These duties are detailed in the Companies Act 2006 and include a duty to promote the success of the Company.An explanation of how the Board performed its duties under s.172 of the Act is detailed on page 72 of the Corporate Governance Report. Further information on how we engage with our stakeholders is provided in the table below.StakeholderWhy it is important to engageStakeholders’ key interestsHow we engageOur peopleEmployee engagement is critical to our success. We work to create a diverse and inclusive workplace where employees can reach their full potential. Engaging with our employees ensures we can retain and develop the best talent. •Reputation •Reward •Career opportunities •Employee engagement •Training and development •Wellbeing •Health and safety •Our mechanisms for engaging with employees and providing opportunities for them to meet with Executive and Non-Executive Directors include: —Quarterly informal employee breakfasts —Regular Q&A sessions —Monthly CEO floor briefs, which are available on demand —Reinvent strategy roadshows to update employees on our strategic focus and future plans. •We have a designated NED Employee Champion, Sarah Warby, who has Board responsibility for championing the interests of employees by bringing their views to the boardroom, and an employee-led Group Employee Forum to feedback the needs, views and concerns of employees to the designated NED employee champion. •We conduct a bi-annual employee engagement survey, the results of which are reported to the Board. •We have active employee resource groups (ERG’s) for mental health and inclusion of underrepresented groups to provide us with a body we can engage with to help ensure our people can thrive. Our ERG’s have executive sponsors and regular contact with our designated NED employee champion. •We have an independent whistleblowing helpline to allow all staff to raise concerns confidentially.Customers and UsersUnderstanding the needs of our customers allows us to provide relevant products and services where customers can make meaningful savings, in order to differentiate us from our competitors. •Product and services performance and efficiency •Competitiveness and value •Compliance and data protection •Range of products and services •Ease of use and convenience •We undertake customer research including focus groups and surveys, with key insights shared with the Board and used to inform our strategy. •Our Board members listen to calls from customers on an annual basis to gain insight, and receive reports on our customer related KPIs. •Our MSE Forum has over 1.8 million members. •Our user experience researchers have worked with RNIB to understand the customer experience of our blind and visually impaired customers.ShareholdersAccess to capital is vital to the long-term performance of our business. We ensure that we provide fair, balanced and understandable information to shareholders and investment analysts and work to ensure that they have a strong understanding of our strategy, performance, culture and ambition. •Financial performance and economic impact •Governance and transparency •Operating and financial information •Confidence in the Company’s leadership •Dividend growth/Return on investment •Our Directors and senior management engage with shareholders through regular updates, meetings and our AGM, at which shareholders can hear about our performance and put questions to the Board of Directors. Feedback is gathered from key investors at results roadshows and investor conferences, and tabled to the Board. •The investor relations section of our corporate website provides investor information and presentations, alongside other information reported to the market via the regulatory news service. •Analyst reports are provided to the Board, via our Board portal. Stakeholders’ key interests How we engage
Stakeholder
Suppliers
Why it is important
to engage
Our suppliers are critical to
our performance. We engage
with our suppliers to build
trusting relationships from
which we can mutually benefit
and to ensure that they are
performing to our standards
and conducting business to
our expectations.
• Cost-efficiency
• Long-term relationships
• Responsible procurement,
trust and ethics
• Technological advances,
including digital solutions
• Payment practices
• We have a rigorous onboarding process to drive responsible
procurement practices forward. This includes the General
Data Protection Regulation (GDPR) and information security,
Modern Slavery, Anti-Bribery and environmental impact.
• We engage our suppliers in a variety of ways including
tender processes and more informal meetings and
dialogue. These interactions cover a broad range of topics
such as cost efficiencies and ways of working.
• Our 360 feedback programme with certain key suppliers
provides insight into the supplier experience and ensures
continual improvement. We plan to roll out the programme
more broadly across our supplier base in 2020.
• Our top tier suppliers are overseen and performance-
managed by a third-party management programme.
• We monitor the diversity of our supply chain to gain a better
understanding of how minority groups are represented
across our supply chain.
• In line with the BEIS response to their consultation
document, ‘Creating a Responsible Payment Culture’, we
report on our payments to suppliers.
• Our Provider team of over 50 dedicated employees focuses
on managing the relationships with our 500+ providers
across 25 product types.
• We work collaboratively with our top two tiers of providers
to agree joint business plans, a highly successful initiative
that has increased engagement and had a positive impact
on our trading. For example, our strong provider
engagement and robust forward planning enabled us to
offer an exclusive energy tariff every day of the year through
November.
• We proactively engage with our providers to seek feedback
on how we can improve the quality of relationships such
that they are not simply transactional.
• We have invested to enhance our provision of performance
data to our insurance providers, and will launch a new
version of our market IQ portal in 2020 to give insurers
sophisticated pricing insight.
• We recognise that we have more to do to engage at senior
level in our Money vertical, where trading has been tougher
and we are working to address this with the arrival of our
new Commercial Director.
• Our proactive provider engagement has enabled us to
retain our price leadership in motor and home insurance
with a 45% reduction in spend on CPA discounts.
• We support charities local to our offices and beyond with
fundraising and volunteering initiatives.
• As part of our partnership with The Prince’s Trust, we have
held employee workshops, interview coaching and money
management workshops.
• Our work with local schools has included offering
experience days to encourage women into the tech sector.
• We strive to reduce our environmental impact and have
committed to being carbon neutral by the end of 2020.
• We maintain regular and ongoing dialogue with key
regulatory bodies, including the FCA, ICO, OFGEM, OFCOM
and CMA; and our Risk and Compliance team works across
the Group to ensure it remains compliant with new and
existing regulation.
• We have monitored new and emerging regulatory
developments, including the Senior Managers and
Certification Regime and engaged with the FCA to ensure
that we remain compliant.
• We continue to comply with our duties under the GDPR
regime.
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Moneysupermarket.com Group PLC Annual Report and Accounts 2019
43
Providers
We engage with our providers
to build strong relationships
and work collaboratively to
identify opportunities to help
our customers including new
and market-leading exclusive
products.
• Long-term relationships
• Trust and ethics
• Efficient customer acquisition
• Value creation
Communities/
Charities
We are committed to building
positive relationships with the
communities in which we
operate. We support
communities and groups local
to our offices and consider
the environmental and social
impacts of our operations.
• Local operational impact
• Health and safety and
environmental performance
• Long term partnership and
strategic alignment
Regulators and
Government
Open communication and
dialogue help to create
understanding of our
business, strategy and culture
and ensures regulatory and
legislative compliance.
• Openness and transparency
• Proactive and compliant with
new regulation and
legislation
• Treating customers fairly
• Impact on the environment
44Moneysupermarket.com Group PLC Annual Report and Accounts 2019Sustainability and Stakeholder Engagement continued Strategic reportCreating a great place to work: our people and cultureOur people are the engine of our success, and are both the creators and caretakers of our cultureCareer Cabins are a fantastic way to get colleagues to think about their job, their future, how they’re going to get there and to have constructive and meaningful conversations with managers” Moneysupermarket Group aspires to be recognised as a great place
to work. We are committed to prioritising the health and wellbeing
of our people and ensuring employees are valued equally. We strive
to attract and nurture diverse talent through investment in training
and development and engaging openly with employees, listening to
their views on the issues that matter to them.
We actively encourage employee involvement and consultation. As
outlined on pages 58 to 59, there is considerable emphasis on
keeping our employees informed of the Group’s activities via formal
and informal business performance updates, the Group’s regular
employee newsletter, and the circulation to employees of relevant
information including corporate announcements. Following the
appointment of Sarah Warby as Non-Executive Director Employee
Champion, we introduced a programme of Board Q&A sessions and
informal breakfast meetings to provide the opportunity for
employees to ask questions directly of Non-Executive Directors.
We also want our employees to share in the success of our business.
Our Employee Share Incentive Plan and Sharesave Scheme give
employees the opportunity to purchase ordinary shares in the company,
helping to encourage employee interest in the performance of the
Group and alignment with shareholder interests. The Group’s full range
of benefits reflects the differing needs and interests of our employees,
with a particular focus given to supporting their health and wellbeing.
Our flexible benefits provider offers an easy way for employees to access
a range of benefits, including the opportunity to buy or sell holiday days,
medical cover, gym memberships, as well as discounts on products and
services. We also offer employees a variety of social and wellbeing
activities. Annual social events include the football tournament and
summer and Christmas parties. We also provide a free comprehensive
employee assistance programme, LifeWorks, for guidance and support
on a range of personal and professional matters.
offering an individual stipend per person to invest in their
development, our Career Cabin programme of development around
five key skills, professional training, skillshots and digital learning
resources, as well as informal 'brown bag' meetings and panel events.
Our flagship ‘Cultivate Your Career’ programme aims to equip our
employees to succeed to the next stages of their careers. Launched in
2018, the programme has received positive feedback and generated
successful outcomes, with greater movement of people across functions
during the year. During 2019, 357 employees attended sessions focusing
on their values, strengths, network, confidence and future possibilities.
Every year we help employees by fully funding professional
qualifications, including CIMA, AAT and CICM.
We have partnered with The University of Exeter to enable a small
cohort of our Data team to study for an MSc in Data Science, an
innovative course designed for professionals wishing to study
alongside work.
Monitoring and assessing culture
Having the right culture means our employees are highly engaged in
delivering for our customers and users. The Group is committed to
cultivating an inclusive and collaborative environment that leads to the
best possible results. Twice a year we run an employee engagement
survey which asks a variety of questions about culture and employee
experience, including leadership, innovation, collaboration, career
development, diversity and inclusion, and the ability to get things done.
The results of the surveys are shared with the Board which facilitates
visibility and discussion on our culture. Key themes and improvement
actions are then communicated to employees via the monthly CEO
floor briefs and the annual Reinvent strategy roadshows. Suggestions
that we implemented during the year included greater investment in
enabling career development and upgrading IT equipment.
Learning and development
We seek to foster a culture of learning and growth for everyone,
giving employees the skills, knowledge and experiences to flourish as
well as to support sustainable business growth. In 2019 we invested
£750,000 in employee training, offering a broad and varied approach
to personal and professional development, encouraging employees
to explore what suits them best. Options include our Freedom Pot,
78% of our total workforce participated in our October 2019
engagement survey. Overall engagement remains positive, with 83%
of colleagues saying they would recommend us as a great place to
work, and 86% feeling they are able to actively manage and balance
their own work and time. There were also areas to improve which we
will be focusing on in 2020, such as management development,
innovation and getting things done.
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87%of employees believe that
their manager creates an
environment where they
can be themselves at work
83%of employees would
recommend
Moneysupermarket Group
as a great place to work
86%of employees stated that
they are able to actively
manage and balance their
own work and time
Source: October 2019 Employee Engagement survey
Moneysupermarket.com Group PLC Annual Report and Accounts 2019
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SocialGreenCommunityThriveMental Health First Aiders#Represent#REPRESENTEmployee Resource GroupsGroup Employee ForumCompany CharityWellbeing“46Moneysupermarket.com Group PLC Annual Report and Accounts 2019Sustainability and Stakeholder Engagement continued Strategic reportOur cultureOur commitment to transforming our culture to be more inclusive and innovative has been a key element of our Reinvent strategy and supports our purpose of helping households save money.We recognise that an inclusive environment, where employees can be their true, authentic selves and everyone’s voice is valued, regardless of their seniority, background or tenure, fosters better creativity and innovation and helps us thrive, both as individuals and as a team.In 2019 we also built on our commitment to supporting parents at work by introducing the Parental Leave Toolkit, online coaching support for parents and their line managers. It features checklists, top tip videos, interactive coaching tools and articles, and is relevant to new and prospective mothers, fathers, same sex partners, adoptive parents and anyone taking Shared Parental Leave.Our Employee Resource Groups ('ERGs') have been an effective means of creating a more inclusive culture. Approximately 10% of employees have been directly involved in one of our nine ERGs, which work on a range of issues, from equal workforce representation, mental health, physical wellbeing and employee voice to social, community, charitable and eco-friendly contributions. Thanks to the ERGs, colleagues benefited from awareness and educational events in relation to topics including mental health, Pride, Black History Month, as well as diverse social and wellbeing activities that bring employees together and celebrate our differences. Our behavioursTo reflect our culture we have articulated our Moneysupermarket Group behaviours – everyday standards we believe in, value and expect of each other, irrespective of role. Continually challenging ourselves to apply these behaviours every day is critical to ensure there are no barriers to performance, and differences between employees are seen as a source of strength that we draw upon to fulfil our purpose of helping households save money. In 2020 we aim to fully embed the behaviours in our processes and ways of working across talent acquisition, onboarding, performance management and career development.Create belonging Grow and develop Innovate to deliverBehaviours that drive our culture 47Moneysupermarket.com Group PLC Annual Report and Accounts 2019Financial StatementsStrategic ReportGovernanceIn 2019, several of our inclusion initiatives were recognised externally: •We were ranked at number 36 on The Inclusive Companies list; •Thrive, our mental health ERG, won best new workplace approach in the ‘This Can Happen’ Awards; •Work: Your Way, our new approach to flexible working, featured in Forbes as an example of an innovative approach to flexible working in financial services; •We were ranked number five of 400 UK companies in the 2019 MyFamilyCare Parental Leave Benchmark; •We were highly commended in the 2019 Business Culture Awards; •Finalist in the Inclusive Tech Alliance awards; and •Our Glassdoor ranking reached 4 out of 5, based on almost 80 anonymous reviews.There’s something really special about the power of an inclusive environment in driving innovation and business success’’Caoimhe KeoganChief People OfficerDedicated ‘space to innovate’, regular 'hackathons' and our Reinvent Awards are some of the ways in which we encourage employees to experiment with new and better ways to deliver for our customers and users.In May 2019 we ran a Month of Monumental Thinking, with almost 200 employees attending Innovation Beehive, Innovating User Experience or Coaching Circle workshops.We also introduced Microsoft Teams, a chat-based workspace, to bring colleagues, conversations and content together in one place to facilitate collaboration. With over 315 Teams created, this has quickly become a go-to tool for keeping information and communication flowing. 48Moneysupermarket.com Group PLC Annual Report and Accounts 2019EmployeesDirect reports ofExecutive ManagementBoard of DirectorsExecutive ManagementTeam Female MaleXX%XX%29%71%56%44%57%43%58%42%Sustainability and Stakeholder Engagement continued Strategic reportDiversityThe Group is committed to equal opportunities, and seeks to ensure that employees feel welcome, included, valued and recognised, and have fair and equal access to career development opportunities. No employee is discriminated against, directly or indirectly, on the grounds of colour, race, ethnic and national origins, sexual orientation or gender, marital status, disability, religion or belief, being part-time or on the grounds of age.We strive to have a workforce that is representative of our customers and users. This aspiration includes all aspects of diversity, beyond demographics, such as diversity of thought and background, which are more difficult to capture.As a result of some of the actions we have taken to create a more inclusive workplace, our gender diversity continued to improve. The average number of employees during 2019 was 776, of whom 329 were female and 447 male. The number of women in executive management rose to 29%, and women accounted for 44% of their direct reports. This means that we continue to exceed the Hampton-Alexander target of 33% for women on the Executive and amongst their direct reports. Gender Pay gapWe published our gender pay gap report in September 2019, and were pleased to note that since 2017 our gender pay gap has reduced by 16.6% points. Our mean gender pay gap is 18.5%, while the median pay gap is 18.6%. The gap arises from under-representation of women in certain highly paid functions such as technology and data, as well as under-representation of women in leadership roles. Whilst our long-term goal is to close our gender pay gap, we recognise that there is no quick fix and continue to focus on maintaining momentum towards positive progress. We are taking a number of actions to continue to minimise our gender pay gap, as outlined in the report on our corporate website at http://corporate.moneysupermarket.com.This is a 4.3% point improvement on 2018. Our mean (average)gender pay gap is18.5% S
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50Moneysupermarket.com Group PLC Annual Report and Accounts 2019Sustainability and Stakeholder Engagement continued Strategic reportMinimising our environmental impactWe strive to reduce our environmental impact and have committed to being carbon neutral by the end of 2020 and considering environmental and sustainability issues in all aspects of our operations and business activitiesKey initiatives in 2019During 2019 we continued to develop and drive environmental innovations across the Group. We have proactive Green Teams in each of our three locations which devise and implement local energy-saving and waste-reduction initiatives, including: •Installation of sparkling water Zip taps in our London and Manchester offices, resulting in significant reduction of single-use plastic bottles; •Use of passive infrared sensors (PIRs) to control the lighting in our offices; •Use of secure pull-printing and e-invoicing to reduce paper consumption; •Reduction of single-use cardboard boxes and cutlery to zero during lunch service in our Ewloe staff restaurant; •Donation of excess food from our Ewloe staff restaurant to a local charity; •Introduction of a loyalty scheme to reward the use of reusable cups in our on-site coffee bar in Ewloe, resulting in the reduction of disposable cup use; •Provision of a charging bay for electric cars in our Ewloe site; •Use of video-conferencing facilities in all of our offices to reduce our business travel ; •Recycling of waste oil from our on-site catering into useful products such as biofuels; and •Creation of an employee-led ideas channel to engage with our employees and generate new energy-saving and waste-reduction ideas. Case study
No. 1 Spinningfields
In September 2019 we moved into our new tech hub in
No.1 Spinningfields, Manchester. We worked closely with
our building developer and are proud to have achieved a
Building Research Establishment Environmental
Assessment Method ('BREEAM') rating of ‘Excellent’ for
our new offices. The environmental credentials of the
building were a key consideration for our selection of the
premises and No.1 Spinningfields has a low-base building
energy design through elements such as low-energy
automatic daylight dimming lighting systems, low-energy
lifts, a highly efficient chiller plant and high-performance
triple-glazed building facades.
We worked with our Green Teams to ensure that our
fit-out specification for the new offices was fully aligned
with the BREEAM ‘Excellent’ rating, which included the
installation of perimeter solar-control blinds and sub
metering of all floor plate electrical loads. Working with our
developers, we were able to push plant efficiency further
still, with the installation of air source heat pumps for
low-carbon heating and cooling to the individual offices.
We are delighted that all these works were carried out in
a manner that is sympathetic to the original building’s
environmental credentials, continuing the principles set
out in construction.
In addition, our London offices also has a BREEAM
excellence rating for exceeding regulatory requirements
regarding sustainability.
During 2019 the solar panels in our Ewloe office
generated energy savings of approx. 38,289 kWh, and we
recycled an estimated 98.45% of our commercial waste.
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52Moneysupermarket.com Group PLC Annual Report and Accounts 2019Sustainability and Stakeholder Engagement continued Strategic reportOur aims for 2020 •Being carbon neutral by the end of 2020; •We will ensure that the refurbishment of our Ewloe office incorporates environmentally friendly initiatives; •Our Green Teams will further engage and educate our colleagues on climate change issues with talks and initiatives run across all locations; •We will introduce food compost bins to further reduce the percentage of waste we send to landfill; •We will introduce a car lease benefit to incentivise employees to lease electric/low emission vehicles; and •Where possible we will use renewable energy across our sites.We have progressively reduced our impact on the environment; and are now considering the next phase of our sustainability journey including our commitment to becoming carbon neutral. We have chosen to partner with Delta Simons to assess our carbon footprint across the Group. Delta Simons is the Woodland Trust’s Carbon, Sustainability & CSR Partner, and has the capability to assist us in all stages of our carbon mitigation programme (assessment, target-setting, offset and tree-planting).We recognise that we are only part-way through our sustainability journey. Together, with our Green Teams, we will continue to develop and implement initiatives in order to have a positive impact on our environment. Green initiativeElectric vehicle charging at our Ewloe office How are we going to become carbon neutral?
Step 1
Assess our carbon footprint
This will involve compiling data on our energy usage such
as our direct emissions (e.g. air conditioning top-ups),
electricity and gas usage, and air and rail travel. The
external assessor will evaluate this data and produce a
report in accordance with the UK Streamlined Energy and
Carbon Reporting (SECR) requirements1 which will detail
our total emissions (in tonnes).
Step 2
Set targets and devise initiatives
We will set specific targets and continue to identify ways
to reduce our carbon footprint, including energy-efficiency
programmes, waste reduction initiatives and changes to
business travel.
Step 3
Offset remaining emissions
Inevitably it will not be possible to eliminate our emissions
completely, or in our desired timeframe, so we will work
with the external provider to offset our remaining
emissions via global verified carbon offsets (as defined by
the United Nations and the Kyoto Protocol) such as
hydro-electric power, wind turbines and preventing
deforestation of the Amazon. This will reduce our
emissions to net zero, making us carbon neutral. As our
initiatives start to deliver quantifiable benefits, our carbon
footprint will reduce so the amount that we will have to
offset via this route is anticipated to decrease year-on-year.
Greenhouse gas (‘GHG’) emissions
This section includes our mandatory reporting of greenhouse gas
emissions pursuant to the Companies Act 2006 (Strategic Report
and Directors’ Report) Regulations 2013. The methodology used to
calculate our emissions is based on the GHG Protocol Corporate
Standard. Emissions reported correspond with our financial year.
We have included emissions from both our owned and leased assets
for which we are responsible. Emissions are predominantly from gas
combustion and electricity use at our offices and data centres.
We have reported on all material emission sources which we
deem ourselves to be responsible for. Emission factors are from
UK government conversion factor guidance for the year reported.
In order to express our annual emissions in relation to a quantifiable
factor associated with our activities, we have used revenue as our
intensity ratio as this is a relevant indication of our growth and is
aligned with our business strategy.
Greenhouse gas (GHG) emissions Tonnes of CO2e
Emissions from:
Combustion of fuel and operation of facilities
Electricity, heat, steam and cooling purchased
for own use
Company’s chosen intensity measurement
tonnes of CO2e per £m revenue
Tonnes of CO2e
2019
29.38
2018
25.1
423.55
547.3
1.16
1.61
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Beyond Carbon Neutral
To ensure that we not only reduce our negative
impact but also have a long-lasting and positive
impact on the environment, under an initiative
proposed by our Green Teams, we will be mitigating
an additional 50% of our carbon footprint by
planting new trees in the UK via the Woodland Trust.
As well as providing us with a tangible view of our
impact (as we will know how many trees are planted
on our behalf, and can therefore calculate the
equivalent tonnage of CO2 they will absorb) this will
also provide an opportunity for some of our
employees to participate in tree-planting.
1 as outlined in The Companies (Directors’ Report) and Limited Liability Partnerships
(Energy and Carbon Report) Regulations 2018.
Moneysupermarket.com Group PLC Annual Report and Accounts 2019
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54Moneysupermarket.com Group PLC Annual Report and Accounts 2019Contributing to our communitiesBeing an active contributor to our chosen charities and the communities in which we operate is a core part of our ethosSustainability and Stakeholder Engagement continued Strategic reportWe are proud to have supported diverse causes with our fundraising and volunteering initiatives. In addition to a full programme of fundraising activities, we encourage all employees to work with the charities and communities that they support or to help those in need by using paid volunteering time. Prince’s Trust charity partnershipIn January 2019, we entered a three-year partnership with The Prince’s Trust, which helps young people aged 11 to 30 get into jobs, education and training. Over the year our employees raised almost £73,000 from fundraising activities including the Future Steps initiative, climbing Ben Nevis and four volcanos in Ecuador, taking part in the Royal Parks Half Marathon and Palace to Palace bike ride, as well as football and golf tournaments, sweepstakes, raffles and bake sales. The Group also donated just under £42,000 in matched donations, bringing the total donated to The Prince’s Trust during the year to £123,392 (including Gift Aid).Through the Group’s volunteering scheme, 62 employees volunteered their time with The Prince’s Trust, with activities spanning hosting young people at ‘World of Work’ days in our London and Manchester offices, and holding employability workshops and interview coaching at The Prince’s Trust ‘Get Hired’ days.Our first year of fundraising and volunteering has been recognised with a nomination at The Prince’s Trust 2019 Partnership Awards. PartnershipOur employees nominated The Prince's Trust to be our chosen charity partner for 2019 - 2021 Fundraising
Our team
completed the
Tough Mudder
challenge to raise
money for The
Prince's Trust
MSE charity
MoneySavingExpert continued to donate to The MSE Charity, which
gives grants of up to £7.5k to UK not-for-profit grassroots groups that
provide education, information and support to help people learn how
to manage their money better. In 2019 MoneySavingExpert donated
£60k to the charity which gave grants to 17 groups in two themed
grant-rounds: 'Raising the Next Generation' in April 2019, and the 'Life
Changing Transitions' in November. Further information is available at
www.msecharity.com.
Community
We work proactively to break gender stereotypes, inspire more young
women into tech and tackle the widening skills shortage through our
ongoing partnerships with Manchester Digital, Whalley Range girls’
school and Radclyffe School to raise awareness of the variety of roles
available.
Work experience and placements are offered to a number of
students. We strive to make work placements positive, challenging
and relevant to participants' current studies and future job prospects.
Community initiative
Launched in 2008, our .community initiative focuses on supporting
charities and community groups local to our offices in Ewloe,
Manchester and London.
In 2019, we sponsored a Skills Festival and an Ada Lovelace
experience day and also contributed to Code Nation’s ‘Creating
Employable Talent’ event in September, with employees sharing tips
to help guide junior developers through their career paths.
In 2019 we made £24,000 available for the .community initiative, with
funding channelled through the Charities Aid Foundation to allow the
Group to make gross donations to registered charities. Donations are
allocated to good causes by a volunteer group of employees, and
have helped fund items such as school sports kits, playground
fixtures, accessible equipment and much needed repairs. We helped
over 30 charities and community groups including:
• Penyffordd Mother and Toddler Group
Flintshire Foodbank
•
• Hawarden Cricket Club
• Chester Autism Practical Support
• North Wales Crusaders
• The Countess Charity/Memory Lane Project
• Saltney Ferry Scouts
• Broughton Pre-School Playgroup
• Dangerpoint
•
Friends of St Lukes
Careers
We work
proactively to
encourage more
young women to
go into careers in
tech
Moneysupermarket.com Group PLC Annual Report and Accounts 2019
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56Moneysupermarket.com Group PLC Annual Report and Accounts 2019Sustainability and Stakeholder Engagement continued Strategic reportSupporting all our customersHelping households save money includes understanding and serving the needs of diverse and vulnerable customers and usersAs part of our Group-wide agenda on diversity and inclusion, our Product team has been focusing on vulnerable customers to see how we can make our sites and apps more accessible to these individuals and how we can improve their experience. To do this, we have broadened the demographic that we use for our customer-experience testing to include: •Customers over 70; and •Visually impaired and blind people, in association with the Royal National Institute of Blind People (‘RNIB’), who have been instrumental in helping us to understand the challenges they face in accessing our services.To help us understand the needs of our older customers, we ran two customer-experience workshops with people over 70 who were interested in using price comparison sites. The goal was to understand their motivation for using price comparison tools and see how they interacted with our energy and home insurance sites and apps, when using a desktop PC, tablet and mobile phone. These sessions enabled us both to understand the usability of our technology for this group and to gain a greater insight into their needs.To understand customer experience of blind and visually impaired users, we worked closely with the RNIB to conduct two workshops in Peterborough and London. The objective was to learn more about the experience of our blind customers accessing the sites via screen reader software and that of visually impaired users who accessed our sites using screen magnification software. Following these sessions, we further engaged the RNIB to provide training sessions for our Product, Tech and Marketing teams to educate our employees about accessibility guidelines. These training sessions enabled our employees to gain first-hand experience of using accessibility apps and provided the opportunity for them to experience different eye conditions through the use of adapted glasses. By increasing awareness of the issues experienced by this section of our customer base, we can work towards incorporating these learnings from this research throughout the Group and across our trusted brands.We look forward to continuing our work in this area to ensure that our purpose of helping households save money is inclusive of a diverse group of under-served and vulnerable customers and users. We look to broaden our exploration into this area in 2020 to understand how we can improve the experience for customers with financial anxiety, mental health and depression, and those with reduced mobility, motor and dexterity skills. AccessibilityWe are working to ensure that our products are inclusive to under-served and vulnerable users. S
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58Moneysupermarket.com Group PLC Annual Report and Accounts 2019Sarah WarbyNED Employee ChampionSustainability and Stakeholder Engagement continued Strategic reportA few words from our NED Employee Champion Sarah WarbyA key role of the Board is to ensure that a healthy culture is in place to support the Group’s strategy and drive long-term, sustainable value for our shareholders We work with senior management to foster an inclusive, innovative culture, a workplace in which all colleagues can thrive, and an environment in which the views of our employees are taken into account in our decision-making processes.I had the privilege of being appointed the Group’s NED Employee Champion in September 2018. It has been a rewarding experience, and I have very much enjoyed getting to know our employees, understanding their perspectives and opinions. I have valued the support and collaboration of our Chief People Officer and our Diversity and Inclusion Lead - together we have introduced new and effective ways of engaging with our employees and bringing the employee voice to the boardroom.As outlined on page 42, the Group and the Board engage with employees in multiple ways on an on-going basis, and feedback from these channels is provided to the Board at every meeting as part of the Employee Voice Update rolling agenda item. Topics covered during the year included: the positive impact of our North West strategy and the new Manchester office; ways of working across teams; flexible working; the impact of the Reinvent strategy in different functions and teams; mental health; sustainability; pressure; and innovation. How are we making this happen?
• We have nine Employee Resource Groups ('ERGs') that meet
individually during the year to talk about a range of topics that
matter to them, from climate change (the Green Teams) to mental
health (Thrive). These groups are run by volunteers - colleagues
who feel strongly about the topic and supported by the HR
function, and in particular the Diversity & Inclusion Lead. The
groups have direct contact with me - twice a year on a formal
basis, and informally whenever relevant. The outcomes and key
actions resulting from those meetings are reported back to the
Board for review;
• Regular breakfast sessions at each office with non-executive
directors and employees from all levels of the business, with some
sessions comprising an informal open dialogue and others with
specific topics to stimulate discussion. Feedback on these
discussions is captured and discussed by the Board;
• Q&A sessions at each office providing employees with the
opportunity to hear from and ask questions of our NEDs;
• Bi-annual employee engagement survey, the results of which
are discussed with the Board by the Chief People Officer and
Executive management;
• Bi-annual presentations to the Board from the Chief People
Officer on key matters relating to people, including diversity, talent
and engagement;
Employee voice Journey wheel
• Monthly floor briefs from our CEO held simultaneously
screened across each office providing information on strategic
and performance of the business as well as people/culture
initiatives and local projects. These briefs are also video recorded
and uploaded onto the employee intranet for viewing at any time
– this offers an opportunity for all employees to ask questions and
to be kept informed about what’s happening around them;
‘Employee Voice Update’ is a rolling agenda item for every
Board meeting, ensuring that employee engagement remains a
key focus;
•
• Directors receive showcase presentations on current initiatives
being led by various colleagues in Ewloe and Manchester;
• A roadshow hosted by the CEO was held in December across all
three offices. This included breakout sessions with other members
of the executive team, providing an opportunity for employees to
interact with the executive team and understand more about our
strategic priorities; and
• Email updates to all staff from our CEO providing commentary
on trading results, announcements and recent performance.
The formal role of NED Employee Champion is in its first year, and I
am pleased to say that we are seeing results already. As we build our
contact time with colleagues from all over the Group, we are hearing
the employee voice more in our Board discussions. Not simply as an
agenda item, but also as a consideration in the business discussions
of the day. In future, we will also provide feedback to employees,
where appropriate, on steps taken to address their concerns or
explain why steps have not been taken.
Gather views and
experiences through
employee engagement
mechanisms
Communicate employee
feedback to the Board for
discussion and, where
appropriate action is
required, communicate to
senior management for
following through
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Provide feedback to
employees, where
appropriate, on steps
taken to address their
concerns or explain why
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Moneysupermarket.com Group PLC Annual Report and Accounts 2019
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Reporting requirementPolicies and ProceduresEnvironmental ´See pages 50 to 53 of report ´Environmental PolicyEmployees ´See pages 44 to 48 of report ´Code of conduct ´Equal Opportunities and Diversity Policy ´Flexible Working – ‘Work Your Way’ Policy ´Group Employee Handbook ´Health and Safety Policy StatementHuman Rights ´See pages 43 and 61 of report ´Anti-Slavery and Human Trafficking Policy ´Code of ConductSocial Matters ´See pages 54 to 55 of report ´Anti-Slavery and Human Trafficking Policy ´Volunteering Guide (Time-Off Policy)Anti-Corruption and Bribery ´See page 61 of report ´Anti-Bribery Policy ´Competition Law Policy ´Conflicts of Interest Policy ´Hospitality and Gifts Policy ´How to Buy GuidelinesPrincipal Risks and impact on the Business ´See pages 38 to 39 of reportDescription of Business Model ´See pages 14 to 15 of report60Moneysupermarket.com Group PLC Annual Report and Accounts 2019Sustainability and Stakeholder Engagement continued Strategic reportNon-Financial Information StatementWe comply with the Non-Financial Reporting requirements contained in sections 414CA and 414CB of the Companies Act 2006. The below table outlines our position on non-financial matters and provides signposts to where these issues are addressed in the report People
At Moneysupermarket Group, we understand that our behaviour,
operations and how we treat our employees all have an impact on the
environment and society. We recognise the importance of health and
safety and the positive benefits to the Group. The Group has a health
and safety policy which is communicated to all employees through a
health and safety handbook, which is regularly reviewed and updated.
Behaving ethically is an essential part of working for our Group,
fundamental to how we do business and vitally important to the
reputation and success of our Group. Our Code of Conduct applies
to all employees and sets out our commitment to:
• behave ethically;
•
• do the right thing.
comply with relevant laws and regulations; and
Human Rights
Our Code of Conduct also confirms that we respect and uphold
internationally proclaimed human rights principles as specified in the
International Labour Organisation’s Declaration on Fundamental
Principles and Rights at Work (‘ILO Convention’) and the United Nations’
Universal Declaration of Human Rights. In addition we have an
Anti-Slavery and Human Trafficking Policy for suppliers and a separate
one for employees. Training is provided to all employees on issues of
modern slavery in conjunction with the Code of Conduct e-learning
module. We have a zero-tolerance approach to modern slavery, are
committed to acting ethically and with integrity in all our business
dealings and relationships, and to implementing and enforcing effective
systems and controls to ensure modern slavery is not taking place
anywhere in our own business or in any of our supply chains. We
publish our Modern Slavery Act Transparency Statement annually and
this, together with previous statements, can be viewed on our website
at http://corporate.moneysupermarket.com.
Anti-Corruption and Anti-Bribery
We also have Anti-Bribery and Corruption, Competition law and
Whistleblowing Policies that incorporate the Group’s key principles
and standards, governing business conduct towards our key
stakeholder groups.
We believe we should treat all of these groups with honesty and integrity.
Our Anti-Bribery Policy is supported by clear guidelines and processes
for giving and accepting gifts and hospitality from third parties.
Whistleblowing
Our Whistleblowing Policy is supported by an external, confidential
reporting hotline which enables employees of the Group to raise
concerns in confidence. Any reported issues will be reported to the
Audit Committee and, where appropriate, remedial actions taken.
Tax Policy
Our Group is guided by our purpose to help households save money.
We believe that our business makes a valuable contribution to UK
society and we are proud to have helped 13.1m active users to save
an estimated £2.0bn on their households bills in 2019, by finding a
better deal on their energy, insurance and banking products.
Alongside this, we want to make our contributions to the
communities that our customers live in by paying the right amount of
tax, at the right time. In 2019, we paid £22.1m in corporation tax and
over £37m in other taxes (including VAT and employer’s national
insurance). We are committed to acting with integrity and
transparency in all tax matters. We will not support proposals to
reduce our tax cost through implementing artificial structures but we
will seek to structure commercial transactions in an efficient and
legitimate way. A copy of our tax strategy is available at
http://corporate.moneysupermarket.com.
Dividend Policy
In determining the level of dividend in any year in accordance with
the policy, the Board also considers a number of other factors that
influence the proposed dividend through its annual and strategic
planning processes and the scenario-planning described below in our
viability review section, which includes: the level of available
distributable reserves in the parent company; future cash
commitments and investment needs to sustain the long-term growth
prospects of the business; potential strategic opportunities; a
prudent buffer and the level of dividend cover.
Moneysupermarket.com Group PLC, the parent company of the
Group, is a non-trading investment holding company, which derives
its distributable reserves from dividends paid by subsidiary
companies. The Board reviews the level of distributable reserves in
the parent company bi-annually, to align with the proposed interim
and final dividend payments. The distributable reserves of the parent
company approximate to the balance on the profit and loss account
reserve, which at 31 December 2019 amounted to £103.1m (2018:
£203.9m) (as disclosed in the Company balance sheet on page 150).
The total external dividends relating to the year ended 31 December
2019 amount to £62.9m (2018: £59.0m).
The Group is well positioned to continue to fund its dividend, which is
suitably covered by cash generated by the business. The distributable
reserves are sufficient to pay dividends for a number of years as,
when required, the parent company can receive dividends from its
subsidiaries to increase its distributable reserves. Details on the
Group’s continuing viability and going concern can be found on pages
33 to 34.
The ability of the Board to maintain future dividend policy will be
influenced by a number of the principal risks identified on pages 38
to 39 that could adversely impact the performance of the Group.
The Strategic Report was approved by the Board of Directors and
signed on its behalf by:
Mark Lewis
Chief Executive Officer
19 February 2020
Moneysupermarket.com Group PLC Annual Report and Accounts 2019
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62Moneysupermarket.com Group PLC Annual Report and Accounts 2019Chair’s Introduction to Governance Governance2019 highlights èappointment and induction of new Chair; èappointment and induction of new independent Non-Executive Director and Audit Committee Chair; èreceived training on the implementation of the Senior Managers & Certification Regime (‘SM&CR’), which came into effect in December 2019; èbrought the stakeholder voice into the boardroom and reviewed our stakeholder engagement mechanisms, including making ‘Employee Voice Update’ a standing Board agenda item; èreviewed climate change initiatives proposed by the Green Teams (Employee Resource Group) and agreed a plan for becoming carbon neutral by the end of 2020; èparticipated in multiple employee engagement sessions, including one in our new Manchester office; èconducted a comprehensive shareholder consultation on proposed changes to our Remuneration Policy, further details of which are set out in the Remuneration Report on page 85; and èprioritised the review of talent, succession and diversity, both at Board and senior management levels.Robin FreestoneChairImplementing effective stakeholder engagement is a key focus of the Board in ensuring the Group meets its responsibilities to stakeholders and wider societyAs I have said in my Chair Statement at the start of this Annual Report, I am delighted to be appointed as your new Chair. On behalf of the Board, I am pleased to present my first governance report for the year ended 31 December 2019. As a Board, we aim to maintain a governance structure which provides effective control and oversight of the Group, whilst at the same time promoting the entrepreneurial spirit which has been central to the Group’s success in helping households save money.Recent Governance ChangesThis is the first year that we are reporting our adoption of the provisions and principles of the 2018 UK Corporate Governance Code (the ‘2018 Code’). In our Corporate Governance Report on pages 66 to 72, we aim to provide a clear and meaningful explanation of how we as a Board lead the Group and discharge our governance duties. It also outlines the governance initiatives we have undertaken during the year. In reviewing our Board’s effectiveness, we have also taken into account the Financial Reporting Council’s 2018 Guidance on Board Effectiveness and applied its guidance where appropriate. Our statement of compliance with the 2018 Code is set out on the opposite page.The Board also reviewed its governance framework to ensure it remains fit for purpose and is compliant with the SM&CR which now applies to solo-regulated firms and was implemented across the Group in December 2019. Stakeholder Engagement
Implementing effective stakeholder engagement mechanisms is
a key focus of the Board in ensuring the Group meets its
responsibilities to stakeholders and wider society. This is an area
where we have already made good progress and have strong
foundations on which to build. Further details on what we have
been doing to engage with our stakeholders can be found in our
Strategic Report on pages 42 and 43.
Board composition and operation
We continue to operate a clear line of distinction between
management, led by the CEO, who is responsible for the day to
day running of the business, and the Board, acting under my
leadership. The Board provides constructive challenge to
management, an open culture and active debate, focused on
creating and preserving value for our stakeholders.
As described in my Chair Statement on page 6, there have been
some changes to the Board’s composition during the year, with
the appointments of Scilla Grimble as CFO and
Caroline Britton as Non-Executive Director and Audit Chair.
Genevieve Shore stepped down from the Board in July 2019, and
we announced in November 2019 that Andrew Fisher would step
down from the Board at the Company’s AGM in May 2020.
The Board has initiated a formal search process for his
replacement which includes internal and external candidates. In
the meantime, Mark remains in role and fully engaged with the
business.
I am pleased to welcome Surpriya Uchil and James Bilefield who
will be joining the Board later this year. They will be valuable
additions and complement the diverse backgrounds and
experience of our Board.
During 2020, the Board will continue to engage with its
stakeholders and operate in a constructive and open manner,
with honesty and integrity as its core principles.
Robin Freestone
Chair
19 February 2020
In February, the Company announced that Mark Lewis had
indicated his intention to stand down from the Board. No date
has been agreed and Mark indicated he wished to ensure a
smooth transition to his successor.
Male
Female
Board tenure as at 19 February 2020
Sally James
Andrew Fisher
Robin Freestone
Mark Lewis
Scilla Grimble
Sarah Warby
Caroline Britton
5-6 years
4-5 years
3-4 years
2-3 years
1-2 years
1-2 years
<1 year
Board gender and role composition as at
19 February 2020:
Gender
Role
43%
57%
14.3%
28.6%
57.1%
Chair
Executive Directors
Non-Executive Directors
Compliance with the 2018 Code
The primary responsibility of the Board in complying with the
2018 Code is to provide effective, entrepreneurial leadership to
ensure that it promotes the long-term success of the Company
for the benefit of its members as a whole.
The Company applied the principles and complied with the
relevant provisions set out in the 2018 Code throughout the
period under review, except for the items referenced on pages
66, 69 and 96. Details demonstrating how the principles and
relevant provisions of the 2018 Code have been applied can be
found throughout the Corporate Governance report, the
Directors’ report, each of the Board Committee reports and the
Strategic report.
The Financial Reporting Council (FRC) is responsible for the
publication and periodic review of the UK Corporate Governance
Code, and this can be found on the FRC website www.frc.org.uk.
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64Moneysupermarket.com Group PLC Annual Report and Accounts 2019Board of Directors GovernanceBoard skills matrix:Caroline BrittonAndrew FisherRobin FreestoneScilla GrimbleSally JamesMark LewisSarah WarbyBanking/Insurance Industry ExperienceDigital/Customer Experience (Front Office)Finance and AccountingInternational ExperienceGovernanceRisk and RegulationTechnology (Back Office)MarketingStrategyTerm of Office: Robin was appointed to the Board as a Non-Executive Director in August 2015 and became Chair of the Board in May 2019.Independent: Yes.Skills and Experience: Robin has transformation and diversification experience within leading global and digital businesses. He was Chief Financial Officer of Pearson PLC from 2006 to 2015, and Deputy Chief Financial Officer prior to that. Robin has also held a number of senior financial positions at Amersham plc (2000 to 2004), Henkel Ltd (1995 to 2000) and ICI plc (1984 to 1995).External Appointments: Robin is the Senior Independent Non-Executive Director and Chair of the Audit Committee of Smith & Nephew PLC and a Non-Executive Director and Chair of the Audit Committee of Capri Holdings Limited (formerly Michael Kors Holdings Limited). He sits on the advisory board to the ICAEW’s Financial Reporting Committee and also chairs the ICAEW’s Corporate Governance Committee.Robin FreestoneChair of the Board and Chair of the Nomination CommitteeMark LewisChief Executive OfficerScilla GrimbleChief Financial OfficerTerm of Office: Mark was appointed to the Board in March 2017 and became Chief Executive Officer in April 2017.Independent: Not applicable.Skills and Experience: Mark has experience in consumer marketing, online marketplaces and retail. He was previously Retail Director, and prior to that Online Director, at John Lewis. Mark has previously held senior commercial and management roles at Collect+ and eBay UK including Chief Executive Officer and Managing Director. Mark has an MBA (INSEAD) and an MA, BA (Hons) from Cambridge University in Mathematics.External Appointments: None.Term of Office: Scilla was appointed to the Board as Chief Financial Officer in February 2019. Independent: Not applicable.Skills and Experience: Scilla has a strong financial background and extensive consumer experience. She was formerly Director of Group Finance and Interim Chief Financial Officer at Marks and Spencer Group Plc (2016 to 2018). Scilla previously held senior finance roles at Tesco PLC and was a managing director at UBS Investment Bank. Scilla is a qualified chartered accountant, having trained and qualified with PwC.External Appointments: None.N 65Moneysupermarket.com Group PLC Annual Report and Accounts 2019Financial StatementsStrategic ReportGovernanceSally JamesSenior Independent Non-Executive Director and Chair of the Risk CommitteeSarah WarbyNon-Executive Director and Non-Executive Director Employee ChampionKatherine BellauCompany Secretary and General CounselAndrew FisherIndependent Non-Executive Director and Chair of the Remuneration CommitteeCaroline BrittonIndependent Non-Executive Director and Chair of the Audit CommitteeTerm of Office: Sally was appointed to the Board as a Non-Executive Director in April 2013 and became Senior Independent Director in May 2017.Independent: Yes.Skills and Experience: Sally has experience in the financial services sector having been a Non-Executive Director of UBS Limited (2009 to 2015) and before that she held a number of senior legal roles in investment banks in London and Chicago, including Managing Director and EMEA General Counsel at UBS Investment Bank from 2001 to 2008.External Appointments: Sally is a Non-Executive Director of Rotork PLC where she is Senior Independent Director, a Non-Executive Director of Hermes Fund Managers Limited and a Non-Executive Director of Bank of America Merrill Lynch International D.A.C.Term of Office: Appointed to the Board as a Non-Executive Director in June 2018.Independent: Yes.Skills and Experience: Sarah has experience of building valuable brands across consumer sectors. She is currently Chief Executive Officer of Lovehoney and was previously Chief Growth Officer of HyperJar Ltd. Prior to that, Sarah was Chief Marketing Officer at J Sainsbury plc and Marketing Director of Heineken UK. She is a fellow of the Marketing Society and Marketing Academy and an advisor to the Museum of Brands.External Appointments: Sarah is Chief Executive Officer of Lovehoney Ltd.Term of Office: Andrew was appointed to the Board as a Non-Executive Director in August 2014. Independent: Yes.Skills and Experience: Andrew has extensive experience of building digital, media and entrepreneurial businesses. He was previously Executive Chairman, and prior to that Chief Executive Officer, of Shazam Entertainment Limited. Prior to that, Andrew was European Managing Director of Infospace Inc and Founder and Managing Director of TDLI.com. Andrew was also previously a non-executive director of Merlin Entertainments plc prior to its de-listing in 2019.External Appointments: Andrew is Chair of the Board of Rightmove plc and a Non-Executive Director of Marks and Spencer Group PLC.Term of Office: Caroline was appointed to the Board as a Non-Executive Director in September 2019.Independent: Yes.Skills and Experience: Caroline has a strong financial background, recently retiring as audit partner at Deloitte LLP after 30 years of service (2000 to 2018 as audit partner). Caroline is an FCA of the Institute of Chartered Accountants in England and Wales and holds an MA in Economics from Cambridge University. Caroline is a member of the Audit, Finance and Investment Committee for Make-A-Wish Foundation International.External Appointments: Caroline is a Non-Executive Director and Chair of the Audit Committee of Revolut Ltd.Term of Office: Katherine was appointed Company Secretary and General Counsel on 8 February 2019.Skills and Experience: Katherine was appointed General Counsel and Company Secretary in February 2019. She joined the Group in 2012 after overseeing the sale of MoneySavingExpert to the Group. Katherine’s expertise covers legal, regulatory and governance issues and their impact on digital businesses. Previously, Katherine practised at international law firm DLA Piper and lectured at The University of Law. She holds a Post-Graduate Diploma in Commercial Intellectual Property Law.External Appointments: None.Committee Membership/AttendanceAAudit CommitteeNNomination CommitteeRiRisk CommitteeReRemuneration CommitteeDenotes ChairmanAAANNNRiRiRiRiReReReRe 66Moneysupermarket.com Group PLC Annual Report and Accounts 2019 GovernanceGovernance frameworkMoneysupermarket.com Group PLC BoardAudit CommitteeRisk CommitteeRemuneration CommitteeNomination CommitteeLeadershipThis section looks at the roles and responsibilities of our Board members.The role of the BoardThe Board is responsible for the long-term sustainable success of the Group, with the overall aim of delivering shareholder value. Principally, we achieve this through: •setting and monitoring strategy and ensuring the necessary resources are in place; •providing entrepreneurial leadership within an effective risk management framework; and •reviewing management’s performance.In setting and monitoring strategy, we are mindful of the impact that those decisions will have on the Group’s obligations to various stakeholders, including shareholders, employees, customers, regulators and the wider community.While the Board is not managing the day-to-day operations of the Group, key decisions and matters which are reserved for approval of the Board are fully documented and regularly reviewed. These include the setting of, and changes to, Group strategy, approval of major acquisitions or disposals, determination of interim dividends and recommendation of final dividends, approval of budget and financial results, as well as carrying out an annual review of the effectiveness of risk management and internal control systems.The Board reviews the matters reserved for the Board annually. The current matters reserved are available on our website at http://corporate.moneysupermarket.com.The Board currently comprises the Chair, four Independent Non-Executive Directors and two Executive Directors.Scilla Grimble was appointed as CFO on 4 February 2019 and Caroline Britton joined the Board as an Independent Non-Executive Director and Chair of the Audit Committee on 20 September 2019. The division of the roles and responsibilities of Chair and CEO has been set out in writing, providing clarity on the distinct responsibilities of each role. The roles have been revised and approved by the Board to align them with the 2018 UK Corporate Governance Code. Responsibilities of Board members are set out opposite.ChairThe Chair is responsible for: •leading the Board and ensuring its effectiveness in all aspects of its role; •promoting the highest standards of corporate governance; •facilitating effective contribution of Non-Executive Directors and encouraging active engagement by all Directors, with the appropriate level of challenge by all Directors; •ensuring the Board receives accurate, timely and clear information and is consulted on all matters important to it; •ensuring the Board considers the interests of stakeholders and reviews mechanisms for engagement with stakeholders; and •ensuring the Company maintains effective communication with shareholders and communicating their views to the Board.Chief Executive OfficerThe CEO is responsible for: –leading the performance and management of the Group; –proposing strategies, business plans and policies to the Board; –ensuring effective implementation of the Board’s decisions; –maintaining an effective framework of internal controls and risk management; and –leading, motivating and monitoring performance of the Company’s executive management, and focusing on succession planning for the executive management.Non-Executive DirectorsEach Non-Executive Director is responsible for: –bringing experience and independent judgement to the Board; and –constructively challenging the Executive Directors and senior management team and helping develop proposals on strategy.Senior Independent DirectorThe Senior Independent Director is an Independent Non-Executive Director who is responsible for: –meeting with the Company’s shareholders and representative bodies when requested and, if necessary, discussing matters with them where it would be inappropriate for those discussions to take place with either the Chair or the CEO; and –acting as a sounding board for the Chair and as an intermediary for the other Directors when necessary.Corporate Governance Report Non-Executive Director Employee Champion
The Non-Executive Director Employee Champion is an Independent
Non-Executive Director who is responsible for:
• helping the Board to establish what channels of engagement are
appropriate, in order to gather and bring the views and
experiences of the workforce into the boardroom;
• working with the Board to take appropriate steps to evaluate, and
where possible mitigate, the impact that the Board’s proposals
and decisions may have on the workforce;
challenging the executive directors, when required, as to the way
in which workforce engagement is undertaken and the steps to be
taken to address workforce concerns arising out of business-as-
usual activities; and
•
• giving feedback to employees, where appropriate, on steps taken
to address their concerns or explain why particular steps have not
been taken.
Sarah Warby is our Non-Executive Director Employee Champion.
The Company Secretary
The Company Secretary is responsible for:
• managing the provision of timely, accurate and considered
•
information to the Board;
recommending corporate governance policies and practices to the
Chair and CEO;
• assisting the Chair and Senior Independent Director with the
•
annual board evaluation process;
implementing and communicating corporate governance policies
across the Group; and
• advising the Board and its Committees on corporate governance
and compliance within the Group and appropriate procedures for
the management of their meetings and duties.
The appointment and removal of the Company Secretary is a matter
for the whole Board. All Directors are able to consult with the
Company Secretary whenever appropriate. There is also a formal
documented procedure by which any Director may take independent
professional advice relating to the performance of any aspects of
their duties at the Company’s expense, which can be facilitated by the
Company Secretary. Katherine Bellau is our Company Secretary.
Number of Board meetings:
9
Allocation of time
Board meetings
The Chair sets the Board agendas following consultation with the CEO
and with the assistance of the Company Secretary. Non-Executive
Directors are encouraged to submit agenda items for discussion and
periodically review how we allocate our time at Board meetings (see
the chart below).
In 2019, we held nine Board meetings. The Board was focused on
monitoring progress against the strategic priorities agreed for the
second year of our Reinvent growth strategy, which included holding
‘deep dives’ at each meeting to cover specific strategic priorities. A
summary of the Board’s principal areas of focus in 2019 are listed in
the Board Activities section on page 68.
Additionally, the Non-Executive Directors meet regularly without the
Executive Directors present and at least once annually without the
Chair present.
The Board splits its meetings between the Group’s Ewloe, London
and Manchester offices. Employees have the opportunity to meet and
interact with Board members at various times during the year. More
information on the Board’s engagement with employees is noted on
pages 42 and 72.
The Chair ensures that all Directors remain in touch with and
understand the issues being faced by our customers and how our
employees deal with those issues. We arrange for the Directors to
listen to employee calls with customers to provide insight into how
our employees remedy customers’ concerns.
2019 Board attendance
Board members
Robin Freestone
Sally James
Mark Lewis
Scilla Grimble (1)
Andrew Fisher
Genevieve Shore(2)
Sarah Warby
Caroline Britton(3)
Bruce Carnegie-Brown(4)
Meetings
Attended
9/9
9/9
9/9
8/8
9/9
5/6
9/9
2/2
3/3
Business and CEO updates 35%
Strategy 35%
Finance and investor relations 10%
People/talent/culture 8%
Governance (including stakeholder engagement planning),
risk and annual report 11%
Miscellaneous 1%
(1) Scilla Grimble was appointed as CFO on 4 February 2019.
(2) Genevieve Shore resigned as Director on 31 July 2019.
(3) Caroline Britton was appointed a Non-Executive Director on 20 September 2019.
(4) Bruce Carnegie-Brown stepped down as Director and Chair on 7 May 2019.
Ad hoc conference calls and Committee meetings were also
convened to deal with specific matters which required attention
between scheduled meetings.
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Governance
Corporate Governance Report continued
2019 Board Activities
Strategy
• undertook a review of the Reinvent strategy at a number of
meetings attended by the Board and senior management,
including a two-day off-site strategy meeting at which we:
— tested and reviewed the progress of the Reinvent strategy
and strategic priorities including optimisation, marketing,
personalisation, data, customers, and corporate
development;
— approved the Investment Policy;
— reviewed the markets in which we operate; and
— reviewed the regulatory and risk environment in which we
operate, with a focus on price comparison websites;
•
•
reviewed the Group’s plans against the Board’s risk appetite to
ensure that our ambitions for the business are aligned with our
ability to manage risk;
reviewed various business development and investment
opportunities; and
• held ‘deep-dives’ at our Board meetings into various aspects of
the business including cyber security, SM&CR and our strategic
priorities.
Governance and Risk Management
•
reviewed and revised our annual programme of business for
the Board and each of the Committees, tailoring the deep dives
to reflect our strategic priorities;
• progressed the actions from the 2018 external Board
evaluation process and conducted an internal Board evaluation
process, details of which are on page 69;
reviewed our governance framework to ensure it remains fit for
purpose and is compliant with SM&CR;
considered whistleblowing processes throughout the Group
and received a whistleblowing update;
•
•
• oversaw the implementation of upgrades to our cyber and data
•
•
•
security capabilities;
reviewed our application and compliance of the 2018 Code
including receiving a stakeholder engagement update and
reviewing our wider engagement mechanisms;
considered, discussed and revised the Principal Risks and
uncertainties, identifying emerging risks which could impact the
Group; and
reviewed the effectiveness of our internal control and risk
management processes.
Effectiveness
The composition of our Board has been an areas of focus this year
for the Nomination Committee to ensure that it retains the necessary
balance of skills, knowledge, experience, gender and diversity to meet
the needs of the business and of our stakeholders. Our current
board composition continues to be appropriate to the Group’s
requirements with the right diversity of experience and technical
expertise to support the strategic and operational direction of the
Group. Details of the skills and experience of individual Directors are
set out on pages 64 to 65. Further information on the Nomination
Committee is on pages 79 to 81.
Leadership and employees
•
reappointed Sarah Warby as our NED Employee Champion and
approved an enhanced programme of engagement activities
with employees;
• added ‘Employee Voice Update’ as a standing board agenda
•
item for every meeting; and
received updates on the Group’s people and culture,
organisational structure, diversity, talent management and
employee engagement including reviewing results of employee
surveys and feedback from the various employee focus groups
(diversity and inclusion, mental health awareness and
environmental matters).
Finance and Investor Relations
• approved the annual budget and financing strategy;
• approved audited financial statements for the year ended
•
•
31 December 2018;
received reports and updates at each meeting on investor
relations activities including analyst consensus, feedback from
major shareholders and investor roadshows;
reviewed capital allocation options including approving the
interim dividend and enhanced distribution to shareholders
and recommending the final dividend to shareholders;
• approved the Group’s Supplier Payment Policy; and
received updates on the finance data programme.
•
Business Performance
•
reviewed the strategic and operational performance of each of
our businesses;
reviewed market and trading updates and considered Group
financial performance against budget and forecast; and
• agreed Group OKRs and KPIs for 2019 onwards which are
•
aligned with the Group’s strategic priorities.
External Appointments
During the year, Sarah Warby was appointed as CEO to Lovehoney.
This appointment was notified to the Chair and approval sought prior
to her acceptance of the role. In accordance with the 2018 Code, the
Board has updated its process so that full Board approval is sought
prior to a Director accepting an external appointment. Prior to the
approval of any external appointments, the Board considers the time
commitment required by Directors to perform their duties effectively.
Board Committees
The membership and leadership of the Board Committees were
reviewed during 2019 to ensure the Committees continue to operate
effectively and have the skills required to support the increasing
complexity of the Group. The current membership of each of the
Committees is set out in each of the Committee reports on pages 74,
79, 83 and 86. Sally James, Chair of the Risk Committee, is also a
member of each of the Committees to ensure that risk is
appropriately considered in each Committee.
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Moneysupermarket.com Group PLC Annual Report and Accounts 2019
We delegate certain Board responsibilities to our Board Committees
which play an important governance role through the work they carry
out. Briefing papers are prepared and circulated to the Committee
members in advance of each meeting. The Committee Chairs report
formally to the Board on Committee activities at the subsequent
Board meeting.
The Committees may obtain external professional advice at the
Company’s expense if deemed necessary.
Robin Freestone was Chair of the Audit Committee from January to
September 2019, 4 months of which overlapped with his appointment
as Chair of the Board from May 2019. In its director search, the
Nomination Committee prioritised candidates with significant financial
experience to succeed Robin as Audit Committee Chair. This enabled
continuity and ensured that the Audit Committee continued to carry out
its role effectively while the search for a new Audit Chair was undertaken.
Caroline Britton subsequently succeeded Robin as Chair of the Audit
Committee in September 2019.
Induction of a new Director
On appointment, each Director receives a tailored induction to suit
the individual’s background and experience. During 2019, Scilla
Grimble and Caroline Britton joined the board as CFO and Non-
Executive Director respectively. Their inductions are summarised below:
• granted access to an electronic resource handbook which includes
information on the Group’s structure and strategy;
• held one-to-one meetings with senior executives to understand
the roles played by our senior management team;
• met with our auditors, KPMG LLP, to ensure a smooth transition
•
as incoming Audit Committee Chair;
received tailored director training on listed company requirements
with our corporate lawyers, Herbert Smith Freehills, and
remuneration reporting with Deloitte LLP;
• provided visibility of results of 2019 Board and Committee
•
evaluation feedback to provide insight into the Board’s and the
Audit Committee’s effectiveness;
visited our Ewloe and Manchester offices which included meeting
various senior management individuals and attending an
employee engagement session; and
• designated support from our governance team to ensure a
smooth transition to the Board.
Training and information
Directors are continually updated on the Group’s business, the
markets in which we operate and changes to the competitive and
regulatory environments through presentations and briefings to the
Board from Executive Directors and senior management.
As part of the annual individual performance evaluation, the Chair
discusses training and development requirements with each Director
so that any needs which are identified through the formal evaluation
or during the year can be addressed. The Company Secretary also
maintains a record of individual Director’s training.
Directors received briefings from the Company Secretary during 2019
on governance and compliance matters and relevant legislative
changes. The Board also received training from Herbert Smith
Freehills LLP on the SM&CR which was implemented in December
2019. In addition, individual directors receive tailored training where
beneficial or required in order for them to adequately discharge their
duties. For example, Caroline Britton received remuneration
reporting and listed company training as part of her induction plan.
To ensure that Directors are able to fully acquaint themselves with
current trading and matters requiring discussions and decisions,
comprehensive Board papers and Committee papers are circulated
electronically approximately 1 week prior to scheduled meetings.
The Directors also have available to them an electronic ‘Resource
Centre’ acting as a board manual which includes extensive
information including financial and analyst reports, current and
historical regulatory publications, Group codes and policies,
organisational structure documentation, and information on
directors’ duties.
Directors, may, in the furtherance of their duties, take independent
professional advice at the Company’s expense.
Independence of Non-Executive Directors
The Board considers that the Chair and all of the Non-Executive
Directors to be independent in character and judgement and free
from relationships or circumstances which are likely to affect, or could
appear to affect, their judgement.
Conflicts of interest
As permitted by the Companies Act 2006, the Company’s articles of
association enable Directors to authorise potential conflicts of
interest. The Company has a formal procedure for notification and
authorisation to be sought, prior to the appointment of any new
Director or prior to a new conflict arising. This procedure enables
non-conflicted Directors to impose limits or conditions when giving or
reviewing authorisation. It also requires the Board to review the
register of Directors’ conflicts annually and on an ad hoc basis when
necessary. The Board has complied with this procedure during
the year.
Ethics and governance
There is a strong relationship between ethics and good governance.
We remain committed to operating ethically, demonstrating integrity
and acting responsibly in our undertakings with our customers, our
shareholders and our wider stakeholders. Our Code of Conduct
incorporates additional guidance for employees and each employee
completes an e-learning module on the Code of Conduct. Further
information on our ethics and social responsibility is contained in the
Sustainability and Stakeholder Engagement Report on pages 40 to 59.
Performance evaluation
Board evaluation
An external evaluation is carried out every three years. The last
external evaluation was held in 2017, therefore the next external
evaluation will be conducted in 2020.
During 2019, the Board conducted an internal evaluation of its
performance, and of the performance of the Committees and
individual directors, taking into account the principles and provisions
of the 2018 Code. The evaluation process involved the completion of
questionnaires by individual directors and one-to-one interviews held
by the Chair and the Senior Independent Director. The results were
then analysed and presented for discussion at a Board meeting which
resulted in the Board agreeing the following key actions:
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Governance
Corporate Governance Report continued
2019 evaluation actions
The Directors’ many positive responses indicated their widely held
view that ongoing improvements have been made since the previous
evaluation in 2018. In particular, members considered there was
open and transparent debate with constructive challenge and active
engagement from all members of the Board. The Board receives
comprehensive reports to enable it to monitor performance, consider
risks and controls, and take key decisions. Some of the areas that will
be actioned in 2020 are a continuing focus on:
• Strategy: implementation of delivery at pace;
• Succession planning: increase pipeline of talent within the Group,
continued focus on employee engagement; and
• Stakeholder voice: continued improvement of engagement with
customers and providers.
Progress against 2018 evaluation actions
The Board also reviewed its progress against actions identified in the
internal 2018 Board evaluation. An update on progress against these
actions during 2019 is set out below:
2018 Board Evaluation
Action Item
Our Progress
Strategy
– ensuring the strategic
implementation plan is
updated and regularly
reviewed
Group culture
– assessing and
monitoring culture
Stakeholder voice
– ensuring the
stakeholder voice is
actively and regularly
considered by the
Board
• A plan for monitoring the Group’s
strategy implementation in 2020 was
agreed by the Board;
• Strategic plan items are included in the
Board’s rolling agenda;
• A two-day strategy session with the
Board and executive team was held in
October 2019.
• The Board receives bi-annual updates
from the Chief People Officer on people,
culture, diversity, talent and
engagement;
‘Employee Voice Update’ has been
added as a standing Board agenda item;
•
• NED Employee Champion Sarah Warby
has renewed her appointment for a
further 12 months until September 2020.
• CEO presented a stakeholder voice
update to the Board in November 2019;
• Stakeholder voice is a standing annual
Board agenda item;
• Employee voice is discussed at every
Board meeting;
• New agenda items on charities/
communities, environmental initiatives,
suppliers and providers have been
added to the Board’s annual
programme of activities;
• Additional engagement sought with
shareholders and regulators.
Individual Director Evaluations
In 2019, each of the Directors was appraised individually in the
form of an interview with the Chair, taking into account feedback
received as part of the Board evaluation process. Following these
interviews, the Chair has confirmed that each Director continues to
make a valuable contribution to the Board and devotes sufficient time
to their role.
The Chair’s evaluation is undertaken by the Senior Independent
Director, taking into account the views of the other Directors.
Biographies of the Board are set out on pages 64 and 65 which
includes any other significant commitments. The Board is satisfied
that these other commitments do not conflict with the Chair’s or any
Director’s ability to effectively carry out their duties and
responsibilities for the Group.
Committee evaluation
We conducted formal evaluations of each of the Committees. This
involved the completion of questionnaires by members of each
Committee. The results were analysed and discussed by the relevant
Committee. Summaries of the actions arising from these evaluations
and progress on actions identified in 2018 can be found in the
relevant Committee reports.
Accountability
Financial and business reporting
The Board’s aim is to present an Annual Report to shareholders,
which, taken as a whole, is a fair, balanced and understandable
assessment of the Group’s position and performance, business
model and strategy. The Board has ensured that processes are in
place to achieve this and more information on the processes can be
found in the Audit Committee Report on pages 73 to 78. A statement
of Directors’ responsibilities and the auditor’s responsibilities in
relation to the Annual Report are set out on pages 108 to 115. The
Directors’ opinion that the Company’s business is a going concern is
set out on page 34.
Risk management and internal control
The Board has overall responsibility for setting the risk appetite of the
Group, maintaining the Group’s risk management and internal control
system and reviewing the system’s effectiveness. We have an ongoing
process for identifying, evaluating and managing the Principal Risks faced
by the Group which has been in place for the year under review and up
to the date of approval of the Annual Report. The Risk Committee and
the Audit Committee assist us in discharging these duties.
A description of the process for managing risk together with a
description of the Principal Risks and strategies to mitigate those
risks, is provided on pages 35 to 39.
The main features of the Group’s risk management and internal
controls in respect of financial reporting and the preparation of
accounts are:
• a comprehensive annual business planning and budgeting
process, requiring Board approval, through which risks are
identified and appraised;
• a comprehensive financial reporting system, regularly enhanced,
within which actual and forecast results are compared with
approved budgets and the previous year’s figures on a monthly
basis and reviewed by the Board;
• a review of Group policies relating to the maintenance of accounting
records, transaction reporting and key financial control procedures;
• an investment evaluation procedure to ensure an appropriate
level of approval for all capital expenditure and other capitalised
costs;
• monthly finance team meetings which include reviews of internal
financial reporting issues and financial control monitoring; and
• ongoing training and development of financial reporting
employees.
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Moneysupermarket.com Group PLC Annual Report and Accounts 2019
Other controls in place to manage our business in accordance with
our Risk Appetite Framework include:
• an annual two-day strategy meeting to discuss and approve the
Group’s strategic direction, plans and objectives and the
challenges to achieving them;
• a schedule of matters reserved for approval by the Board to
ensure it maintains control over appropriate strategic, financial,
organisational, compliance and capital investment issues;
• an organisational governance structure with clearly defined lines
•
•
of responsibility and delegation of authority;
formal risk and control policies and supporting procedures
manuals;
regular reviews of the Principal Risks facing the Group to ensure
they are being identified, evaluated and appropriately managed;
• a process for regular assessment of key controls across the
Group;
• a Risk & Compliance function responsible for overseeing the
implementation of the Risk Appetite Framework;
• an Internal Audit function providing assurance over key risks,
processes and controls; and
• a whistleblowing hotline which employees can use to report any
instances of suspected wrongdoing.
Our internal control effectiveness is assessed through the
performance of regular checks, which in 2019 included the following
areas:
•
•
• performing compliance monitoring activities including financial
reviewing and testing the Group’s financial reporting processes;
completion of the Group’s internal audit plan;
promotion reviews and call listening;
• assessment of the identification and management of risks
connected to the Group’s capital investment programme;
• assessment of the Group’s processes for identifying and mitigating
potential conflicts of interest;
• assessment of the identification and management of technology
risks across the Group, including cyber risk, data security and
change management; and
• monitoring the completion of the Group’s mandatory ‘Customer
First’, data protection, cyber security and Code of Conduct training
for new starters and refresher training for all employees.
Risk review and assessment
The Group’s systems and procedures are designed to identify and
manage and, where practicable, reduce and mitigate the risk of failing
to achieve the Group’s objectives. They are not designed to eliminate
such risk, but the Group seeks to understand its Principal Risks and
manage them within our risk appetite.
The Group’s risk register is a key element in our risk management
framework and is used in the assessment and reporting of risks being
managed by the Group. Senior management continue to work
alongside the Risk & Compliance function to ensure the risk register
incorporates any new risks and movements in risks. The risk register
is managed by the Risk and Compliance function and is reviewed on a
regular basis by the Risk Committee. Each risk is owned by a member
of the executive management team who is responsible for the
ongoing assessment of risk and the delivery of mitigating actions.
Robust risk and control assessments are carried out at least quarterly
across all areas of the business, in order to understand the strength
and performance of the controls in place, and potential gaps and
weaknesses. Internal Audit and Risk and Compliance monitoring
findings are also taken into account when assessing risks.
The Risk and Compliance function provides challenge to management
in their assessment and management of risks with particular focus on
the actions being taken to reduce risk. The executive management
team meets on a monthly basis to ensure risk management is
integrated within strategic and business planning processes.
Reporting to the Risk Committee enables the Directors to have clear
visibility of the most serious risks; identify areas of concern and/or
priority; have access to detailed information to enable root cause
analysis and identification of underlying trends; and identify, escalate,
and potentially mitigate the impact of new risks in a timely manner.
Twice a year the Board reviews the Group’s Principal Risks and the
Group Risk Appetite Framework and Statement. During these reviews
it also takes account of the significance of any environmental, social
and governance matters to the business of the Group, ensuring any
related risks and associated mitigation have been identified.
Process for review of effectiveness
The Audit Committee is responsible for reviewing the effectiveness of
the risk management and internal control systems. The steps it takes
in relation to the review are set out on pages 36 and 77. The Audit
Committee makes a recommendation to the Board on effectiveness,
which the Board considers, together with reports from the Risk
Committee, in forming its own view on the effectiveness of the risk
management and internal control systems.
We regularly review and update our internal control and risk
management processes. During 2019, the Board reviewed the
effectiveness of the Group’s risk management and internal control
systems. We confirm that the processes outlined above and on pages
35 to 37 and 77 have been in place for the year under review and up
to the date of approval of this Annual Report, and that these
processes accord with the 2018 Corporate Governance Code and the
FRC Guidance on Risk Management, Internal Control and Related
Financial and Business Reporting (September 2016 version). We have
strengthened and expect to continue to embed enhanced controls in
respect of cyber security, data privacy and third party management. A
summary of actions we have taken in 2019 is set out in the Risk
Committee Report on pages 82 to 84.
The Board has carried out a robust assessment of the Principal Risks
facing the Group, including those that would threaten its business
model, future performance, solvency or liquidity and these, together
with how they are managed or mitigated, are set out on pages 38 to
39.
Stakeholder engagement
The Board actively seeks and encourages engagement with all
stakeholders, including employees, charities/communities, suppliers,
providers, regulators, the Government and the environment. Further
information on how the Group engages with its stakeholders can be
founds on pages 42 to 43.
Major shareholders
The Board actively seeks and encourages engagement with major
institutional shareholders and other stakeholders. The CEO and CFO
regularly meet with analysts and institutional shareholders to keep
them informed of significant developments and to develop an
understanding of their views which are then discussed with the
Board. In addition, the Investor Relations Director is in regular contact
with investors and analysts.
Moneysupermarket.com Group PLC Annual Report and Accounts 2019
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Corporate Governance Report continued
Formal presentations are given to analysts and shareholders covering
the full-year and half-year results and briefings are also given on
quarterly trading. The CEO and CFO attend roadshows twice per year
to meet with our material and prospective UK and US investors. The
Company also seeks to maintain a dialogue with various bodies which
monitor the Company’s governance policies and procedures. The
Investor Relations Director generally deals with ad hoc queries from
individual shareholders.
The Chair initiates contact with major shareholders after the Annual
Report and Accounts is published to invite them to engage prior to
the Annual General Meeting. It is also an opportunity to discuss
important matters such as our strategy. The Remuneration
Committee Chair also engages in discussion with shareholders on
significant matters relating to executive remuneration, in particular
our updated remuneration policy which is being put forward for
shareholder approval in May 2020.
All Directors receive formal reports and briefings during the year
about the Company’s investor relations programme. Directors also
receive detailed feedback obtained by the Company’s brokers after
meetings, allowing them to develop an understanding of the views of
major shareholders. External analysts’ reports on the Group are also
regularly circulated to Directors. The Directors also receive investor
feedback reports on quarterly results.
Communications with shareholders
The results and results presentations, together with all information
reported to the market via the regulatory information service, press
releases and other shareholder information, are published on the
investor relations section of the Group’s website at http://corporate.
moneysupermarket.com to be viewed and accessed by all
shareholders.
Our Senior Independent Non-Executive Director is available to
shareholders if they have concerns which contact through the normal
channels of the Chair, the CEO or the CFO has failed to resolve, or for
which such contact is inappropriate.
Annual General Meeting
All shareholders will have the opportunity to ask questions at the
forthcoming Annual General Meeting. The Chairs of the Audit,
Nomination, Remuneration and Risk Committees will be available to
answer questions at that meeting. Shareholders may also contact the
Chair, CEO or, if more appropriate, the Senior Independent Non-
Executive Director to raise any issue with one or all of the Non-
Executive Directors of the Company.
The Company prepares separate resolutions on each substantially
separate issue to be voted upon at Annual General Meetings. The
result of the vote on each resolution is published on the Group’s
website after the Annual General Meeting and will be announced via
the regulatory information service. At the 2019 AGM, shareholders
representing 74.63% of the Company’s issued share capital returned
their proxy votes.
s. 172: how we bring the stakeholder voice into
the boardroom
• The Board receives a paper in each board pack reminding them of
their s. 172 and other director duties and having regard to the
Group’s stakeholders when making decisions;
• The Board receives bi-annual updates from the Chief People
Officer on people, culture, diversity, talent and engagement;
•
‘Employee Voice Update’ has been added as a standing agenda item
and NED Employee Champion, Sarah Warby provides feedback on
engagement sessions for further discussion by the Board;
• At the annual strategy two-day off-site meeting between the Board
and Executive team, potential impacts to stakeholders are discussed
and considered, when deciding and agreeing on strategic initiatives;
• The Chair meets with major shareholders and outcomes are
shared with Board members; members of the Executive team also
meet with major shareholders and provide feedback to the Board
in their Management Reports;
• Provider feedback is received through business updates given to
the Board during the year;
• Customer and user updates are provided to the Board by the
Executive team three times per year;
• Key advisers attend and contribute to Board and Committee
meetings;
• Regulatory updates are provided to the Risk Committee and,
where appropriate, to the whole Board, including direct interaction
with the FCA and other regulatory bodies.
CASE STUDY: Manchester Tech Hub
Part of the Reinvent strategy is to continue investing in innovative
products to improve our customers’ experience. To support this,
in September 2019 we opened our new Manchester office,
which operates as a product and engineering hub. In order to
enable this, we decided to relocate 100 of our Ewloe-based roles
to Manchester to ensure that we maximised the opportunity for
collaborative working and optimisation by co-locating our
product and platform-engineering teams. This had the potential
to have a significant impact on the affected employees, so we
ran a comprehensive early engagement process with our Tech,
Product and Data Leadership and People teams and our
dedicated Site Lead for Ewloe to ensure that the employee voice
was considered throughout the decision-making process.
87 of our Ewloe-based employees were involved in a
consultation process to discuss the proposed relocation to
Manchester (the remaining roles were vacancies or members of
the leadership team who had agreed to relocate). As part of this,
the teams wrote a business case, which they discussed during
their collective consultation sessions to detail why their role or
teams would be better placed in Ewloe. These were reviewed by
our Senior People lead and relevant members of the Executive
team and, where a strong case was proposed to remain in Ewloe,
the relocation plan was amended accordingly. Ultimately, 53
employees relocated to Manchester. In addition, in response to
feedback from employees, we provided a daily coach service
between the two sites to ease the transition for the relocated
employees.
As part of this consultation process, significant consideration was
also given to employees remaining in Ewloe, our historical base,
which houses a close-knit community of employees, many of
them long-standing. To ensure that the employee voice was
brought to the executive team during this period of uncertainty,
we hosted our May Non-Executive Director engagement event in
Ewloe to showcase the great customer-facing and back-office
work that is undertaken there, and provide the opportunity for
employees to communicate directly with our Directors and
Executive team. We also introduced a Ewloe Leadership Forum
as an additional engagement mechanism for colleagues to raise
any issues or concerns. This focus on leadership and
engagement has helped to not only foster a greater sense of
security for our Ewloe employees but also to provide our Board
with greater insight into the voice of our Ewloe based employees.
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Moneysupermarket.com Group PLC Annual Report and Accounts 2019
73Moneysupermarket.com Group PLC Annual Report and Accounts 2019Financial StatementsStrategic ReportGovernanceNumber of meetings of the Audit Committee: 4 Allocation of timeFinancial Management and Results 30%Committee Review 7%External Audit 18%Tax 10%Internal Audit and Controls 26%NED Session with auditors 4%Miscellaneous 5%Caroline BrittonChair of the Audit CommitteeThe Audit Committee plays a key role in monitoring the integrity of the Group’s financial reporting, reviewing the material financial reporting judgements and assessing the internal control environmentAudit Committee ReportDear ShareholderThis is my first year as Chair of the Audit Committee and I am pleased to present the Audit Committee’s report for the year ended 31 December 2019. I have set out our role and activities in ensuring appropriate challenge and governance around accounting treatment and the internal control environment, and ensuring that the Annual Report as a whole is fair, balanced and understandable.2019 highlights èfocused on financial reporting, including the processes in place to ensure the Annual Report & Accounts is fair, balanced and understandable; èreviewed the effectiveness of external and internal audit processes and the effectiveness and appropriateness of our system of internal controls; èconsidered and approved the Group’s tax strategy for publication; èoversaw the review of the Group’s Whistleblowing Framework; èoversaw the internal audit team’s cyber review of the Group’s information security management system; èreviewed Audit and Non-Audit Fees (including review of controls over Non-Audit Work and Policy); èrecommended the reappointment of the External Auditor; èoversaw continued improvements in enhancing Internal Reporting to the Committee; and èreviewed Tax and Treasury Policies. Governance
Audit Committee Report continued
Committee membership
I chair the Audit Committee. The other members of the Audit Committee
are detailed below. All the members of the Committee are Independent
Non-Executive Directors in accordance with provision 24 of the 2018
Code and the Board has determined I have recent and relevant financial
experience as required by the 2018 Corporate Governance Code. I am a
qualified accountant with over 30 years of financial experience working
at Deloitte LLP, including 18 years as an audit partner. I am a Non-
Executive Director and Audit Committee Chair for the challenger financial
institution, Revolut Limited. I am also an FCA of the Institute of Chartered
Accountants in England & Wales.
Biographies of the members of the Committee are set out on pages 64
to 65. As a whole, the Committee has competence relevant to the sector
in which the Company operates through the digital and retail customer
experience of Sarah Warby and the financial services experience of
myself and Sally James.
Committee members
Caroline Britton (Chair)(1)
Sally James
Sarah Warby
Robin Freestone(1)
Genevieve Shore(2)
Meetings
Attended
1/1
4/4
4/4
3/3
3/3
(1) Caroline Britton replaced Robin Freestone as Chair of the Audit Committee on
20 September 2019.
(2) Genevieve Shore resigned as Director on 31 July 2019.
The secretary to the Committee is Katherine Bellau.
Role
The primary role of the Audit Committee is to ensure the integrity of
the financial reporting and audit processes and monitor the
effectiveness of the Group’s internal control and risk management
systems. This includes:
• monitoring the integrity of the Financial Statements of the
Company, any formal announcements relating to the Company’s
financial performance and any significant issues and judgements
contained in them;
reviewing the Group’s Financial Statements and the material
financial reporting judgements contained in them;
•
• advising the Board on whether the Committee believes this Annual
Report and the Financial Statements contained within it, when
taken as a whole, are fair, balanced and understandable and
provide the information necessary for shareholders to assess the
Group’s strategy, business activities and financial performance;
reviewing and monitoring the external auditor’s independence and
objectivity and the effectiveness of the audit process, taking into
consideration relevant UK professional regulatory requirements;
•
• developing and implementing a policy on the level, amount and
pre-approval of non-audit services provided by the external auditor;
• advising the Board on the appointment, re-appointment and
removal of the external auditor and the remuneration and terms
of engagement of the external auditor;
•
• monitoring the effectiveness of the Group’s internal control and
risk-management systems, including whistleblowing and fraud
prevention procedures;
reviewing the scope, activities and results of the Group’s Internal
Audit function;
reviewing the Audit Committee’s terms of reference, carrying out
an annual performance-evaluation exercise and noting the
satisfactory operation of the Committee; and
reporting to the Board how it has discharged its responsibilities.
•
•
Written terms of reference that outline the Committee’s authority and
responsibilities are published on the investor relations section of the
Group’s website at http://corporate.moneysupermarket.com and are
available in hard copy form from the Company Secretary. We review
our terms of reference annually. The Audit Committee’s terms of
reference include all matters required by Disclosure Guidance and
Transparency Rule 7.1 and the 2018 Corporate Governance Code.
Committee meetings
The Audit Committee met four times in 2019 and the attendance of
members is shown in the table opposite. In order to maintain effective
communication between all relevant parties, the Chair of the Board,
CEO, CFO, Chief Risk Officer, Head of Internal Audit, Commercial
Finance Director, Group Financial Controller, General Counsel &
Company Secretary, and any other members of the management team
are invited to meetings, as necessary.
Time is set aside periodically to seek the views of the external auditor
without management present. The external auditor has direct access
to the Committee Chair to raise any concerns outside formal
Committee meetings. The Committee Chair also meets separately
with the Head of Internal Audit during the year. In between meetings,
the Committee Chair keeps in touch with the CFO and external audit
partner, as well as other members of the management team. After
each meeting, the Committee Chair reports to the Board on the main
issues that were discussed.
Members of the Audit Committee can, where they judge it necessary
to discharge their responsibilities, obtain independent professional
advice at the Company’s expense.
Financial Statements and reports
The Committee is responsible for reviewing the appropriateness of the
Group’s trading statements, half-year reporting and annual Financial
Statements. We do this by considering, among other things, the
accounting policies and practices adopted by the Group; the correct
application of applicable reporting standards and compliance with
broader governance requirements; the approach taken by
management to report the key judgemental areas of reporting and the
comments of the external auditor on management’s chosen approach.
In 2019, we:
•
reviewed the 31 December 2018 Annual Report and Financial
Statements and the half-year statement to 30 June 2019,
together with reports from the external auditors;
reviewed the trading updates issued in April 2019 and October
2019;
considered the appropriate accounting for new arrangements
in line with IFRS 15 – Revenue from contracts with customers;
considered the appropriateness of the Reinvent strategy costs
of change taken outside adjusted EBITDA;
finalisation of the acquisition accounting related to the
Decision Tech acquisition;
•
•
•
•
• examined key points of disclosure and presentation to ensure
adequacy, clarity and completeness of the Financial
Statements;
reviewed documentation prepared to support the going
concern and viability statements given on pages 33 to 34; and
• updated the Committee’s terms of reference to align with the
•
2018 Corporate Governance Code.
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Moneysupermarket.com Group PLC Annual Report and Accounts 2019
Significant financial statement reporting issues
We identified the issues below as being significant in the context of the 2019 Financial Statements. We consider these areas to be significant
taking into account the level of materiality and degree of judgement exercised by management. We discussed the issues in detail to ensure
that the approaches taken were appropriate. This included reviewing presentations and reports from both management and the external
auditor.
Issue
Committee review
We reviewed and assessed management’s key controls in relation to the recording of revenue
which include:
(a) a completeness check which is performed by reconciling all ‘click’ activity on the website and
ensuring that an invoice has been raised, or revenue has been accrued, where appropriate;
(b) a review to compare accrued revenue at the end of the previous month and actual revenue
invoiced during the following month, with significant differences investigated to provide evidence
that revenues are correctly stated; and
(c) a programme of revenue assurance by the Group’s Internal Audit function.
This helps provide us with assurance that revenues are correctly stated by reviewing provider systems
and controls to ensure that sales made by providers resulting from referrals made by the Group have
been correctly identified and allocated in the provider systems. In addition, management regularly
reviews the quantum and ageing of any accrued revenue balances. The assessment of the Group’s
information system which records the clicks, together with the reconciliation of revenue to cash
receipts, therefore form a key part of the audit. The results of KPMG’s testing are included in the first
half and full-year reports prepared for the Committee. The Committee reviews the reports in detail and
discusses with KPMG.
The judgements in relation to software and development assets largely relate to the future economic
benefits associated with the assets and confirm that capitalisation is in accordance with the relevant
accounting standards. We addressed these matters through papers received from management which
included key IT projects, and we were comfortable with management’s justification. We are reassured
by the fact that business plans in relation to the capitalised assets have received Board approval. This
is also a significant risk area for the audit, and therefore KPMG provide to the Committee their
comments on the approach taken by management.
Revenue recognition:
revenue accrual
As more fully described on pages
112 and 139, the majority of the
Group’s revenue is derived from
success-based commercial deals
which reward the Group for each
product sold by a provider to a
customer referred to it by the
Group. The Group recognises this
revenue at the point at which a
customer leaves one of the
Group’s websites, based on the
number expected to click through
and purchase a product from a
provider site.
Capitalisation of software
and development costs
As more fully described on pages
135 to 138 of the Group’s
Financial Statements, the Group
holds intangible asset balances
arising from the capitalization of
certain software and
development costs principally
relating to developments in the
Group’s front-end platforms and
back-office data warehouse.
We also reviewed and considered the following areas due to their materiality and the application of judgement. However, we considered
them to be stable in nature and therefore did not classify them as significant issues in the context of the 2019 Financial Statements.
Issue
Committee review
Intangible assets impairment-
testing
We reviewed the judgements, assumptions and estimates made by management in preparing the
impairment review to ensure that they were appropriate. We also obtained the external auditors’ views
on the appropriateness of the approach and conclusions. The results of this review were that we were
satisfied with the conclusions reached.
Share-based payment charges
We reviewed the judgements, assumptions and estimates made by management to ensure that they
were appropriate. The results of this review were that we were satisfied with the conclusions reached.
Going concern and viability
statements
In assessing the validity of the statements detailed on pages 33 to 34, we reviewed the work
undertaken by management to assess the Group’s resilience to the Principal Risks under various
scenarios and gained appropriate assurance that sufficient rigour was built into the process.
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Moneysupermarket.com Group PLC Annual Report and Accounts 2019
75
Governance
Audit Committee Report continued
Fair, balanced and understandable Report
and Accounts
One of the key governance requirements is for the Annual Report and
the Financial Statements, taken as a whole, to be fair, balanced and
understandable and to provide the information necessary for
shareholders to assess the Group’s position and performance,
business model and strategy. Ensuring this standard is met requires
continuous assessment of the financial reporting issues affecting the
Group, in addition to the focused exercises which take place during
the production of the Annual Report and Financial Statements. These
focused exercises can be summarised as follows:
• a qualitative review of disclosures and a review of internal
consistency throughout the Annual Report and Financial
Statements;
• a review by the Committee of all material matters, as reported
elsewhere in this Annual Report and Financial Statements;
• a risk-comparison review, which assesses the consistency of the
presentation of risks, and significant judgements throughout the
main areas of risk disclosure in this Annual Report and Financial
Statements;
• a review of the balance of good and bad news; and
• ensuring it correctly reflects:
— the Group’s position and performance as described on pages
30 to 34;
— the Group’s business model, as described on pages 14 to 15;
— the Group’s strategy, as described on pages 18 to 19.
The Directors’ statement on a fair, balanced and understandable
Annual Report and Financial Statements is set out on page 109.
External Auditor
The Committee is responsible for making recommendations to the
Board in relation to the appointment of the external auditor. We also
approve the terms of engagement and fees of the external auditor,
ensuring they have appropriate audit plans in place and that an
appropriate relationship is maintained between the Group and the
external auditor.
In 2019, we:
•
reviewed, considered and agreed the scope and methodology of
the audit work to be undertaken by the external auditor;
• evaluated the independence and objectivity of the external
auditor, having regard to: (a) a report from the external auditor
describing their arrangements to identify, report and manage
conflicts of interest; (b) the extent and nature of non-audit
services provided by the external auditor; and (c) considering the
tenure of the audit partner, who is required to rotate every 5
years in line with ethical standards;
• monitored the quality of services provided by the external
auditor;
• agreed the terms of engagement and fees to be paid to the
•
•
•
external auditor for the audit of the 2019 Financial Statements;
reviewed the report of the FRC’s Audit Quality Review team
relating to their review of KPMG’s 2018 audit of the Group;
reviewed recommendations made by the external auditor in their
management letters and the adequacy of management’s
response; and
considered the plans for rotation of the existing audit partner,
including being introduced to his successor.
Independence and non-audit services
There are policies and procedures in place in relation to the provision
of non-audit services by the external auditor which are reviewed
regularly. This ensures that the Group benefits in a cost-effective
manner from the cumulative knowledge and experience of its auditor,
whilst also ensuring that the auditor maintains the necessary degree
of independence and objectivity. The external auditor is not
permitted to perform any work which they may later be required to
audit, or which might affect their objectivity and independence or
create a conflict of interest. Key points from our internal procedure
for approval of work given to the external auditor are:
• no non-audit work may be placed with the external auditor
without the specific approval of the Audit Committee;
• any approved non-audit services must be in line with the cap limits
•
•
introduced by EU legislation (as referred to below);
the non-audit fees are reported regularly to the Committee; and
various services are prohibited, including the provision of most
types of tax services, valuation services, appraisals or fairness
opinions, outsourcing of internal audit services, management
functions, recruitment services and legal services.
During the year, the value of non-audit services provided by the
external auditor amounted to £0.04m (2018: £0.03m). Non-audit
services amounted to 12% of the value of the audit. EU legislation on
permitted non-audit services came into effect from 17 June 2016
which introduced a permitted non-audit services fee cap of 70% of
the average audit fee over a consecutive three-year period. This cap
will come into effect for the Group in the financial year ending
31 December 2020. The non-audit services during 2019 and 2018
related to the review of the Group’s half-year reporting.
The assurance provided by the external auditor on this item is
considered by the Group as strictly necessary in the interests of the
Group. The non-audit services offered reflects the auditor’s
knowledge and understanding of the Group. The Group has also
continued with the appointment of other accountancy firms to
provide certain non-audit services to the Group in connection with
internal audit, tax, systems and regulatory advice and anticipates that
this will continue in 2020.
The external auditor was not engaged during the year to provide any
services which may have given rise to a conflict of interest. The
Committee is satisfied that the overall levels of audit and non-audit
fees are not material, relative to the income of the external auditor as
a whole, and therefore that the objectivity and independence of the
external auditor was not compromised.
Effectiveness
The Committee considered the quality and effectiveness of the
external audit process, in light of the FRC’s Audit Quality Practice Aid
for Audit Committees (May 2015). We worked with KPMG to
understand their judgements about materiality and looked at the way
they communicated key accounting and audit judgements. This
approach was supplemented by members of the Committee and
senior members of the finance team who regularly interact with the
external auditor completing a detailed questionnaire. The
questionnaire evaluated the overall effectiveness of the external
auditor including the audit partners’ and their team’s approach,
communication, independence, objectivity, and reporting. The results
of the questionnaire were then reported to and discussed by the
Committee. We also assessed the audit fees and value for money
offered by KPMG. We reported our findings to the Board as part of
our recommendation.
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Moneysupermarket.com Group PLC Annual Report and Accounts 2019
The assessment of effectiveness was completed as part of an ongoing
process of review throughout the year, with the Audit Committee
seeking assurances and understanding of the auditor’s approach to
the audit. At the planning meetings for the half-year review and
year-end audit, the external auditor was required to explain their
understanding of significant risks to audit quality, by reference to the
Company’s specific circumstances and changes in the risks and
reasons for those changes. We explored the auditor’s understanding
of our business and industry knowledge which informed their
approach to identifying risks.
During the year, the 2018 audit of Moneysupermarket.com Group plc
by KPMG was reviewed by the FRC’s Audit Quality Review team (‘AQR’).
The AQR routinely monitors the quality of work of certain UK audit
firms through inspections of sample audits and related procedures of
individual audit firms. One finding was raised as a limited
improvement in relation to work performed by KPMG over the activity
of the Company’s Revenue Assurance Team. The Committee and
KPMG have discussed the finding and the identified improvement
area, and the actions taken to incorporate this into the 2019 audit
work. KPMG reported to the Committee as part of their report to the
Committee on these matters, with the Committee concluding that the
findings have been addressed satisfactorily.
The Committee held private meetings with the external auditor as
necessary after Committee meetings to review key issues within their
sphere of interest and responsibility.
Re-appointment
KPMG has acted as the auditor to the Group since 2004 and was
appointed as the auditor to the Company on its flotation in 2007. The
lead audit partner rotates every 5 years to ensure independence. The
KPMG audit partner, Stuart Crisp, will rotate off the audit on 30 April
2020, in accordance with the FRC’s Ethical Standard 3 (Revised). The
Committee has met and approved the appointment of the new audit
partner, who will lead the audit from 2020.
Following a formal competitive tender exercise during 2016, in
relation to the audit for the Group for the year ended 31 December
2017, the Board approved the Audit Committee’s recommendation to
put a resolution to shareholders at the 2017 Annual General Meeting
to re-appoint KPMG, which shareholders subsequently approved.
We have therefore complied with the requirement to ensure the
external audit contract is tendered within the 10 years prescribed by
EU and UK legislation and the Code’s recommendation. We confirm
we have complied with the provisions of The Statutory Audit Services
for Large Companies Market Investigation (Mandatory use of
Competitive Tender Processes and Audit Committee Responsibilities)
Order 2014.
Since KPMG’s re-appointment, we have considered further the length
of KPMG’s tenure and the results of the detailed questionnaire when
assessing their continued effectiveness and independence. We
continue to remain satisfied with the work of KPMG and that it
continues to remain independent and objective. In accordance with
International Standards on Auditing (UK & Ireland) 260 and Ethical
Standard 1 issued by the Accounting Practices Board, and as a matter
of best practice, the external auditor has confirmed its independence
as auditor of the Company, in a letter addressed to the Directors.
Internal control
The Committee is responsible for monitoring and reviewing the
effectiveness of the Group’s internal control and risk-management
systems. Through monitoring the effectiveness of its internal controls
and risk-management, the Committee is able to maintain a good
understanding of business performance, key judgemental areas and
management’s decision-making processes.
In 2019, we:
•
reviewed the framework and effectiveness of the Group’s
system of internal control and risk management, including
financial, operational and compliance controls;
received regular updates from management on internal
control improvements including reports on progress of
automation of financial controls;
reviewed reports from the external auditor, KPMG, of the
results of its controls testing as part of the external audit; and
•
•
• assessed the framework of internal control and risk
•
management to ensure that it was compliant with SM&CR;
and
reported to the Board on our evaluation of the operation of
the Group’s internal control and risk management systems,
informed by reports from Internal Audit (including PwC)
and KPMG.
We consider the adequacy of management’s response to matters
raised and the implementation of recommendations made.
The Board’s statement on internal control and risk-management can
be found on pages 70 to 71.
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Moneysupermarket.com Group PLC Annual Report and Accounts 2019
77
Governance
Audit Committee Report continued
Internal Audit
The Group has an Internal Audit function which, together with the
PwC co-source arrangement, delivers a risk-based internal audit plan
to provide independent assurance over the Group’s key risks. The
Audit Committee meets with the Head of Internal Audit without
management present on an annual basis. In addition, the Head of
Internal Audit meets separately with the Chair of the Committee to
discuss internal audit objectives.
In 2019, we:
•
continued to oversee enhancements to our Internal Audit
function, ensuring it has the right expertise and experience to
provide effective challenge throughout the organisation;
• measured the effectiveness and value of the function through
•
•
metrics and impact assessments;
reviewed the rolling twelve-month Internal Audit plan
including a full review of the appropriateness of audit focus
and cycle times for the Group’s audit universe;
considered the different sources of assurance against the
Group’s key risks to ensure there is comprehensive risk and
assurance coverage;
• agreed and monitored the balance of audit focus across
strategic, operational, third-party and core assurance areas,
with particular focus on Information Security and People risk;
considered internal audit insights of relevance to culture
assurance, including an incentivisation audit and a Contingent
Worker review;
reviewed results from audits carried out including any
unsatisfactory audit findings and related action plans;
considered the different sources of assurance against the
Group’s key risks to ensure there is comprehensive risk and
assurance coverage;
reviewed open audit actions, together with monitoring
progress against the actions;
•
•
•
•
• agreed the plan and received summary reports on the
progress of the Revenue Assurance function; and
conducted an assessment of the Internal Audit function.
•
Whistleblowing
The Group has a whistleblowing process (including an external
confidential reporting hotline) which enables employees of the Group
to raise, in confidence, concerns about possible improprieties in
financial reporting, other operational matters or inappropriate
personal behaviours in the workplace.
In 2019, we:
•
reviewed reports at each meeting from the Company
Secretary and General Counsel on: (a) socialisation
of the external confidential reporting hotline, email and
internet arrangements; and (b) whistleblowing incidents
and their outcomes.
rolled out the Group’s whistleblowing process to
Decision Tech.
•
Risk Committee
The Group has a separate Risk Committee which is chaired by
Sally James. The Risk Committee operates separately but alongside the
Audit Committee. A separate report of the work and responsibilities of
the Risk Committee is set out on pages 82 to 84. The Group also has a
separate Risk & Compliance function, headed by the Chief Risk Officer.
Audit Committee effectiveness
In 2019, we carried out an internal evaluation of Audit Committee
effectiveness which involved the completion of a questionnaire, with
the results being analysed and presented at a Committee meeting for
discussion. The Committee determined it continues to be effective in
fulfilling its role and remains independent. The following actions arose
from the evaluation:
2019 evaluation actions
• ensuring appropriate succession planning for the Committee;
•
improving communications to Committee members on material
matters between meetings;
• ensuring sufficient time for meetings; and
•
continued provision of additional training for Committee
members.
2018 evaluation actions update
We also reviewed progress against actions identified in the 2018
evaluation:
• Composition of the Audit Committee - Caroline Britton, an
independent Non-Executive Director, was appointed to the Audit
Committee, succeeding Robin Freestone as Chair of the
Committee.
Training
The Audit Committee receives or reviews guidance as appropriate
during the year.
In 2019, we:
•
received updates from our external auditor, KPMG, on
financial reporting developments; and
received an update on the tax environment and forthcoming
regulations from Deloitte, our tax adviser.
•
Overview of Committee activities for 2020
Our priority for 2020 will remain the oversight of the assurance
programme to monitor implementation of the strategic initiatives. In
addition, the Committee will review the segmental reporting proposals
with a view to implementing in 2020.
This report was approved by the Board and signed on its behalf by:
Caroline Britton
Chair of the Audit Committee
19 February 2020
78
Moneysupermarket.com Group PLC Annual Report and Accounts 2019
79Moneysupermarket.com Group PLC Annual Report and Accounts 2019Financial StatementsStrategic ReportGovernanceRobin FreestoneChair of the Nomination CommitteeNumber of meetings of the Nomination Committee: 3Allocation of timeCommittee Updates 13% Succession Planning and Development 54%Review of Committee Effectiveness and Structure 15%Diversity and Inclusion 9%Miscellaneous 9%Nomination Committee ReportThe Nomination Committee is responsible for reviewing the structure, size and composition of the Board and its Committees; taking into account skills, knowledge, experience and diversity, and making recommendations to the Board with regard to any changesDear ShareholderAs Chair of the Nomination Committee, I am pleased to present the Nomination Committee’s report for the year ended 31 December 2019. I have set out below our role and activities in reviewing the Board’s size, structure and composition, including the recommendation of appointment of a new Chair and Non-Executive Director, reviewing succession and development plans for the Board and executive management, and overseeing the Group’s diversity plans. Committee membershipI chair the Nomination Committee and the other members, all of whom are Independent Non-Executive Directors, are detailed in the table below. Biographies of the members of the Nomination Committee are set out on pages 64 and 65.Committee membersMeetings AttendedRobin Freestone(1)3/3Andrew Fisher3/3Sally James3/3Genevieve Shore(2)2/2Sarah Warby3/3Bruce Carnegie-Brown(3)1/1(1) Robin Freestone replaced Bruce Carnegie-Brown as Chair of the Committee on 9 May 2019.(2) Genevieve Shore resigned as Director on 31 July 2019.(3) Bruce Carnegie-Brown resigned as Director and Chair on 7 May 2019.Katherine Bellau is Secretary to the Committee.RoleThe role of the Nomination Committee is to: •regularly evaluate the balance of skills, knowledge, experience and independence of the Board; •review the size, structure and composition of the Board, including Board diversity; •identify and recommend to the Board at the relevant time candidates for appointment as Directors; and •give full consideration to succession planning for Directors and other senior executives.2019 highlights èconducted comprehensive searches for: •a Chair successor; •a new Non-Executive Director and Chair of the Audit Committee; èreviewed the size, structure and composition of the Board and its Committees; èreviewed the Group’s internal diversity plans; and ècontinued to review talent within the Group, with an increased focus on succession planning and development at the level below executive management. Governance
Nomination Committee Report continued
The Nomination Committee has a formal, rigorous and transparent
procedure for the appointment of new Directors to the Board. When
the need to appoint a Director is identified, we prepare a candidate
profile indicating the skills, knowledge and experience required,
taking into account the Board’s existing composition, taking into
account the relevant experience and understanding of our
stakeholder groups. We engage external executive search consultants
and consider the gender, nationality, educational and professional
background of candidates, as well as individual characteristics which
will enhance diversity of thinking on the Board. Suitable candidates
are interviewed by Committee members.
We give careful consideration to ensure proposed appointees
have enough time available to devote to the role and that the
balance of skills, knowledge and experience on the Board, with
regard to experience and understanding of our stakeholder groups,
is maintained.
When the Nomination Committee has identified a suitable candidate,
we then make a recommendation to the Board with the Board
making the final decision.
Committee meetings
We held three scheduled meetings during the year, with a number
of ad hoc meetings to provide updates on the various recruitment
processes during the year. Details of the attendance at Nomination
Committee meetings are set out on the previous page.
We invited the CEO, the Chief People Officer and the Company
Secretary to attend meetings of the Nomination Committee. During
2019, we also invited members of the executive management to
present to the Committee in relation to the management of top talent
in their teams and received progress updates from our Diversity and
Inclusion Lead. The Company Secretary acts as secretary to the
Nomination Committee.
In 2019, we:
•
reviewed the composition of the Board, including the
balance of skills, knowledge and experience, taking into
account the experience and understanding of our
stakeholder groups;
conducted a search for, considered and recommended to
the Board the appointment of a new Chair (led by the Senior
Independent Director), Non-Executive Director and Audit
Chair;
reviewed and approved the Board diversity policy, including
a target of 33% female representation and a target of one
Director of colour by 2024;
reviewed the pipeline of top talent to run the business,
particularly at the level below executive management, with
presentations from executive management which also
included updates on diversity plans for their areas of the
business;
considered and recommended to the Board the re-election
of all Directors at the 2020 Annual General Meeting other
than Andrew Fisher, as he will be stepping down at the
conclusion of that meeting;
reviewed and updated the policy for approval of Directors’
external appointments; and
reviewed and updated the Committee’s Terms of Reference
conflicts of interest and the register of Directors’ conflicts
of interest.
•
•
•
•
•
•
We followed the procedure outlined above for the search for the new
Chair and Non-Executive Director, engaging Russell Reynolds as the
external executive search consultants for the appointment of the
Chair and the appointment of the Non-Executive Director.
Russell Reynolds is a signatory to the Voluntary Code of Conduct for
Executive Search Firms on gender diversity and best practice and has
no other connection with the Company. The Committee briefed
Russell Reynolds on our diversity expectations and we considered
and interviewed a wide and diverse range of candidates for each role.
The search for the new Chair was led by Sally James, as Senior
Independent Director. The Board was unanimous in its decision to
appoint Robin Freestone (Chair) and Caroline Britton (Non-Executive
Director and Audit Chair).
The members of the Nomination Committee can, where they judge
it necessary to discharge their responsibilities, obtain independent
professional advice at the Company’s expense.
Written terms of reference that outline the Committee’s authority and
responsibility are published on the investor relations section of the
Group’s website at http://corporate.moneysupermarket.com and are
available in hard copy form on application to the Company Secretary.
We review our terms of reference annually and updated them with
effect from 1 January 2019 to reflect the changes introduced by the
UK Corporate Governance Code (July 2018 version).
Diversity and Inclusion
Boardroom diversity
We now have 57% female representation on the Board and have well
exceeded the target of 33% by 2020 as imposed by the Hampton-
Alexander Review.
The Board’s Statement on Diversity is as follows:
‘The Board of Moneysupermarket.com Group PLC welcomed the
publication of the Hampton-Alexander Review on FTSE Women
Leaders and the Parker Review on Ethnic diversity of UK boards.
We recognise the benefits of having a diverse Board, and see diversity
at Board level as important in maintaining good corporate
governance and Board effectiveness. We want a Board that reflects
diversity in the broadest sense to embrace different perspectives,
insights and challenges such as gender, race, age, educational and
professional background, disability and sexual orientation.
Moneysupermarket.com Group PLC is committed to ensuring that
any Board vacancies arising are filled on merit, in the context of the
skills, experience, independence and knowledge which the Board
requires to be effective. When Board positions become available, the
Company will remain focused on ensuring that a diverse range of
candidates, taking into account all aspects of diversity as described
above, are considered, whilst ensuring that appointments continue to
be based on merit, (measured against objective criteria) and the skills
and experience the individual offers. The Board has targeted a
minimum of one director of colour by 2024 and has achieved its
target of a minimum female representation on the Board of 33%
by 2020.
The Nomination Committee reviews and assesses composition on
behalf of the Board and recommends appointments of new Directors.
As part of these processes, the Nomination Committee will consider
the balance of skills, experience, independence and knowledge of the
Board and the diversity representation.’
80
Moneysupermarket.com Group PLC Annual Report and Accounts 2019
Moneysupermarket Group has
climbed to number 2 (from 30 in 2018)
on the FTSE250 ranking for gender
balance on Board and in Leadership
The Hampton Alexander Review 2019, figures as at 30.06.2019
As at the date of this report, the Board had a total of seven Directors.
The skill set of the Non-Executive Directors includes financial,
economic, financial services, banking, digital, technology,
communications and consumer expertise.
As part of our evaluation of the Nomination Committee, it was
considered that whilst progress has been made, more could be done
in relation to considering candidates for the Board from a wide range
of backgrounds. It was therefore agreed that for future Board
recruitment, we will ensure that the Board’s diversity and inclusion
requirements form a key part of the role specification. We have a
newly established internal Employee Resource Group which has the
objective of striving for diverse representation at all levels in our
business, including, but not limited to women and ethnic minorities.
The co-chairs (or appropriately qualified members) of that group will
be briefed on the approach we take to increase diversity in future
Board recruitment processes.
Executive Management and Direct Reports
Below the boardroom level, our executive management team is 33%
female and 67% male. The direct reports of the executive
management team are 44% female and 56% male. Combined, our
gender breakdown for both the executive and their direct reports is
41% women and 59% men as of 31 December 2019.
Board of Directors
Employees
42%
58%
57%
43%
Female
Male
Across the Group
Our commitment to transforming our culture to be more inclusive
and innovative is a key element of our Reinvent strategy and supports
our purpose of helping households save money. We recognise that
an inclusive environment, where colleagues can be their true,
authentic selves and everyone’s voice is valued, fosters better
creativity and innovation for our customers and users.
Our Diversity and Inclusion Lead is responsible for developing and
driving our strategy to create a diverse and inclusive company, and to
report on activities and progress to the Nomination Committee. In
2019, we:
•
identified and communicated the behaviours that we value and
that underpin our cultural transformation;
• embedded our nine Employee Resource Groups into ways of
•
•
working that support our culture;
strengthened our commitment to supporting, welcoming and
valuing colleagues from diverse backgrounds by taking part in our
first Manchester Pride Parade, celebrating Black History Month,
investing in manager mental health training and implementing
coaching support for new parents and their line managers;
further reduced our gender pay gap, and exceeded the Hampton-
Alexander Review target of 33% women across the Board and
leadership teams; and
• gained external recognition for the Group as an inclusive
employer. Further information is on page 47 of the Sustainability
and stakeholder report.
Nomination Committee effectiveness
In 2019, we carried out an internal evaluation of Nomination
Committee effectiveness which involved the completion of a
questionnaire, with the results being analysed and presented at a
Committee meeting for discussion. The Committee determined it
continues to be effective in fulfilling its role and remains independent.
2019 evaluation actions
The following actions arose from the evaluation:
• Continued focus on Committee membership succession planning;
and
• Ensure sufficient time for Committee meetings.
2018 evaluation actions update
We also reviewed progress against actions identified in the 2018
evaluation:
• Executive search process: the Board’s diversity and inclusion
requirements now form a key part of role specification;
• Committee Chairs and composition: new Committee Chairs were
appointed for both the Nomination and Audit Committees.
Overview of Committee activities for 2020
With the departure of Genevieve Shore in 2019 and Andrew Fisher in
May 2020, the Committee commenced a search for two additional
Non-Executive Directors with appropriate product and remuneration
experience. I am delighted to report that Supriya Uchill and James
Bilefield will be joining the Board later this year, further strengthening
both the experience and diversity of the Board.
The Committee has initiated a formal search for Mark Lewis’
successor, which includes internal and external candidates. Further
work will be carried out on succession planning at Board level as well
as a review of the talent pipeline within the Business.
The Committee will also contribute to the external evaluation of the
Board focusing on the Board’s composition and diversity and how
effectively the Board members work together to achieve objectives.
This report was approved by the Board and signed on its behalf by:
Robin Freestone
Chair of the Nomination Committee
19 February 2020
Moneysupermarket.com Group PLC Annual Report and Accounts 2019
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Number of meetings of the Risk Committee: 3 Allocation of time82Moneysupermarket.com Group PLC Annual Report and Accounts 2019GovernanceThe Risk Committee is responsible for overseeing the Group’s risk management framework, ensuring that risks are appropriately identified, managed and mitigated, and advising the Board on risk appetite, strategy and cultureDear ShareholderAs Chair of the Risk Committee, I am pleased to present the Risk Committee’s report for the year ended 31 December 2019. I have set out our role and activities in overseeing the Group’s risk management framework, ensuring risks are appropriately identified, managed and mitigated, and advising the Board on risk appetite, strategy and culture.Sally JamesChair of the Risk CommitteeRisk Committee ReportCommittee Updates 5%Risk in Focus 45%Legal & Risk Reporting 24%Annual Risk & Compliance Plan 8%NED Meetings 5%Review of Committee Effectiveness 3%Miscellaneous 11%2019 highlights èmonitored with reports from the Chief Risk Officer, the Group’s readiness for compliance with the Senior Manager and Certification Regime; èoversaw the extension of the Group’s risk management framework to Decision Tech; ècontinued to focus on technology and data security risks and management’s progress on improvements to cyber security; èassessed the potential challenges associated with Brexit including the preparation of mitigation plans; èreviewed and assessed the identification and management of the Group’s people related risks; and èmonitored and advised the Board on the risks associated with the Group’s strategic priorities and advised the Board on risks associated with the proposed revisions to the Group strategy. Committee membership
I chair the Risk Committee and the other members, all of whom are
Independent Non-Executive Directors, are detailed in the table below.
Biographies of the members of the Committee are set out on pages
64 to 65.
Committee members
Sally James (Chair)
Andrew Fisher
Sarah Warby
Genevieve Shore(1)
Caroline Britton(2)
Robin Freestone(3)
Meetings
Attended
3/3
3/3
3/3
2/2
0/0
2/2
(1) Genevieve Shore resigned as Director on 31 July 2019.
(2) Caroline Britton’s appointment to the Board was effective after the last Risk
Committee meeting held in 2019.
(3) Robin Freestone stepped down as a Committee member upon his appointment
as Board Chair on 9 May 2019. Robin Freestone attended the September meeting
of the Risk Committee in his capacity as Audit Chair.
The secretary to the Committee is Katherine Bellau.
The Risk Committee maintains close links with the Audit Committee,
with the Chair of each Committee being a member of the other. This
cross-membership and liaison between the Committees, on agenda
items and reports, facilitates effective linkage between both
Committees and ensures that any matters relating to internal control
and financial reporting are considered in an effective and timely
manner. In addition, the Risk Committee works with the
Remuneration Committee to ensure that risk is properly considered
in setting the Group’s remuneration policy. I am also a member of the
Remuneration and Nomination Committees.
Role
The primary role of the Risk Committee is to assist the Board in its
oversight of risk management within the Group, including risk
appetite, risk tolerance and the risk management framework. This
includes:
• advising the Board on the overall risk appetite, tolerance, strategy
and culture;
• overseeing and advising the Board on the current risk exposures
and future risk strategy;
• overseeing the application of the risk management framework;
reviewing reports received from management, the Risk &
•
Compliance function and, where appropriate, Internal Audit or
third parties on the identification, management and mitigation of
risks;
reviewing reports from the legal team in relation to legal matters
affecting the Group;
•
•
• overseeing compliance with relevant legal and regulatory
requirements including financial crime and anti-bribery
procedures;
in relation to proposed strategic transactions, material acquisitions
or disposals, ensuring that a due diligence appraisal of the
proposition is undertaken, which includes an assessment of risks
and implications for the risk appetite and tolerance; and
considering and approving the remit of the Risk & Compliance
function and ensuring it has adequate resources.
•
Committee meetings
We met three times in 2019 and the attendance of our members is
shown in the table on the left of this page. We invited the Chair of the
Board, CEO, CFO, Chief Risk Officer, Head of Internal Audit and the
Company Secretary and General Counsel, together with appropriate
members of the management team with responsibility for
management of key risks and the external auditor to meetings as
necessary. The Committee also meets separately with the Chief Risk
Officer at least once a year.
After each meeting, I report to the Board on the main issues that we
discussed.
The members of the Risk Committee can, where they judge it
necessary to discharge their responsibilities, obtain independent
professional advice at the Company’s expense.
Principal activities in 2019
The Committee has an annual schedule of work, developed from its
terms of reference, with standing items that it considers at each
meeting, in addition to any specific matters upon which the
Committee has decided to focus. This schedule of work is expected to
evolve to reflect the Group’s strategy and changes to the economic
and regulatory environment in which the Group operates. The Risk
Committee receives regular reports from the management team, the
Chief Risk Officer and the General Counsel.
In 2019, we:
• updated and approved the Group Risk Appetite Framework
and Statement following scenario analysis and consideration
by management, ensuring it is aligned with the
Group strategy;
• oversaw the extension of the Group’s risk management
•
•
framework to Decision Tech;
received reports from management on how risks associated with
the strategic initiatives and received ad hoc reports relating to
new or emerging risks;
reviewed and assessed the identification and management of
the Group’s people related risks;
• oversaw improvements in the management of technology risks,
with a focus on cyber security;
• assessed the challenges associated with Brexit including the
•
preparation of mitigation plans;
received updates and oversaw management’s actions in relation
to the consideration of risks associated with the Senior Manager
& Certification Regime;
• oversaw and monitored compliance with General Data
•
•
Protection Regulation (‘GDPR’) and our data protection policies;
reviewed the conduct scorecards at each meeting to ensure we
are putting customers at the heart of the business through our
‘Customer First’ programme;
continued to enhance reporting of legal matters and regulatory
developments; and
• oversaw compliance with evolving regulation and interactions
with our regulators including the FCA, in particular in relation to
the General Insurance Pricing Market Study and the embedding
of Insurance Distribution Directive requirements.
Written terms of reference that outline the Committee’s authority and
responsibilities are published on the investor relations section of the
Group’s website at http://corporate.moneysupermarket.com and are
available in hard copy form from the Company Secretary. We review
our terms of reference annually.
Moneysupermarket.com Group PLC Annual Report and Accounts 2019
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Governance
Risk Committee Report continued
Risk & Compliance
The Group has a Risk and Compliance function, led by the Chief Risk
Officer, which reviews the Group’s risks and controls together with
the Group’s compliance with the requirements of the various bodies
that regulate the Group’s activities. These regulatory bodies include
the FCA, the Information Commissioner’s Office, Ofgem (which
operates a voluntary code, relating to energy price comparison, to
which MoneySuperMarket subscribes) and Ofcom (which operates a
voluntary code relating to telephone, broadband and pay-TV price
comparison to which Decision Tech subscribes).
2018 evaluation update
We also reviewed progress against actions identified in the 2018
evaluation:
• Reporting from the Chief Risk Officer is now structured between
current and emerging risks to ensure the Committee balances its
time appropriately; and
• Extended Conduct Scorecards to each of the Group’s brands,
including Decision Tech to help focus on putting customers at the
heart of the business.
In 2019, we:
•
reviewed and approved the Risk and Compliance plan, which
defines the scope of the work that the function will
undertake including compliance monitoring and assurance
activities across the Group – this included assurance
activities relating to FCA regulation and compliance with
GDPR, both internally and in relation to key third parties
which support our business;
considered the updates against the Risk & Compliance plan
and results of the work performed since the previous
meeting and management’s response; and
reviewed the resources of the Risk and Compliance function.
•
•
Risk Committee effectiveness
In 2019, we carried out an internal evaluation of Risk Committee
effectiveness which involved the completion of a questionnaire, with
the results being analysed and presented at a Committee meeting for
discussion. The Committee was considered to be effective in fulfilling
its role during 2019 and remains independent.
2019 evaluation actions
The following action arose from the evaluation:
• Communication and updates to the Committee in between
meetings - The Committee will enhance processes on
communication of material matters between meetings,
including using the Risk and Audit Committee agendas
interchangeably, and ensuring timely updates to the
Committee of material regulatory changes.
Overview of Committee activities for 2020
The management of operational and conduct risks will continue to be
our priority for 2020. We will focus on management of risks
associated with the delivery of the strategic initiatives and review the
Group’s updated business continuity arrangements. We will oversee
the ongoing embedding of enhanced controls in respect of cyber
security, data privacy and third party management. We will also
oversee the Group’s preparation for upcoming regulatory
developments, including the implications of the final report from the
FCA General Insurance Pricing Market Study and the ePrivacy
Regulation.
The Group recognises that regulation in general, and in particular
the activities of the FCA, Ofgem and CMA, will continue to be a feature
of the price comparison market. The Group has invested, and will
continue to invest, in skills and resources in this area in 2020.
This report was approved by the Board and signed on its behalf by:
Sally James
Chair of the Risk Committee
19 February 2020
84
Moneysupermarket.com Group PLC Annual Report and Accounts 2019
Directors’ Remuneration Report
Remuneration
at a glance
As a Committee we ensure that our remuneration framework
continues to align with our Reinvent strategy
How we performed in the year
Group Revenue
Group Adjusted EBITDA
Customer satisfaction
£388.4m
(2018: £355.6m)
£141.5m
(2018: £129.4m)
74(2018: 74)
How performance links to Executive Directors Annual Bonus
Group Revenue
Group Adjusted EBITDA
Customer satisfaction
A
£372m
B
£387m
C
£402m
A
£138m
B
£143m
C
£149m
A
74
B
75
C
76
A Threshold B Target C Maximum
Achieved
Personal targets
Performance targets are set each year by the Remuneration Committee by reference to factors such as the
budget and strategic objectives for the year, progress against the prior year and market expectations. Personal
targets for 2019 included delivery of the Reinvent strategy, delivering the budget and diversity and inclusion.
See pages 98 and 99
Total Remuneration received by our Executive Directors
Mark Lewis
CEO
Scilla Gimble
CFO
See page 97
Salary
Taxable Benefits
Pension
Annual Bonus
LTIP
£1,244,266
Salary Taxable Benefits
Pension
Annual Bonus
Other £1,170,325
Moneysupermarket.com Group PLC Annual Report and Accounts 2019
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86Moneysupermarket.com Group PLC Annual Report and Accounts 2019GovernanceDirectors’ Remuneration ReportThe Remuneration Committee’s key responsibility is to determine and apply the Remuneration Policy to ensure it promotes the delivery of our strategy and the long-term success of the Group2019 highlights èundertook a review of the executive remuneration framework and developed a new Remuneration Policy; èconsulted with shareholders on the proposed changes to the Policy; and èdetermined the incentive outcomes for the Executive Directors and executive management team.Andrew FisherChair of the Remuneration CommitteeNumber of meetings of the Remuneration Committee: 5Allocation of timeDear ShareholderI am pleased to present the Directors’ Remuneration Report for the year ended 31 December 2019.Our current Remuneration Policy was approved by over 98% of shareholders at the 2017 AGM. In line with the normal three-year renewal cycle, we will be seeking shareholder approval for a new Policy, set out on pages 89 to 95 at the AGM in 2020. In advance of this, the Remuneration Committee undertook a review of our current Policy and consulted with our major shareholders as well as key representative bodies on the proposed changes. A summary of the key changes is set out on the following pages. Pages 95 to 103 of this report constitute the Annual Remuneration Report, summarising the 2019 outcomes and how we intend to operate the Policy in 2020.Committee membershipI chair the Remuneration Committee and the other members, all of whom are independent Non-Executive Directors are detailed in the table below. Biographies of the Committee members are set out on pages 64 to 65.Committee membersMeetings AttendedAndrew Fisher (Chair)5/5Sally James5/5Sarah Warby5/5Genevieve Shore(1)3/3Caroline Britton(2)1/1Robin Freestone(3)2/2(1) Genevieve Shore resigned as Director on 31 July 2019.(2) Caroline Britton’s was appointed as a member of the Committee on 20 September 2019.(3) Robin Freestone stepped down as a Committee member upon his appointment as Board Chair on 9 May 2019.The Secretary to the Committee is Katherine Bellau.2020 Remuneration Policy As indicated in my letter in last year’s report, during 2019 and early 2020, the Committee undertook a review of the executive remuneration framework. We concluded that the current framework has served the business and shareholders well, and as a result, we are not proposing any fundamental changes to the framework nor seeking any increases to quantum. CEO and Exec Team Remuneration 32%LTIP 13%SAYE) 7%Governance 10%Directors Report and Remuneration Report 8%2020 Remuneration Policy and Planning 15%Miscellaneous 15% Our reward philosophy remains unchanged. We believe in a simple
and transparent framework which rewards our Executives based on
the financial and strategic performance of the business, the value
created for our shareholders, and their individual performance.
We also recognise that investor expectations around executive pay
continue to rapidly evolve, and we are proposing a number of
changes to ensure we remain aligned with investor expectations,
including the 2018 changes to the UK Corporate Governance Code.
In determining the new Policy the Committee followed a robust
process which included discussions on the content of the Policy at
Remuneration Committee meetings during 2019 and early 2020. The
Committee considered the input from executives and our
independent advisors, and as well as considering best practice,
shareholder guidance, and specific feedback from our major
shareholders. In reaching their decisions on the new Policy the
Remuneration Committee considered the following principles as
recommended in the revised 2018 UK Corporate Governance Code:
The key proposed changes to Policy are:
• Pension for new hires aligned to wider workforce. Any new
Executive Director appointment will be eligible to receive pension
contributions (or a cash allowance in lieu) at a maximum rate
which is aligned to that received by the wider workforce (currently
5% of salary).
• Pension for incumbents frozen. Pension arrangements for
incumbent Executive Directors will be frozen at the current
monetary value. Any future salary increases will therefore reduce
the amount received as a percentage of salary (currently 20% of
salary).
• Strengthening bonus deferral. We will strengthen our bonus
deferral policy to require one third of any bonus earned to be
deferred. This is likely to increase, in practice, the proportion of
the bonus which will be deferred each year (compared to our
previous approach introduced in the 2017 Policy which required
amounts above target to be deferred).
• Post-employment shareholding policy. In accordance with the
2018 UK Corporate Governance Code, the Group will implement a
post employment shareholding policy as follows:
— We are adopting a tapered approach of 100% of our
shareholding requirement (or actual holding, if lower) for the
first year, and 50% of that requirement for the second year.
— This will apply to shares acquired from awards granted after
the approval of our new policy at the 2020 AGM.
This policy is in addition to our current provisions, where an Executive
Director ceases employment:
— Deferred bonus shares will continue to be subject to the
two-year deferral period;
— Vested LTIP shares will continue to be subject to the two-year
holding period; and
— Unvested LTIP awards will continue for ‘good leavers’ (on a time
and performance pro-rated basis) on the original vesting and
holding timeline such that no shares will be delivered before
five years from grant.
• Enhanced malus / clawback and discretion provisions.
Following a review, we have enhanced our provisions and
processes in this area to align with guidance, as follows:
— Malus / clawback. We have introduced new circumstances
under which the provisions could be triggered (including
‘corporate failure’ and ‘serious reputational damage’);
— Discretion. We have also enhanced the provisions in our
incentive plans which enable the Committee to exercise
discretion to override the formulaic outcome.
The above changes are codified into our Remuneration Policy on
pages 89 to 95.
• Clarity. The policy is designed to allow our remuneration
arrangements to be structured such that they clearly support, in a
sustainable way, the financial objectives and the strategic priorities
of the Company. The Remuneration Committee remains
committed to reporting on its remuneration practices in a
transparent, balanced and understandable way.
• Simplicity. The policy consists of three main elements: fixed pay
(salary, benefits and pension), an annual bonus award and a long
term incentive award. The annual bonus is based on a
combination of financial measures and individual strategic
objectives tied to our key corporate objectives. The LTIP is
currently based on three measures: EPS growth, relative TSR and
Revenue.
• Risk. Remuneration policies are in line with our risk appetite. An
enhanced malus and clawback policy is in place, and the
Committee has the discretion to reduce variable pay outcomes
where these are not considered to represent overall company
performance or the shareholder experience. One third of bonus
awards are deferred into shares for 2 years, and vested shares
under the LTIP must be retained for a further two years, further
ensuring that Executive Directors are motivated to deliver
sustainable performance.
• Predictability. The Committee considers the impact of various
performance outcomes on incentive levels when determining pay
levels. These can be seen in the scenario charts in our Policy
Report.
• Proportionality. A substantial portion of the package comprises
performance based reward, linked to the delivery of strong
company performance and the achievement of key strategic
objectives. The Committee uses discretion where required to
ensure that performance outcomes are appropriate.
• Alignment to culture. In determining executive remuneration
policies and practices, the Remuneration Committee considers a
number of wider workforce themes as part of its review, including
workforce demographics, engagement levels and diversity to
ensure executive remuneration is appropriate from a cultural
perspective.
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Moneysupermarket.com Group PLC Annual Report and Accounts 2019
87
Governance
Directors’ Remuneration Report continued
Pay for performance in 2019
In line with our reward philosophy and existing Policy, during 2019, the variable elements of executive remuneration were focused on simple
and transparent measures of revenue growth, adjusted EBITDA, adjusted earnings per share (‘EPS’) growth, total shareholder return (‘TSR’) and
key strategic objectives.
Our Reinvent strategy has continued to improve the customer experience and has delivered new market growth, with our diverse portfolio
balancing mixed market conditions. The Committee has been focused on ensuring our remuneration framework continues to align with the
Reinvent strategy and best practice. The annual bonus and Long-Term Incentive Plan (‘LTIP’) awards in respect of 2019 performance were
based on challenging targets, as disclosed on pages 98 and 99.
2019 has been another year of growth for the Group with revenue increasing by 9% to £388.4m and adjusted EBITDA increasing by 9% to
£141.5m. Our executive team has continued to focus on the execution of our growth strategies, performing well against their stretching
individual performance targets (aligned to some of the key achievements referred to in the Strategic Report on pages 1 to 61). We have
reviewed the performance related elements of the Executive Directors’ remuneration to ensure the outcomes are consistent with the overall
performance of the Group.
As a result, the Committee determined that Mark Lewis and Scilla Grimble will receive a bonus for their performance of 84% and 75%
respectively of their basic salary (which represents 55.8% and 55.6% of the maximum). In determining the remuneration outcomes for the
Executive Directors, the Committee were satisfied that the outcomes were in line with performance and that they did not need to exercise any
discretion to override the amounts awarded.
The 2017 LTIP award, which was based on a combination of stretching compound annual growth in adjusted EPS and comparative total
shareholder return, will vest at 9.6% of the maximum based on performance over the three-year performance period to 31 December 2019.
For the EPS element (80% weighting), actual performance was 5% per annum against targets set of 7% to 17% per annum and therefore the
level of vesting was 0%. For the TSR element (20% weighting), actual TSR performance of +39% was between median and upper quartile
against the FTSE 250 (excluding investment trusts) and resulted in a vesting level of 48% for this portion of the award (9.6% of the total award).
Approach to remuneration in 2020
Both incumbent Executive Directors will receive an increase to base salary of 2%, which is aligned to the increase available to the wider
workforce.
The proposed performance measures and weighting for both the annual bonus and the LTIP are summarised below:
• 2020 bonus: Group EBITDA (50%), Group revenue (20%), Net Promoter Score (10%), and individual objectives (20%);
• 2020 LTIP award: EPS growth (50%), Revenue (30%), relative TSR (20%).
The key change is the introduction of revenue growth as a third performance measure in the LTIP, alongside EPS and TSR. We believe this
increased focus on revenue better aligns with our Reinvent strategy objective of reaccelerating core growth and unlocking new market growth.
Targets for the 2020 LTIP award have been set as follows:
• As with previous awards, threshold performance results in 20% vesting of the maximum and stretch performance results in 100% vesting
of the maximum;
• Threshold to stretch targets over the three-year performance period are: 5% to 15% EPS growth per annum; 4% to 9% revenue growth per
annum; median to upper quartile TSR performance versus the FTSE 250 (excluding investment trusts);
• Performance targets for EPS and TSR remain the same as for 2019 LTIP awards and this is the first time we have set revenue targets for the
LTIP.
Alignment with shareholders
We are mindful of our shareholders’ interests and are keen to ensure a demonstrable link between reward and value creation. We remain
committed to an open and ongoing dialogue with our shareholders on the issue of executive remuneration and the Committee welcomed the
feedback we received in our consultation of the new Policy.
We are pleased with the support we have received in the past from shareholders with over 98% approval for both our previous Remuneration
Policy in 2017 and for the Annual Remuneration Report at last year’s AGM. We look forward to receiving your continued support at the
forthcoming AGM.
Andrew Fisher
Chair of the Remuneration Committee
19 February 2020
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Moneysupermarket.com Group PLC Annual Report and Accounts 2019
Directors’ Remuneration Policy
Set out below is the Directors’ Remuneration Policy, which will be put to a binding shareholder vote and become formally effective at the 2020 Annual
General Meeting.
The design and implementation of the Remuneration Policy is the responsibility of the Company’s Remuneration Committee. Further information on
the composition and operation of the Remuneration Committee is set out on pages 86 and 102.
Changes from the previous Policy
The main changes to this Remuneration Policy, from the previous policy approved by shareholders at the 2017 AGM, and as described in the
Chair’s introductory statement, are as follows:
• Reduced pension opportunity for newly appointed Executive Directors to be in line with the wider workforce;
•
• Enhanced the provisions of the annual bonus deferral, such that one third of any bonus earned will be deferred into shares;
•
• Enhanced the malus and clawback provisions.
Implementation of a post-employment shareholding requirement to strengthen alignment with shareholders; and
Frozen pension opportunity as an absolute monetary amount for incumbent Executive Directors;
Remuneration Policy Table
Base salary
Purpose and link to strategy To provide competitive fixed remuneration to attract and retain Executive Directors of the calibre required to
deliver the business strategy for shareholders.
Operation
The base salary for Executive Directors may be reviewed annually by the Committee. Individual salary
adjustments may take into account each Executive Director’s performance and experience in role, changes in
role or responsibility, the Group’s financial performance, as well external market data.
Maximum
There is no prescribed maximum base salary.
Salary increases are ordinarily in line with the broader employee population but on occasions may need to
recognise, for example, an increase in the scale, scope or responsibility of the role and developments in the
wider competitive market.
Current base salary levels are set out on page 95.
Performance targets
No specific targets although the Committee will take into account individual performance when considering
salary increases.
Pension
Purpose and link to strategy To provide an appropriate retirement benefit that is competitive in the relevant market.
Operation
Maximum
Executive Directors may participate in the Company’s defined contribution pension scheme and/or receive salary
supplements, or such other allowance as the Committee considers appropriate.
A maximum contribution or cash supplement of 20% of 2019 base salary for current Executive Directors. Pension
contributions for current Executive Directors will be capped at the current monetary value and will not increase
with any future pay rises. Newly appointed Executive Directors will have a maximum opportunity in line with the
wider workforce (currently 5% of base salary).
Performance targets
Not applicable.
Benefits
Purpose and link to strategy To provide market competitive benefits.
Operation
Maximum
Current benefit provision includes a car allowance, life insurance and private medical insurance. Other benefits
may be provided where appropriate including, for example, relocation and travel expenses and reimbursed
business expenses (including any associated tax liability) incurred when travelling in performance of duties.
There is no prescribed maximum monetary value for benefit provision. Benefits are set at a level which the
Committee determines is reasonable and appropriate and the value may vary depending on the benefit provided
and the market cost of the benefit given the individual’s personal circumstances.
Performance targets
Not applicable.
Moneysupermarket.com Group PLC Annual Report and Accounts 2019
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Governance
Directors’ Remuneration Report continued
Remuneration Policy Table continued
Annual bonus
Purpose and link to strategy Incentivises the delivery of stretching financial, operational and strategic annual performance targets. Deferral
into Moneysupermarket.com Group PLC shares increases long-term alignment with shareholders.
Operation
The annual bonus is based on performance against stretching targets set at the start of the year by the
Committee, and assessed following the end of the year.
Maximum
Performance targets
A proportion of any annual bonus earned (at least one third) will be deferred into an award of
Moneysupermarket.com Group PLC shares under the terms of the Deferred Bonus Plan (‘DBP’). DBP awards will
normally vest at least 2 years after grant. The remainder will be paid in cash following the year end.
Clawback provisions apply for a period of two years following the payment of a cash bonus and the grant of any
DBP award.
The maximum annual bonus opportunities in respect of a financial year will be:
• CEO: 150% of base salary;
• CFO: 135% of base salary.
Where considered appropriate in exceptional circumstances, the Committee may determine that the maximum
annual bonus opportunity in respect of a particular financial year is up to 200% of base salary.
Payment is determined by reference to performance assessed over one financial year based on financial and
strategic performance measures which the Committee considers to be aligned to the strategy and the creation of
shareholder value. Such measures may include:
• Adjusted EBITDA;
• Revenue;
• Measures aligned to the strategy or KPIs;
• Personal objectives.
The Committee determines the weightings of the performance measures each year. The overall framework will
normally be weighted towards financial measures of performance. The performance measures and weightings for
the 2020 financial year are shown on page 96. The Committee retains discretion to use different or additional
measures or weightings in future years to ensure that the bonus framework appropriately supports the business
strategy and objectives for the relevant year.
Performance targets are set each year by the Committee by reference to factors such as the budget and strategic
objectives for the year, progress against the prior year and market expectations. Pay-out will be based on a scaled
performance target schedule, with the level of pay-out for threshold performance being no higher than 15% of the
maximum. The target schedule will be disclosed retrospectively in the Annual Remuneration Report.
The Committee has the discretion to adjust performance targets for any exceptional events that may occur during
the year.
The Committee has discretion to override the formulaic outcome from the performance targets if appropriate (for
example, in order to reflect the Group’s overall performance).
Long-Term Incentive Plan
Purpose and link to strategy Designed to align with both the strategic objectives of delivering sustainable earnings growth and the interests of
shareholders.
Operation
Awards are made under the 2017 Long Term Incentive Plan, approved at the 2017 AGM.
Awards of Moneysupermarket.com Group PLC shares which vest subject to performance measured over a
period of at least 3 years. Vested awards may then be subject to an additional holding period, which unless the
Committee determines otherwise, will apply up to the fifth anniversary of the date of grant.
Maximum
Clawback provisions apply for a period of 5 years from the date of grant.
The maximum award levels in respect of a financial year will be:
• CEO: 175% of base salary;
• CFO: 150% of base salary.
Where considered appropriate, the Committee may make an LTIP award in respect of a particular financial year
of up to 200% of base salary, in line with the rules of the plan.
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Moneysupermarket.com Group PLC Annual Report and Accounts 2019
Performance targets
Vesting is determined by reference to performance assessed over a period of at least 3 years, based on
performance measures which the Committee consider to be aligned with the delivery of strategy and long-term
shareholder value.
For awards to be made in 2020, the measures are:
• Adjusted earnings per share (EPS) – 50%
• Revenue – 30%
• Comparative total shareholder return (TSR) – 20%
The Committee has discretion to use different or additional performance measures or weightings for awards in
future years to ensure that the LTIP remains appropriately aligned to the prevailing business strategy and
objectives.
Performance targets are set for each award by the Committee. The threshold level of vesting will be no higher
than 20% of the maximum award.
Any performance target may be amended if an event occurs during the performance period which causes the
Committee to consider an amended performance target would be more appropriate and not materially less
difficult to satisfy.
The Committee has discretion to override the formulaic outcome from the performance targets if appropriate
(for example, in order to reflect the Group’s overall performance).
All employee share plans
Purpose and link to strategy To encourage wider employee share ownership and thereby increase alignment with shareholders.
Operation
Maximum
Executive Directors are eligible to participate in all employee share plans, which are offered on similar terms to all
employees, such as HMRC-approved Sharesave plans and Share Incentive Plans.
The maximum which applies to all employees, which includes the limits for any HMRC-approved plans are as
defined by HMRC from time to time.
Performance targets
Not applicable.
Share ownership guidelines
Purpose and link to strategy To increase long term alignment between executives and shareholders.
Operation
Executive Directors are required to build up and maintain a substantial holding of Moneysupermarket.com
Group PLC shares of 200% of base salary.
To achieve this, Executive Directors must retain 50% of the net of tax vested LTIP shares until the guideline is
met. Unvested deferred bonus shares and vested shares subject to a holding period under the LTIP will count
towards the guideline (on a net of tax basis).
Maximum
Not applicable.
Performance targets
Not applicable.
Post-employment shareholding
Purpose and link to strategy To align Executive Director and shareholder interests after they have left the Group.
Operation
Post-cessation shareholder guidelines of 200% of salary (or actual holding if lower) in year 1 and 100% of salary
(or actual holding if lower) in year 2. This will apply to share awards made after the approval of the new Policy.
Unvested deferred bonus shares will continue to be subject to the two-year deferral period;
Vested LTIP shares will continue to be subject to the two-year holding period; and
Unvested LTIP awards will continue for ‘good leavers’ on a time pro-rated basis, subject to the original
performance targets, and on the original vesting and holding timeline such that no shares will be delivered
before 5 years from grant.
Maximum
Not applicable.
Performance targets
Not applicable.
Moneysupermarket.com Group PLC Annual Report and Accounts 2019
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Governance
Directors’ Remuneration Report continued
Remuneration Policy Table continued
Non-Executive Director fees
Purpose and link to strategy To provide market competitive fees which reflect the time commitment and responsibilities of each role.
Operation
The fees for the Non-Executive Directors (excluding the Chair) are determined by the Board and comprise a base
fee with additional fees payable for additional responsibilities. The fees for the Chair are determined by the
Committee and are structured as a single fee.
Maximum
Fees may be reviewed on an annual basis.
The Non-Executive Directors do not participate in any Company pension arrangements, nor do they currently
receive any benefits.
Non-Executive Directors may be reimbursed for business expenses (and any associated tax liabilities) incurred
when travelling in performance of duties.
There is no prescribed maximum annual increase. The Board is guided by the general increase in the non-
executive director market and for the broader employee population but on occasions may need to recognise, for
example, an increase in the scale, scope or responsibility of the role.
Current fee levels are set out on page 97 and will not exceed the aggregate maximum levels set out in the
Company’s Articles of Association.
Performance targets
Not applicable.
Non-Executive Directors do not participate in variable pay arrangements.
Notes
(1) Differences from remuneration policy for other employees. The remuneration policy framework for other employees is based on broadly consistent principles as described
above. All executives and senior managers are generally eligible to participate in an annual bonus plan, based on consistent performance measures and targets.
Participation in the LTIP, or in other share-based plans, is extended to executives and certain senior managers, with LTIP performance conditions consistent across all
levels. Individual salary levels and percentage levels of awards in the annual bonus and LTIP vary according to employees’ level of responsibility. All UK-based employees are
eligible to participate in the Company’s HMRC approved Sharesave plan on similar terms.
(2) Awards under any of the Company’s share plans referred to in this Report may:
a) be granted as conditional share awards or nil-cost options or in such other form that the Committee determines has the same economic effect;
b)
incorporate the right to receive an amount (in cash or additional shares) equal to the value of dividends which would have been paid on the shares under an award that
vest up to the time of vesting (or where the award is subject to a holding period, release). This amount may be calculated assuming that the dividends have been
reinvested in the Company’s shares on a cumulative basis;
c) be settled in cash at the Committee’s discretion; and
d) be adjusted in the event of any variation of the Company’s share capital or any demerger, delisting, special dividend or other event that may affect the Company’s
share price.
(3) The choice of the performance measures applicable to the annual bonus reflects the Committee’s belief that any incentive compensation should be appropriately
challenging and aligned to the Group’s financial and strategic objectives, and the creation of shareholder value. The adjusted earnings per share, revenue, and comparative
total shareholder return performance conditions applicable to the LTIP were selected by the Committee on the basis that they reward the delivery of long-term growth and
align with the Company’s strategic objectives and the creation of shareholder value.
(4) Clawback provisions exist on all variable components of the package. The Committee has discretion to reduce the vesting of a DBP or LTIP award prior to vesting and / or
require the participant to return the value of the cash bonus, DBP or LTIP award which has been received (within the timescales shown in the table) in certain
circumstances. These circumstances include, in summary: a material misstatement of financial results; an error in the assessment of a performance condition; a significant
breach of regulatory obligations, gross misconduct justifying summary dismissal, corporate failure, or acting in a manner which has caused serious reputational damage to
the Company.
(5) The Committee reserves the right to make any remuneration payments and payments for loss of office (including exercising any discretions available to it in connection
with such payments) notwithstanding that they are not in line with the policy set out above where the terms of the payment were agreed (i) before 23 April 2014 (the date
the Company’s first directors’ remuneration policy approved by shareholders in accordance with section 439A of the Companies Act came into effect); (ii) before the policy
set out above came into effect provided that the terms of the payment were consistent with the shareholder-approved directors’ remuneration policy in force at the time
they were agreed or (iii) at a time when the relevant individual was not a Director of the Company or other person to whom this policy applies and, in the opinion of the
Committee, the payment was not in consideration for the individual becoming a Director of the Company or other such person. For these purposes “payments” includes
the Committee satisfying awards of variable remuneration and, in relation to an award over shares, the terms of the payment are “agreed” at the time the award is granted.
(6) The Committee may make minor amendments to the policy (for regulatory, exchange control, tax or administrative purposes or to take account of a change in legislation)
without obtaining shareholder approval.
(7) References in this Policy to Executive Directors includes any other individual who is required to be treated as an Executive Director under the applicable regulations.
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Illustrations of application of Remuneration Policy
The chart below illustrates how the composition of the Executive Directors’ remuneration packages varies at different levels of performance
under the annual remuneration framework in the 2020 Policy, both as a percentage of total remuneration opportunity and as a total value.
)
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3,500
3,000
2,500
2,000
1,500
1,000
500
0
£3,010k
49%
£2,518k
39%
33%
28%
£1,604k
31%
26%
£691k
(cid:37)ase salary, bene(cid:564)ts and pension
Annual bonus
LTIP
£1,874k
47%
£1,583k
37%
33%
28%
£1,031k
28%
25%
£478k
100%
43%
27%
23%
100%
46%
30%
26%
Minimum
Mid
Maximum
Max
(+50% increase
in Share Price)
Minimum
Mid
Maximum
Max
(+50% increase
in Share Price)
C(cid:75)(cid:76)e(cid:73) (cid:40)xecut(cid:76)(cid:89)e (cid:50)(cid:605)cer
C(cid:75)(cid:76)e(cid:73) (cid:41)(cid:76)nanc(cid:76)al (cid:50)(cid:605)cer
Notes
(1) Minimum includes the value of fixed pay components – annual base salary effective in 2020, pension (20% of 2019 base salary), and benefits (based on 2019 actual).
(2) Mid includes fixed pay, and annual bonus and LTIP with an assumed pay-out of 50% of maximum.
(3) Maximum includes fixed pay and maximum annual bonus (CEO: 150% of salary, CFO 135% of salary) and LTIP awards (CEO: 175% of salary, CFO: 150% of salary).
(4) As announced on 19 February 2019, Mark Lewis has indicated to the Board that he wishes to step down as CEO. No departure date for this has been agreed, the numbers
referenced above are on the basis of continuing employment.
In accordance with the reporting regulations, no share price appreciation or depreciation has been assumed in calculating the values shown in
the chart above. However, as LTIP awards are granted in shares, the value of the award can vary significantly depending on movements in the
share price over the relevant vesting and holding period (as well as on the vesting outcome determined by performance). For example, if the
share price increased by 50% over the relevant vesting and holding period, the maximum values shown in the charts above would increase to
£3.01 million for the CEO and £1.87 million for the CFO. Similarly, if the share price was to fall by 50%, the maximum values shown in the
charts above would reduce to £2.03 million for the CEO and £1.29 million for the CFO.
Service agreements for Executive Directors
The service agreements of the Executive Directors are not fixed term and are terminable by either the Company or the Director on twelve
months’ notice and make provision, at the Board’s discretion, for early termination by way of payment of salary, benefits and pension in lieu
of 12 months’ notice. Under these service agreements, the Committee has discretion to make such payments on a phased basis, subject
to mitigation.
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Moneysupermarket.com Group PLC Annual Report and Accounts 2019
93
Governance
Directors’ Remuneration Report continued
Approach to leavers
In calculating the amount payable to a Director on termination of employment, the Committee would consider the circumstances on a
case-by-case basis, taking into account the relevant contractual terms, the circumstances of the termination, any applicable duty to mitigate
and the commercial interests of the Company. The treatment of any share awards held by an Executive Director under the Company’s share
plans will be determined based on the relevant plan rules. The following table summarises the leaver provisions under each incentive plan.
Plan
Summary of leaver provisions
Annual bonus
Annual bonus may be payable with respect to performance in the financial year of cessation (pro-rated for time, unless the
Committee determines otherwise). The Committee retains discretion to deliver any such bonus solely in cash and to pay it at
the normal date.
DBP
LTIP
Awards will continue to vest on the original vesting date, subject to the clawback provisions (unless the individual is
summarily dismissed in which case DBP awards will lapse).
The default treatment is that any unvested awards lapse on cessation of employment.
However, in certain circumstances, such as death, ill health, injury, disability, the sale of the participant’s employing company
out of the Group, or in any other circumstances at the discretion of the Committee, ‘good leaver’ status may be applied. For
good leavers, awards will vest on their normal vesting date, to the extent the Committee determines taking into account the
satisfaction of the relevant performance conditions and, unless the Committee determines otherwise, the proportion of the
performance period served.
For LTIP awards which have vested but not yet been released, the vested awards will continue and be released on the
original release date.
For both DBP and LTIP, the Committee retains discretion to vest / release awards before the end of the original vesting / performance period where appropriate (e.g. in
circumstances of death).
On a change of control of the Company, awards under the DBP would vest. Awards under the LTIP would normally vest, taking into account
the extent to which any performance conditions have been satisfied at that time and, unless the Committee determines otherwise, the
proportion of the performance period which has elapsed.
The Committee reserves the right to make any other payments in connection with a Directors’ cessation of office or employment where such
payments are made in good faith in discharge of an existing legal obligation (or by way of damages for breach of such an obligation) or by way
of settlement or compromise of any claim arising in connection with the termination of a Director’s office or employment. Any such payments
may include but are not limited to paying any fees for outplacement assistance and for the Directors’ legal and/or professional advice fees in
connection with his cessation of office or employment. Incidental expenses may also be payable where appropriate.
Approach to recruitment and promotions
The remuneration package for a new Executive Director, including the maximum level of variable remuneration, would be set in accordance
with the terms of the Company’s Remuneration Policy Table above. Salaries would be set at an appropriately competitive level to reflect the
skills and experience of the individual.
The maximum pension contribution (or salary supplement) for any newly appointed Executive Director would be in line with that receivable by
the majority of the wider workforce (currently 5% of salary).
Where an individual forfeits remuneration with a previous employer as a result of appointment to the Company, the Committee may offer
compensatory payments or awards to facilitate recruitment. Any such payments or awards would be in such form as the Committee considers
appropriate to be in the best interests of the Company and would, where appropriate, reflect the nature, time horizons and performance
requirements attaching to that remuneration. There is no limit on the value of such compensatory awards, but the Committee’s intention is
that broadly the value awarded would be no higher than the value forfeited.
For an internal Executive Director appointment, any variable pay element awarded in respect of the prior role may be allowed to pay out
according to its terms. In addition, any other ongoing remuneration obligations existing prior to appointment may continue.
For external and internal appointments, the Committee may agree that the Company will meet certain relocation and/or incidental expenses
as appropriate.
Other appointments
The Executive Directors may accept outside appointments, with prior Board approval, provided these opportunities do not negatively impact
on the individual’s ability to perform his duties at the Company. Whether any related fees are retained by the individual or are remitted to the
Company will be considered on a case by case basis.
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Non-Executive Directors
Non-Executive Directors are appointed under arrangements that may generally be terminated by either the Company or the Director on up to
three months’ notice and their appointment is reviewed annually. The remuneration package for a newly appointed Non-Executive Director
would normally be in line with the structure set out in the Remuneration Policy Table.
Consideration of shareholder views
The Committee undertook an engagement with major shareholders in respect of the changes to the Remuneration Policy and the feedback
received was taken into account in finalising the proposals. During each year, the Committee considers shareholder feedback received in
relation to the Annual General Meeting, plus any additional feedback received during any meetings from time to time. The Committee also
regularly reviews the policy in the context of published shareholder guidelines.
Consideration of employment conditions elsewhere in the Group
The Committee does not formally consult employees in relation to the Remuneration Policy for Executive Directors. However, the Company
regularly carries out engagement surveys which enable employees to share their views with management. To the extent that employees are
shareholders, they can vote on Directors’ remuneration at the Annual General Meeting.
Annual Report on Remuneration
Implementation of the Remuneration Policy for the year ending 31 December 2020
A summary of how the Directors’ Remuneration Policy will be applied during the year ending 31 December 2020 is set out below. As
announced on 19 February 2019, Mark Lewis has indicated to the Board that he wishes to step down as CEO. No date for this has been
agreed, the numbers referenced within the Annual Report on Remuneration are on the basis of continuing employment.
Base salary
The Remuneration Committee has determined base salary increases for the Executive Directors as set out below with effect from
1 January 2020.
Mark Lewis
Scilla Grimble
2020
£
2019
£
%
increase
562,400
387,600
551,400
380,000
2
2
The Group’s employees are, in general, receiving salary increases averaging approximately 2%.
Pension arrangements
The Company will continue to provide pension contributions (or salary supplements) at the current monetary value for incumbent Executive
Directors. Any new executive director appointment will be eligible to received pension contributions (or a cash allowance in lieu) at a maximum
rate which is aligned to that received by the wider workforce (currently 5% of salary).
The Committee acknowledges the changing context on incumbent pensions and that some shareholders would like to see us provide an
overview of our plans to reduce these over time. It was the Committee’s view that the current offering of 20% of salary for incumbent Executive
Directors is not only a contractual entitlement but an important consideration for retention of leadership of the business and remains
appropriate in the context of an overall measured and balanced package that is strongly aligned with shareholder interests.
However, having given this significant consideration, the Committee decided to cap incumbent pension contributions at their current 2019
monetary value (CEO: £110,280 and CFO: £76,000). These will not increase in quantum with any future salary increases and hence will result in
a decrease over time in pension contributions as a percentage of salary.
Annual bonus
For the year ending 31 December 2020, the maximum annual bonus opportunities will be in line with the Policy, as shown in the following
table:
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135%
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95
Governance
Directors’ Remuneration Report continued
Annual bonus continued
Awards will be determined based on a balanced combination of Group financial and operational performance and individual performance,
directly aligned to our KPIs and strategic objectives, as shown below. For 2020, the Board will continue to focus on adjusted EBITDA and
revenue growth as key financial metrics for our strategic delivery. We are retaining the Group-wide customer satisfaction measure (Net
Promoter Score) which aligns to the Group’s strategic objectives and the Group’s KPI reporting (see page 5) and a final component based on
personal objectives, which includes objectives related to the delivery of a number of key priorities. The weightings for the various metrics are
set out below:
Metric
Adjusted EBITDA
Revenue growth
Net Promoter Score
Personal objectives
Weighting
(% of bonus)
50%
20%
10%
20%
Maximum bonus will only be payable when performance has significantly exceeded expectations. The Committee believes that the underlying
targets are commercially sensitive and cannot be disclosed at this stage. To the extent that they are no longer commercially sensitive, they will
be disclosed in next year’s Report.
In line with the Remuneration Policy, one third of any bonus earned will be deferred into Moneysupermarket.com Group PLC shares for a
period of two years.
Long-term incentives
For the year ending 31 December 2020, annual LTIP awards will be in line with the Policy, as shown in the following table:
Mark Lewis
Scilla Grimble
The extent to which 2020 LTIP awards will vest will be dependent on three independent performance conditions as follows:
% of salary
175%
150%
Metric
Vesting (% of maximum)
Weighting
(% of award)
Performance condition
Compound annual growth in adjusted
earnings per share (EPS)
Compound annual growth in Group
Revenue
50%
30%
Comparative total shareholder return
20%
Compound annual growth in adjusted earnings per share over
the three-year performance period.
Compound annual growth in Group Revenue over the
three-year performance period.
Threshold
Maximum
20%
5%
4%
100%
15%
9%
Comparative total shareholder return against the constituents
of the FTSE 250 Index (excluding Investment Trusts).
Median
Upper
quartile
Three-month averaging is applied at the start and end of the
performance period.
Vesting is on a straight-line basis between threshold and maximum.
The key proposed change from awards in prior years is the introduction of Revenue growth as a third performance measure, alongside EPS
and TSR. The Committee believes this increased focus on Revenue better aligns with our Reinvent strategy objective of reaccelerating core
growth and unlocking new market growth.
The Committee continues to set stretching targets. In particular, EPS and revenue targets were set with direct reference to stretching internal
business plans and consistent with external expectations that forecasted performance results in vesting in the middle or lower half of the
vesting schedule.
Upon vesting, the 2020 LTIP awards will be subject to an additional holding period which expires on the fifth anniversary of the date of grant.
Employee Engagement
In 2019, the Group did not engage directly with employees to explain how executive remuneration aligns with wider company pay policy.
However, the Remuneration Committee reviews workforce remuneration and related policies and the alignment of incentives and rewards
with culture, taking these into account when setting the policy for executive director remuneration. The Group intends to schedule an
employee engagement session in 2020 to discuss how executive remuneration aligns with the wider workforce’s pay.
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Moneysupermarket.com Group PLC Annual Report and Accounts 2019
Non-Executive Directors
The fees for the Non-Executive Directors with effect from 1 January 2020 are:
Chair
Base fee
Additional fees:
Senior Independent Director
Committee Chair fee
Committee membership fee per Committee
Employee Champion fee
2020
£
2019
£
%
increase
251,000
60,800
246,800
60,800
15,000
11,000
1,500
7,500
15,000
10,000
1,500
N/A
2
0
0
10
0
N/A
Remuneration received by Directors for the year ended 31 December 2019 (audited)
Directors’ remuneration for the year ended 31 December 2019 was as follows:
Mark Lewis
2019
2018
Salary/fees
(£)
Taxable bens
(£)
Pension
(£)
Bonus
(£)
Vesting LTIPs
(£)
Other
Remuneration
(£)
Total
(£)
551,400
540,600
16,859
16,717
110,280
108,120
461,430
491,405
104,257
–
–
–
1,244,266
1,156,842
Scilla Grimble (appointed 4 February 2019)
2019
2018
346,750
–
12,815
–
69,667
–
260,461
–
Robin Freestone
2019
2018
Bruce Carnegie-Brown (stepped down 9 May 2019)
2019
2018
Andrew Fisher
2019
2018
Sally James
2019
2018
Caroline Britton (appointed 1 September 2019)
2018
2017
Genevieve Shore (stepped down 31 July 2019)
2019
2018
Sarah Warby (appointed 1 June 2018)
2019
2018
Total
2019
2018
184,771
75,300
88,526
246,800
73,800
73,800
90,300
90,300
24,600
–
38,967
66,800
74,300
38,967
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
480,632
–
1,170,325
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
184,771
75,300
88,526
246,800
73,800
73,800
90,300
90,300
24,600
–
38,967
66,800
74,300
38,967
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1,473,414
1,132,567
29,674
29,532
179,947
108,120
721,891
491,405
104,257
–
480,632
–
2,989,815
1,748,809
Notes
(1) Taxable benefits
Benefits for the Executive Directors incorporate all benefits and expense allowances arising from employment and relate to the provision of a car allowance and health
insurance.
(2) Pension
Pension payments reflect defined contributions and/or salary supplement arrangements. The Company provided pension contributions for two Executive Directors during
2019.
(3) Annual bonus payments
The amounts shown in the single figure table represent the full value of the annual bonus earned in respect of the year.
Moneysupermarket.com Group PLC Annual Report and Accounts 2019
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Governance
Directors’ Remuneration Report continued
Remuneration received by Directors for the year ended 31 December 2019 (audited) continued
Maximum bonus entitlements for the year ended 31 December 2019 as a percentage of base salary were 150% for Mark Lewis and 135%
for Scilla Grimble for the achievement of stretching targets for growth in revenue, adjusted EBITDA and customer satisfaction (YouGov
Brand Index) as well as specific personal objectives. For Scilla Grimble, the maximum bonus opportunity was adjusted pro rata for time
served in the year.
The performance targets, weightings, and actual performance against those targets, are set out below:
Performance targets
Mark Lewis
Scilla Grimble
Group Revenue
Group adjusted
EBITDA
Threshold
Target
Maximum
Actual
Threshold
Target
Maximum
Actual
Customer Satisfaction Threshold
(YouGov Brand Index)
Target
Maximum
Actual
£372m
£387m
£402m
£388m
£138m
£143m
£149m
£141.5m
74
75
76
74.2
Personal
Total
The personal targets were set individually for each
Executive Director based on the key objectives for the year
in their area of responsibility – see below
* Maximum available after pro-rata adjustment for time in role
Weighting (% of salary)
30%
27%*
Payout (% of salary)
Weighting (% of salary)
Payout (% of salary)
Weighting (% of salary)
Payout (% of salary)
Weighting (% of salary)
Payout (% of salary)
Payout (% of maximum)
Payout (% of salary)
21%
75%
39%
22.5%
6%
22.5%
18%
55.8%
84%
19%
67.5%*
35%
20.25%*
5.4%
20.25%*
16%
55.6%*
75.4%
In accordance with the Remuneration Policy, to ensure fair and consistent performance measurement, the Group financial performance
targets may be adjusted to reflect exceptional one-off and unanticipated items, including acquisitions and disposals, which do not reflect
underlying business performance.
The personal targets were set individually for each Executive Director based on the key areas of strategic focus for the year in their area of
responsibility together with a component based on Diversity and Inclusion, reflecting our focus in this area, as explained further in the
Nomination Committee Report. The Committee assessed the personal targets and determined that they should pay out as set out in the table
above. Detail on the underlying targets is commercially sensitive and cannot be disclosed, however, the following tables highlight key objectives
and achievements for the personal targets of each Director:
Mark Lewis
Objective
Maximum opportunity
(% of salary)
Performance outcome and key achievements
Strategic: Scale revenue contribution from
innovations and corporate development activity
9.0%
Strategic: Deliver increased personalisation to
the MoneySuperMarket customer experience
Operational: Ensure momentum in the Group’s
Inclusion and Innovation agenda is maintained
9.0%
4.5%
22.5%
• Delivered Credit Monitor tool, fully integrated Decision Tech into the
Group and partnerships established with CYTI and Podium during
the year.
• New brand relaunch delivered across all platforms. Successful
launch of Credit and Energy monitor.
• Strong delivery of D&I initiatives and embedded into key employee
processes (recruitment, internal promotions). Achievements
recognised through employee engagement survey and a number of
external awards.
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Moneysupermarket.com Group PLC Annual Report and Accounts 2019
Scilla Grimble
Objective
Strategic: Rapid induction into CFO role
establishing positive Investor Relations,
overseeing group Risk & Regulation and Capital
Allocation.
Maximum opportunity
(% of salary)
Performance outcome and key achievements
8.1%
• Strong introduction to the business overseeing a return to profit
growth and overseeing all aspects of the CFO role.
Operational: Deliver 2019 budget with focus on
maintaining cost discipline across the Group.
8.1%
• Oversaw successful budget and forecasting processes to deliver
outcomes while allocating resources to investment areas.
Operational: Develop the Group’s D&I agenda
through further understanding of the key
drivers impacting the Group’s gender pay gap.
4.05%
• Analysis undertaken and key drivers identified to work towards
reducing our gap further.
20.25%
(4) Vesting of LTIP awards
The LTIP award granted on 4 May 2017 was based on performance to the year ended 31 December 2019. The performance targets for this
award, and actual performance against those targets, was as follows:
Metric
Vesting
Compound annual
growth in adjusted
earnings per share
Comparative total
shareholder return
Weighting
Performance condition
Threshold
Maximum
Actual
Vesting %
80%
20%
Compound annual growth in adjusted earnings
per share from 31 December 2016 to 31 December
2019.
Comparative total shareholder return against the
constituents of the FTSE 250 index (excluding
Investment Trusts) from 31 December 2016 to
31 December 2019. Comparative total shareholder
return measured over 3 financial years with a
3-month average at the start and end of the
performance period.
20%
7%
100%
17%
5.05%
–
Median
Upper
quartile
Above
median
9.6
Vesting is determined on a straight-line basis between threshold and maximum.
In accordance with the Remuneration Policy, to ensure fair and consistent performance measurement over the period, EPS may be further
adjusted to reflect exceptional one-off and unanticipated items which do not reflect underlying business performance.
The value attributed to vested shares under long-term incentives in the remuneration table for 2019 includes amounts relating to dividend
equivalents payable on vested LTIP awards over the 3-year period.
(5) Other remuneration
Of the share options included in the table above, £336,442, 69%, is compulsory deferred in shares across the next 3 years and is subject to
forfeiture. The value for the deferred shares was determined using the fair value at grant date (£2.92).
Total vesting
9.6%
Long-term incentives granted during the year (audited)
During the year, the following share awards were made to the Executive Directors
Executive Director
Type of award
Basis of award granted
Face value of
award
£
% of maximum that
would vest at threshold
performance
Vesting determined by performance over
Mark Lewis
Scilla Grimble
Scilla Grimble
2019 LTIP
2019 LTIP
Buy-out award
175% of salary
150% of salary
Buy-out of forfeited awards
964,951
570,000
480,632
20%
20%
N/A
three financial years to
31 December 2021
Vesting dates as shown in footnote 3
(1) Face value for the LTIP awards was determined using the average share price over the preceding 5 trading days prior to the date of grant (28 March 2019) of £3.6222.
(2) Face value for the buy-out awards was determined using the average share price over the preceding 5 trading days prior to the date of grant (14 February 2019) of £3.331.
(3) This award was made in connection with Scilla Grimble’s recruitment to the Company to take account of compensation relinquished from her previous employer as a result
of commencing employment with the Company. The award was made in line with the requirements of the Remuneration Policy. The total award was over 164,600 shares,
and was subject to a vesting timeline (in line with the forfeited remuneration) as follows: 50,791 on 22 June 2019; 41,252 on 19 March 2020; 31,704 on 23 June 2020;
18,675 on 14 August 2020; 22,178 on 19 March 2021
Moneysupermarket.com Group PLC Annual Report and Accounts 2019
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Governance
Directors’ Remuneration Report continued
Long-term incentives granted during the year (audited) continued
The performance targets for the 2019 LTIP awards are as follows:
Metric
Weighting
(% of award)
Performance condition
Vesting (% of maximum)
Compound annual growth in
adjusted earnings per share
Comparative total shareholder
return
80%
20%
Compound annual growth in adjusted earnings per share over the
three-year performance period.
Comparative total shareholder return against the constituents of the
FTSE 250 Index (excluding Investment Trusts) over the three-year
performance period. Three-month averaging is applied at the start and
end of the performance period.
Threshold
Maximum
20%
5%
100%
15%
Median
Upper
quartile
Vesting is determined on a straight-line basis between threshold and maximum.
Payments to past Directors (audited)
There were no payments to past directors during the year.
Payments for loss of office (audited)
There were no payments for loss of office during the year.
Statement of Directors’ shareholdings and share interests (audited)
Director
Mark Lewis
Scilla Grimble
Bruce Carnegie-Brown*
Andrew Fisher
Robin Freestone
Sally James
Caroline Britton
Genevieve Shore*
Sarah Warby
*shown as at date of leaving
Beneficially
owned at
31 December
2019
Outstanding
LTIP
awards Buy-out award
Outstanding
share awards
under all
employee
share plans
–
26,835
90,000
–
40,153
20,000
–
–
–
623,947
–
–
–
–
–
–
–
–
–
113,809
–
–
–
–
–
–
–
7,031
–
–
–
–
–
–
–
–
Shares owned
as a % of
base salary at
31 December
2019
0%
23%
n/a
n/a
n/a
n/a
n/a
n/a
n/a
Total
interest
in shares
630,968
113,809
90,000
–
40,153
20,000
–
–
–
Executive Directors are required to hold shares in the Company worth 200% of base salary and must retain 50% of the net of tax value of any
vested LTIP shares until the guideline is met. The shareholding value used for the purposes of the table above is based on the average share
price during December 2019 of £3.306.
In the period from 31 December 2019 to the date of this Report, there has been no change in the Directors’ interests in shares in the
Company.
Outstanding share awards
The table below sets out details of outstanding share awards held by the Executive Directors.
Executive Director Scheme
Grant date
No. of
shares at
1 January
2019
Exercise
price
Mark Lewis
LTIP
04/05/2017
Nil
305,317
Scilla Grimble
SAYE
LTIP
LTIP
LTIP
Buy-out
award
20/09/2017
05/04/2018
28/03/2019
28/03/2019
14/02/2019
£2.56
Nil
Nil
Nil
Nil
7,031
328,238
–
–
–
Granted
during
the year
–
–
–
266,399
157,363
Vested
during the
year
–
–
–
–
–
164,600
(50,791)
Lapsed
during the
year
276,007
No. of
shares at
31 December
2019
End of
performance
period
29,310
31/12/2019
Vesting/
exercise
date
04/05/2020
01/11/2020–
30/04/2021
05/04/2021
28/03/2022
–
–
–
–
–
7,031
328,238
266,399
n/a
31/12/20
31/12/21
157,363
31/12/21
28/03/2022
113,629
N/A
Various*
see note to table on page 99
*
(1) Awards of LTIPs vest by reference to an EPS performance condition (80% of the award) and a comparative TSR performance condition (20% of the award). 20% of the
maximum vests for threshold performance.
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Performance graph (unaudited)
The following graph shows the cumulative total shareholder return of the Company over the last 10 financial years relative to the FTSE 250
Index (excluding Investment Trusts). The Remuneration Committee considers the FTSE 250 Index (excluding Investment Trusts) to be an
appropriate index for total shareholder return and comparison disclosure as it represents a broad equity market index in which the Company
is a constituent member.
This graph shows the value, by 31 December 2019, of £100 invested in Moneysupermarket.com Group PLC on 31 December 2009 compared
with the value of £100 invested in the FTSE 250 Index (excluding Investment Trusts) on the same date, assuming the re-investment of
dividends. The other points plotted are the values at intervening financial year ends.
Moneysupermarket.com Group PLC
FTSE 250 Index (excluding Investment Trusts)
800
700
600
500
400
300
200
100
Dec-09
Dec-10
Dec-11
Dec-12
Dec-13
Dec-14
Dec-15
Dec-16
Dec-17
Dec-18
Dec-19
Pay ratio
The table below discloses the ratio of CEO pay for 2019, using the single total figure of remuneration (STFR) of the CEO (as disclosed on page
97 to the comparable earnings of the rest of the employees in the Group, at a number of prescribed data points (25th, 50th & 75th
percentiles).
Year
2019
2018
Method
Option A
Option A
25th percentile
(P25) pay ratio
Median (P50)
pay ratio
75th percentile
(P75) pay ratio
35:1
35:1
25:1
24:1
18:1
17:1
Notes:
The ratios are calculated using option A in the disclosure regulations. The employees at the lower quartile, median and upper quartile (P25, P50, and P75, respectively) were
determined based on total remuneration for 2019 using a valuation methodology consistent with that used for the CEO in the single figure table on page 97. This option was
selected on the basis that it provided the most accurate means of identifying the median, lower and upper quartile employees. The calculation is undertaken on a full-time
equivalent basis.
The total remuneration in respect of 2019 for the employees identified at P25, P50 and P75 is £35,444k, £49,490k, and £67,634k, respectively. The base salary in respect of
2019 for the employees identified at P25, P50 and P75 is £32,606k, £44,280k, and £65,610k, respectively.
The Committee considers pay ratios as one of many reference points when considering remuneration. Throughout the Company, pay is positioned
to be fair and market competitive in the context of the relevant talent market, fairly reflecting market data and other relevant benchmarks for the
role. The Committee notes the limited comparability of pay ratios across companies and sectors, given the diverse range of business models and
employee population profiles which exist across the market. A significant proportion (over 70%) of the CEO’s total remuneration is delivered in
variable remuneration, and particularly via long-term share awards under the DBP and LTIP. In order to drive alignment with investors, the value
ultimately received from LTIP awards is linked to stretching company performance targets and long-term share price movement. As a result, the pay
ratio is likely to be driven largely by the CEO’s LTIP outcome and may therefore fluctuate significantly on a year-to-year basis.
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101
Governance
Directors’ Remuneration Report continued
Total remuneration for Chief Executive Officer (unaudited)
The total remuneration figures for the Chief Executive Officer during each of the last 10 financial years are shown in the table below. The total
remuneration figure includes the annual bonus based on that year’s performance and LTIP awards based on three-year performance periods
ending in the relevant year. The annual bonus payout and LTIP vesting level as a percentage of the maximum opportunity are also shown for
each of these years.
Year ended
31 December
CEO
2010
Peter
Plumb
2011
Peter
Plumb
2012
Peter
Plumb
2013
Peter
Plumb
2014
Peter
Plumb
2015
Peter
Plumb
2016
Peter
Plumb
2017
Peter
Plumb
2017
Mark
Lewis
2018
Mark
Lewis
2019
Mark
Lewis
Total remuneration £868,748 £1,024,156 £2,866,123 £3,059,163 £3,365,277 £2,715,342 £2,391,627 £1,064,634 £841,030 £1,156,842 £1,244,266
Annual bonus
(% of maximum)
LTIP vesting
(% of maximum)
55.8%
77%
61%
83%
95%
60%
72%
94%
47%
85%
91%
100%
9.6%
85%
94%
98%
81%
68%
N/A
N/A
n/a
n/a
Percentage change in Chief Executive Officer’s remuneration (unaudited)
The table below shows the percentage change in the Chief Executive Officer’s salary, benefits and annual bonus between the financial year
ended 31 December 2018 and 31 December 2019, compared to that of the average percentage change for all UK employees of the Group for
each of these elements of pay.
Salary
Taxable benefits
Annual bonus
2018
CEO
£
540,600
16,717
491,405
2019
CEO
£
551,400
16,859
461,430
CEO
% change
2%
0.9%
(6.1)%
Other
employees
% change
2%
2.6%
5.5%
UK employees have been selected as the most appropriate comparator pool, given our headquarters are located in the UK.
Relative importance of spend on pay (unaudited)
The following table shows the Company’s actual spend on pay (for all employees) relative to dividends, tax and retained profits:
Staff costs (£m)
Dividends (£m)*
Tax (£m)
Retained profits (£m)
2018
53.0
59.0
20.3
86.6
2019
61.8
62.9
21.1
94.9
change %
17%
7%
4%
10%
* 2019 includes a proposed final dividend of 8.61p per share. 2018 includes the final dividend of 8.10p per share. The dividend figures relate to amounts payable in respect
of the relevant financial year.
Consideration by the Directors of matters relating to Directors’ remuneration
The Remuneration Committee comprises four Independent Non-Executive Directors: Andrew Fisher (Chair), Sally James, Caroline Britton and
Sarah Warby. Biographies of the members of the Remuneration Committee are set out on pages 64 and 65. Robin Freestone stepped down
as a Committee member upon his appointment as Chair of the Board on 9 May 2019. Genevieve Shore also served on the Committee during
the year until she stepped down from the Board on 31 July 2019.
At the invitation of the Chair of the Remuneration Committee, the Chair of the Board, the Chief Executive Officer, the Chief People Officer and
the Company Secretary may attend meetings of the Remuneration Committee, except when their own remuneration is under consideration.
No Director is involved in determining his or her own remuneration. The Company Secretary acts as secretary to the Remuneration
Committee. The members of the Remuneration Committee can, where they judge it necessary to discharge their responsibilities, obtain
independent professional advice at the Company’s expense.
The Remuneration Committee’s duties include:
• determining the policy for the remuneration of the Chair, Executive Directors and executive management;
• determining the remuneration package of the Chair, Executive Directors and executive management, including, where appropriate,
bonuses, incentive payments and pension arrangements within the terms of the agreed framework and policy; and
• determining awards under the Company’s long-term incentive schemes.
The Remuneration Committee’s duties are set out in further detail in the terms of reference which are published on the investor relations
section of the Group’s website at http://corporate.moneysupermarket.com and are available in hard copy form on application to the Company
Secretary.
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Moneysupermarket.com Group PLC Annual Report and Accounts 2019
Consideration by the Directors of matters relating to Directors’ remuneration
During 2019, the Remuneration Committee and the Company received advice from Deloitte LLP, who are independent remuneration
consultants, in connection with remuneration matters including the Group’s performance related remuneration policy. Deloitte LLP is a
member of the Remuneration Consultants Group and is committed to that group’s voluntary code of practice for remuneration consultants in
the UK. Deloitte LLP has no other connection or relationship with the Group. During 2019, Deloitte LLP also provided services to the Group in
respect of corporate tax and VAT advice and risk advisory work. The fees paid to Deloitte LLP for providing advice in relation to executive
remuneration over the financial year under review was £31,150.
Outside appointments
Executive Directors are permitted to accept outside appointments on external boards so long as these are not deemed to interfere with the
business of the Group. During 2019, none of the Executive Directors were appointed on an external Board.
Remuneration Committee effectiveness
In 2019 we carried out an internal evaluation of Remuneration Committee effectiveness which involved the completion of a questionnaire, with
the results being analysed and presented at a Committee meeting for discussion. The Committee was considered to be effective in fulfilling its
role during 2019 and remains independent. We also reviewed progress against actions identified in the 2018 evaluation:
2018 evaluation actions update
The following actions were identified during the 2018 evaluation:
• ensuring processes and procedures are put in place to meet the requirements of the new UK Corporate Governance Code – the terms of
reference of the Committee were updated in accordance with the revised Code; and
• ensuring the Committee continues to be appraised of developments in shareholder expectations on remuneration, particularly in relation
to the requirements of the new UK Corporate Governance Code – updates were received from the Company Secretary and the Company’s
remuneration consultants during the year.
2019 evaluation updates
Some of the areas that will be actioned in 2020 include:
• ensuring the Committee receives independent and appropriate advice from its third-party advisers, and
• ensuring that remuneration continues to be aligned to the Company’s purpose and values.
Statement of voting at general meeting
The following votes were received from shareholders in respect of the Directors’ Remuneration Report at last year’s Annual General Meeting
and in respect of the Remuneration Policy at the 2017 Annual General Meeting:
Remuneration Report
(2018 AGM)
Remuneration Policy
(2017 AGM)
Votes
%
Votes
395,958,142
4,357,407
400,315,549
3,204
98.91%
1.09%
100%
410,221,055
4,869,995
415,091,050
9,483
%
98.83%
1.17%
100%
Votes cast in favour*
Votes cast against
Total votes cast
Abstentions
*
Includes Chair’s discretionary votes.
This report was approved by the Board and signed on its behalf by:
Andrew Fisher
Chair of the Remuneration Committee
19 February 2020
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Moneysupermarket.com Group PLC Annual Report and Accounts 2019
103
104Moneysupermarket.com Group PLC Annual Report and Accounts 2019GovernanceThe Directors’ Report sets out additional statutory informationAnnual General MeetingThe Annual General Meeting (‘AGM’) of Moneysupermarket.com Group PLC (the ‘Company’) will be held at No. 1 Spinningfields, Hardman Street, Manchester M3 3EB on Thursday 7 May 2020 at 10.00am. The notice convening the meeting, with details of the business to be transacted at the meeting and explanatory notes is set out in a separate AGM circular which has been issued to all shareholders at the same time as this Report.DividendThe Directors recommend a final dividend of 8.61p (2018: 8.10p) per ordinary share in respect of the year ended 31 December 2019. If approved by shareholders at the forthcoming AGM, this will be paid on 14 May 2020 to shareholders on the register at close of business on 3 April 2020. Following the Company’s announcement on 14 February 2019 of a proposed £40m enhanced distribution and the related shareholder consultation, the Company announced on 18 April 2019 that this would be made by way of a special dividend. The special dividend of 7.46 pence per share was paid on 21 May 2019. The final dividend and the interim dividend of 3.10p per ordinary share paid in September 2019, gives a total dividend for the year of 11.71p (2018: 11.05p) per ordinary share (excluding the special dividend).Issued share capital and controlAs at 31 December 2019, the issued share capital of the Company was £107,315 comprising 536,576,579 ordinary shares of 0.02p each. Full details of the share capital of the Company and changes to share capital during the year are set out in note 19 to the Group Financial Statements on page 141. The information in note 19 is incorporated by reference and forms part of this Directors’ Report.At the 2019 AGM, shareholders authorised the Directors to allot up to 357,000,000 ordinary shares in the capital of the Company. Directors will again seek authority from shareholders at the forthcoming AGM to allot up to 357,385,000 ordinary shares.Holders of ordinary shares are entitled to receive dividends when declared, to receive the Company’s Annual Report, to attend and speak at general meetings of the Company, to appoint proxies and to exercise voting rights.On a show of hands at a general meeting of the Company, every holder of ordinary shares present in person or by proxy, and entitled to vote, has one vote and, on a poll, every holder of ordinary shares present in person or by proxy, and entitled to vote, has one vote for every ordinary share held. Electronic and paper proxy appointments and voting instructions must be received not later than 48 hours before the meeting. A holder of ordinary shares can lose the entitlement to vote and the right to receive dividends where that holder fails to comply with a disclosure notice issued under section 793 of the Companies Act 2006. There are no issued shares in the Company with special rights with regard to control of the Company.The Company operates a Share Incentive Plan which entitles all employees to purchase ordinary shares in the Company using money deducted from their pre-tax salary. Plan shares are held in trust for participants by Link Market Services Trustees Limited (‘Trustee’).Voting rights are exercised by the Trustee in accordance with participants’ instructions. If a participant does not submit an instruction to the Trustee, no vote is registered. In addition, the Trustee does not vote on any unawarded or forfeit shares held under the Plan as surplus assets. As at the date of this report, the Trustee held 0.06% of the issued ordinary share capital in the Company.The Company operates a Long Term Incentive Plan (‘Plan’) and shares are held by the trustees, Estera Trust (Jersey) Limited (‘Estera’), pending vesting of the shares awarded under the Plan. Estera does not vote on any shares held in trust. As at the date of this Report, Estera held 0.06% of the issued ordinary share capital in the CompanyKatherine BellauCompany SecretaryDirectors’ Report Full details of the rights and obligations attaching to the Company’s share capital are contained in the Articles of Association. The Articles of
Association may only be amended by a special resolution at a general meeting of shareholders. No amendments are proposed to be made to
the existing Articles of Association at the forthcoming AGM.
All of the Company’s share schemes contain provisions relating to a change of control. Outstanding options and awards normally vest and
become exercisable on a change of control subject to satisfaction of any performance conditions at that time. Save in respect of provisions
of the Company’s share schemes, there are no agreements between the Company and its Directors or employees providing compensation
for loss of office or employment (whether through resignation, purported redundancy or otherwise) that occurs because of a takeover bid.
The Company has entered into one significant agreement which would be terminable upon a change of control; the credit facility agreement
entered into with Barclays Bank PLC and Lloyds Bank PLC in September 2018.
Restrictions on the transfer of securities
Whilst the Board has the power under the Articles of Association to refuse to register a transfer of shares, there are no restrictions on the
transfer of shares other than:
•
• pursuant to the Listing Rules of the Financial Conduct Authority whereby certain Directors, officers and employees of the Group require
certain restrictions may from time to time be imposed by laws and regulations (for example, insider trading laws); and
the approval of the Company to deal in ordinary shares of the Company.
The Company is not aware of any agreements between shareholders that may result in restrictions on the transfer of securities
and/or voting rights.
Authority to purchase own shares
The Company was authorised at the 2019 AGM to purchase up to 53,600,000 of its own shares in the market. No shares were purchased
under this authority in 2019. Directors will seek authority from shareholders at the forthcoming AGM for the Company to purchase, in the
market, up to 53,600,000 shares. The Directors have no present intention of conducting purchases of the Company’s shares, but consider it
prudent to obtain the flexibility this authority provides. The Directors will only use this power after careful consideration, taking into account
the financial resources of the Company, the Company’s share price and future funding opportunities. The Directors will only purchase such
shares after taking into account the effects on earnings per share and the interests of shareholders generally.
Substantial shareholders
As at 31 December 2019, the Company had been notified of the following holdings of voting rights in its shares under Rule 5 of The Disclosure
Guidance and Transparency Rules of the Financial Conduct Authority:
Shareholder
Massachusetts Financial Services Company
Prudential plc group of companies
Ameriprise Financial, Inc and its group
Aviva plc
Standard Life Investments (Holdings) Limited
FIL Limited
Blackrock, Inc
State Street Nominees Limited
No. of
ordinary
shares/voting
rights notified
30,527,976
27,199,962
27,061,089
26,570,896
25,417,919
24,758,460
21,633,123
20,581,165
Percentage of
ordinary
share
capital/voting
rights notified
5.69
5.07
5.04
4.95
4.74
4.61
4.03
3.84
As at 19 February 2020, the Company had not received any further notifications of holdings of voting rights.
Directors
The Directors who served during the financial year were as follows:
Director
Robin Freestone
Caroline Britton
Andrew Fisher
Scilla Grimble
Bruce Carnegie-Brown
Sally James
Mark Lewis
Genevieve Shore
Sarah Warby
Position
Service in the year ended 31 December 2019
Chair
Independent Non-Executive Director
Independent Non-Executive Director
Chief Financial Officer
Chair
Senior Independent Non-Executive Director
Chief Executive Officer
Independent Non-Executive Director
Independent Non-Executive Director
Served throughout year
Appointed 20 September 2019
Served throughout year
Appointed 4 February 2019
Resigned 9 May 2019
Served throughout year
Served throughout year
Resigned 31 July 2019
Served throughout year
Their biographical details are set out on pages 64 to 65. Further details relating to Board and Committee composition are disclosed in the
Corporate Governance Report and Committee Reports on pages 66 to 103.
Moneysupermarket.com Group PLC Annual Report and Accounts 2019
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Governance
Directors’ Report continued
The Articles of Association provide that a Director may be appointed by an ordinary resolution of shareholders or by the existing Directors,
either to fill a vacancy or as an additional Director. All Directors, other than Andrew Fisher, will retire and offer themselves for election or
re-election at the 2020 AGM in accordance with the 2018 UK Corporate Governance Code. Andrew Fisher will stand down as a Director
at the conclusion of the AGM.
The Executive Directors serve under rolling contracts that are terminable upon 12 months’ notice from either party. The Non-Executive
Directors serve under letters of appointment. Copies of service contracts and letters of appointment are available for inspection at the
Company’s registered office during normal business hours and will be available for inspection at the Company’s AGM.
The Directors’ Remuneration Report, which includes the Directors’ interests in the Company’s shares, is set out on pages 85 to 103. During the
year, no Director had any material interest in any contract of significance to the Group’s business.
Directors’ powers
The Board of Directors may exercise all the powers of the Company subject to the provisions of relevant legislation, the Company’s Articles of
Association and any directions given by the Company in general meeting.
Directors’ indemnities
During the financial year ended 31 December 2019 and up to the date of this Directors’ Report, the Company has maintained appropriate
liability insurance for its Directors and officers.
The Company has granted indemnities to each of its Directors and the Company Secretary to the extent permitted by law and its Articles of
Association. These indemnities were in force throughout the year ended 31 December 2019 and remain in force as at the date of this Report
in relation to certain losses and liabilities which the Directors or Company Secretary may incur in the course of acting as Directors, Company
Secretary or employees of the Company or of any associated company. In addition, the Company granted similar indemnities to senior
managers of the Group who are subject to the provisions of the Senior Managers and Certification Regime (‘SM&CR’). These indemnities were
put in place on 9 December 2019 when SM&CR became applicable to the Group.
Employees
The Group places considerable value on the involvement of its employees and uses a number of ways to engage with employees on matters
that impact them and the performance of the Group. These include formal business performance updates by members of executive
management for all employees, regular update briefings for all employees, regular team meetings, the Group’s intranet site which enables
easy access to the latest Group information as well as Group policies, and the circulation to employees of results announcements and other
corporate announcements. This also helps to achieve a common awareness amongst employees of the financial and economic factors
affecting the performance of the Group. The Board appointed Sarah Warby, one of our independent Non-Executive Directors, as our
‘Employee Champion’ in 2018 and has held Board Q&A and breakfast sessions with employees throughout the year, providing the opportunity
for employees to engage directly with our Non-Executive Directors and to give our Non-Executive Directors the opportunity to understand
more about our employees.
A robust employee engagement survey process is also in place to ensure that employees are given a voice in the organisation and that the
Group can take action based on employee feedback. All employees are able to participate in the Company’s Share Incentive Plan and Save
As You Earn Scheme which gives employees the opportunity to purchase ordinary shares in the Company. This helps to encourage employee
interest in the performance of the Group. Further information on employee engagement can be found on pages 44 to 48.
Equal opportunities
The Group is committed to providing equality of opportunity to all employees without discrimination and applies fair and equitable
employment policies which seek to promote entry into and progression within the Group. Appointments are determined solely by application
of job criteria, personal ability, behaviour and competency.
In the opinion of the Directors, all employee policies are deemed to be effective and in accordance with their intended aims.
Disabled persons
Disabled persons have equal opportunities when applying for vacancies, with due regard to their skills and abilities. Procedures ensure that
disabled employees are fairly treated in respect of training and career development. For those employees becoming disabled during the
course of their employment, the Group is supportive so as to provide an opportunity for them to remain with the Group, wherever reasonably
practicable.
Borrowings
The Group has a revolving credit facility (‘RCF’) of £100m in committed funds, which matures in September 2021, with the ability to apply for a
one to two year extension to this facility. At 31 December 2019, the Group was not utilising any of the facility. The Group also has an accordion
option to apply for up to an additional £100m of funds during the term of this RCF.
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Moneysupermarket.com Group PLC Annual Report and Accounts 2019
Political donations
During the financial year ended 31 December 2019, the Group did not make any political donations (2018: £nil).
Post balance sheet events
There have been no events that either require adjustment to the Financial Statements or are important in the understanding of the Company’s
current position.
Auditor and disclosure of information
The Directors who held office at the date of this Report confirm that, so far as they are each aware, there is no relevant audit information of
which the Company’s auditor is unaware; and each such Director has taken all the steps that he or she ought to have taken as a Director to
make himself or herself aware of any relevant audit information, and to establish that the Company’s auditor is aware of that information.
Auditor
The Board approved the Audit Committee’s recommendation to put a resolution to shareholders recommending the re-appointment of KPMG
LLP as the Company’s auditor, and KPMG LLP have indicated their willingness to accept re-appointment as auditors of the Company. The audit
partner will be rotated in April 2020 in accordance with the FRC’s Ethical Standard 3 (Revised).
The Audit Committee, in its recommendation, confirmed that (1) the recommendation was free from influence by a third party and (2) no
contractual term of the kind mentioned in Article 16(6) of the EU Regulation 537/2014 has been imposed on the Company.
A resolution proposing the re-appointment of KPMG is contained in the notice of the forthcoming AGM and will be proposed to shareholders
at that meeting.
Reporting requirements
The following sets out the location of additional information forming part of the Directors’ Report:
Reporting requirement
Location
Strategic Report – Companies Act 2006 s414A-D
Strategic Report on pages 1 to 61
DTR4.1.8R – Management Report – the Directors’ Report and
Strategic Report comprise the ‘management report’
Directors’ Report on pages 104 to 107 and the Strategic Report on pages
1 to 61
Likely future developments of the business and Group
Strategic Report on pages 1 to 61
Statement on corporate governance
Details of use of financial instruments & specific policies for
managing financial risk
Board’s assessment of the Group’s internal control systems
Corporate Governance Report, Audit Committee Report, Risk Committee
Report, Nomination Committee Report and Directors’ Remuneration
Report on pages 62 to 103
Note 20 to Group Financial Statements on pages 142 to 143
Corporate Governance Report on pages 62 to 72, the Audit Committee
Report on pages 73 to 78 and Risk Committee Report on pages 82 to 84
Greenhouse gas emissions
Sustainability and Stakeholder Engagement Report on page 53
Directors’ remuneration including disclosures required by
Schedule 5 and Schedule 8 of SI2008/410 – Large and
Medium-sized Companies and Groups (Accounts and Reports)
Regulations 2008
Directors’ Remuneration Report on pages 85 to 103
Directors’ responsibility statement
Directors’ responsibility statement on page 108
Directors’ interests
Directors’ Remuneration Report on page 100
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The Strategic Report comprising the inside cover and pages 1 to 61 and this Directors’ Report comprising pages 104 to 107 have been
approved by the Board and are signed on its behalf by:
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Katherine Bellau
Company Secretary
19 February 2020
Registered office: Moneysupermarket House, St. David’s Park, Ewloe, Chester CH5 3UZ
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Moneysupermarket.com Group PLC Annual Report and Accounts 2019
107
Governance
Directors’ responsibility statement
The Directors are responsible for preparing the Annual Report and the Group and Parent Company Financial Statements in accordance with
applicable law and regulations.
Company law requires the Directors to prepare Group and Parent Company financial statements for each financial year. Under that law they
are required to prepare the Group financial statements in accordance with International Financial Reporting Standards as adopted by the
European Union (IFRSs as adopted by the EU) and applicable law and have elected to prepare the Parent Company financial statements in
accordance with UK accounting standards, including FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland.
select suitable accounting policies and then apply them consistently;
Under company law the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the
state of affairs of the Group and Parent Company and of their profit or loss for that period. In preparing each of the Group and Parent
Company financial statements, the Directors are required to:
•
• make judgements and estimates that are reasonable, relevant, reliable and prudent;
•
•
for the Group financial statements, state whether they have been prepared in accordance with IFRSs as adopted by the EU;
for the Parent Company financial statements, state whether applicable UK accounting standards have been followed, subject to any
material departures disclosed and explained in the Parent Company financial statements;
• assess the Group and Parent Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern;
and
• use the going concern basis of accounting unless they either intend to liquidate the Group or the Parent Company or to cease operations,
or have no realistic alternative but to do so.
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Parent Company’s
transactions and disclose with reasonable accuracy at any time the financial position of the Parent Company and enable them to ensure that
its financial statements comply with the Companies Act 2006. They are responsible for such internal control as they determine is necessary to
enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error, and have general
responsibility for taking such steps as are reasonably open to them to safeguard the assets of the Group and to prevent and detect fraud and
other irregularities.
Under applicable law and regulations, the Directors are also responsible for preparing a Strategic Report, Directors’ Report, Directors’
Remuneration Report and Corporate Governance Statement that complies with that law and those regulations.
The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company’s
website. Legislation in the UK governing the preparation and dissemination of financial statements may differ from legislation in other
jurisdictions.
Each of the Directors whose names and functions are set out on pages 64 and 65 confirms that, to the best of their knowledge:
•
the Financial Statements, prepared in accordance with the applicable set of accounting 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; and
the Directors’ Report includes a fair review of the development and performance of the business and the position of the issuer and the
undertakings included in the consolidation taken as a whole, together with a description of the principal risks and uncertainties that they
face.
•
In addition, the Directors consider the Annual Report and Accounts, taken as a whole, is fair, balanced and understandable and provides the
information necessary for shareholders to assess the Group’s position and performance, business model and strategy.
Mark Lewis
Chief Executive Officer
Scilla Grimble
Chief Financial Officer
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Moneysupermarket.com Group PLC Annual Report and Accounts 2019
Financial Statements
Independent Auditor’s Report to the Members of
Moneysupermarket.com Group PLC
1. Our opinion is unmodified
We have audited the Financial Statements of Moneysupermarket.com Group PLC (‘the Company’) for the year ended 31 December 2019 which
comprise the Consolidated Statement of Comprehensive Income, Consolidated Statement of Financial Position, Consolidated Statement of
Changes in Equity, Consolidated Statement of Cash Flows and the related notes including the accounting policies in note 2, and the Company
Balance Sheet and Company Statement of Changes in Equity, and the related notes including the accounting policies in note 1.
In our opinion:
•
the Financial Statements give a true and fair view of the state of the Group’s and of the Parent Company’s affairs as at 31 December 2019
and of the Group’s profit for the year then ended;
the Group Financial Statements have been properly prepared in accordance with International Financial Reporting Standards as adopted
by the European Union;
the Parent Company Financial Statements have been properly prepared in accordance with UK accounting standards, including FRS 102
The Financial Reporting Standard applicable in the UK and Republic of Ireland; and
the Financial Statements have been prepared in accordance with the requirements of the Companies Act 2006 and, as regards the Group
Financial Statements, Article 4 of the IAS Regulation.
•
•
•
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (‘ISAs (UK)’) and applicable law. Our responsibilities are
described below. We believe that the audit evidence we have obtained is a sufficient and appropriate basis for our opinion. Our audit opinion
is consistent with our report to the Audit Committee.
We were appointed as auditor by the shareholders on 22 April 2008. The period of total uninterrupted engagement is for the thirteen financial
years ended 31 December 2019. Prior to that we were also auditor to the Group’s previous Parent Company, but which, being unlisted, was
not a public-interest entity. We have fulfilled our ethical responsibilities under, and we remain independent of the Group in accordance with,
UK ethical requirements including the FRC Ethical Standard as applied to listed public interest entities. No non-audit services prohibited by
that standard were provided.
Overview
Materiality:
Group Financial Statements as a whole
Coverage
Key audit matters
Recurring risks
£5.4m (2018: £5.0m)
4.7% (2018: 4.7%) of Group profit before tax
100% (2018: 100%) of Group profit before tax
vs 2018
Revenue recognition:
Revenue accrual
Capitalisation of software and development costs
Recoverability of Parent Company’s investment in
subsidiary and debt due from group entities
2. Key audit matters: our assessment of risks of material misstatement
Key audit matters are those matters that, in our professional judgment, were of most significance in the audit of the Financial Statements and
include the most significant assessed risks of material misstatement (whether or not due to fraud) identified by us, including those which had
the greatest effect on: the overall audit strategy; the allocation of resources in the audit; and directing the efforts of the engagement team. We
summarise below the key audit matters, in decreasing order of audit significance, in arriving at our audit opinion above, together with our key
audit procedures to address those matters and, as required for public interest entities, our results from those procedures. These matters
were addressed, and our results are based on procedures undertaken, in the context of, and solely for the purpose of, our audit of the
Financial Statements as a whole, and in forming our opinion thereon, and consequently are incidental to that opinion, and we do not provide a
separate opinion on these matters.
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Moneysupermarket.com Group PLC Annual Report and Accounts 2019
109
Financial Statements
Independent Auditor’s Report to the Members of
Moneysupermarket.com Group PLC Only continued
2. Key audit matters: our assessment of risks of material misstatement continued
The risk
Our response
Subjective estimate:
There is inherent uncertainty involved in
estimating unbilled revenue at the period
end. Revenue is recognised
predominantly from internet lead
generation (click based revenues).
Accrued revenue as at period end is
recorded when it is highly probable that a
significant reversal in the amount of
cumulative revenue recognised will not
occur and is based on an estimation of
leads provided that will result in
completed sales.
The effect of these matters is that, as part
of our risk assessment for audit planning
purposes, we determined that the
revenue accrual had a high degree of
estimation uncertainty, with a potential
range of reasonable outcomes greater
than our materiality for the Financial
Statements as a whole. In conducting our
final audit work, we reassessed the
degree of estimation uncertainty to be
less than that materiality.
Accounting treatment:
The criteria for capitalising software and
development costs incurred, including
assessing whether the costs are directly
attributable to the development project
and whether the completion of the
related asset is technically feasible,
requires the application of judgement.
Revenue recognition:
revenue accrual
(2019: £38.7 million;
2018: £31.1million)
Refer to page 75
(Audit Committee Report),
page 122 (accounting
policy) and page 139
(financial disclosures).
Capitalisation of
software and
development costs
(2019: £10.6 million;
2018: £12.8million)
Refer to page 75 (Audit
Committee Report), pages
123 and 124 (accounting
policy) and pages 135-138
(financial disclosures).
Our procedures included:
• Control design and observation: Our testing identified
weaknesses in the design of controls. As a result we expanded
the extent of our detailed testing over and above that originally
planned;
• Test of details: Agreeing a sample of the revenue accrual, where
the invoice has been raised post year-end, to the provider
confirmation of the amount to be billed and/or cash received
post year end;
• Expectation vs outcome: We developed an expectation for the
uninvoiced element of the accrual based on historical cash
receipts or historical invoices and considered whether the
amount recorded was within an acceptable range; and
• Assessing transparency: Assessing the adequacy of the
Group’s disclosures about the degree of estimation involved in
arriving at the revenue accrual.
Our results
• We found the resulting estimate of the revenue accrual to be
acceptable. (2018: acceptable).
Our procedures included:
• Control design and observation: Observing and evaluating the
design of controls over the accuracy and approval of total project
spend and expenditure being capital in nature;
• Accounting analysis: Comparing a sample of capitalised costs
to external invoices and assessing whether the costs have been
appropriately capitalised, by reference to the recognition criteria
in the applicable accounting standard, including challenging the
Group’s assessment of the technical feasibility of the related
assets by challenging Capital Project managers and inspecting
business cases, submitted prior to the cost being incurred;
• Benchmarking assumptions: Assessing the reasonableness of
the assumptions included in the determination of the expected
future economic benefit of the capitalised projects by assessing
the consistency of the assumptions from knowledge gained
performing our audit procedures; and
• Assessing transparency: Assessing the adequacy of the
Group’s disclosures in respect of the capitalisation of software
and development cost.
Our results
• We found the capitalisation of software and development costs
to be acceptable. (2018: acceptable).
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Moneysupermarket.com Group PLC Annual Report and Accounts 2019
The risk
Our response
Recoverability of Parent
Company’s investment
in subsidiary and debt
due from group entities
Investment in subsidiary
(2019: £181.7 million;
2018: £181.7 million)
Amounts due from
subsidiary undertakings
(2019: £579.2 million;
2018: £575.5 million)
Low risk, high value
The carrying amount of the Parent
Company’s investment in subsidiary and
debt due from group entities represents
99.9% (2018: 99.8%) of the Company’s
total assets. Their recoverability is not a
high risk of significant misstatement or
subject to significant judgement.
However, due to their materiality in the
context of the Parent Company Financial
Statements, this is considered to be the
area that had the greatest effect on our
overall Parent Company audit.
Our procedures included:
• Test of detail: Comparing the carrying amount of the
investment with the subsidiary’s draft balance sheet to identify
whether its net assets, being an approximation of its minimum
recoverable amount, was in excess of its carrying amount;
• Assessing subsidiary audits: Assessing the work performed by
the audit team on the subsidiaries and considering the results of
that work on those subsidiaries’ profits and net assets including
assessing the liquidity of the assets and therefore the ability of
the subsidiary to fund the repayment of the receivable; and
• Comparing valuations: Comparing the carrying amount of the
investment and debt due from group entities to the Group’s
market capitalisation to assess whether there are any indicators
of impairment.
Our results
• We found the Group’s assessment of the recoverability of the
Parent Company’s investment in subsidiary and recoverability of
the group debtor balance to be acceptable. (2018: acceptable).
We included the completeness and valuation of intangibles arising from the purchase of Decision Technologies Limited and its subsidiaries as
an event driven key audit matter in 2018. The acquisition accounting has been finalised in 2019, with no adjustments made to the provisional
values recognised at 31 December 2018. As such we have not assessed this as a significant risk in our current year audit and, therefore, it is
not separately identified in our report this year.
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111
Financial Statements
Independent Auditor’s Report to the Members of
Moneysupermarket.com Group PLC Only continued
3. Our application of materiality and an overview of the scope of our audit
Materiality for the Group Financial Statements as a whole was set at £5.4 million (2018: £5.0 million), determined with a reference to a
benchmark of Group profit before tax of £116.0 million, of which it represents 4.7% (2018: 4.7%).
Materiality for the Parent Company Financial Statements as a whole was set at £4.5 million (2018: £4.0 million), determined with a reference to
a benchmark of Parent Company total assets of £761.4 million of which it represents 0.6% (2018: 0.5%).
We agreed to report to the Audit Committee any corrected or uncorrected identified misstatements exceeding £0.27 million (2018: £0.25
million), in addition to other identified misstatements that warranted reporting on qualitative grounds.
Of the Group’s seven (2018: seven) reporting components, we subjected six (2018: six) to full scope audits for group purposes and one (2018:
one) to specified risk-focused audit procedures. The latter was not individually financially significant enough to require a full scope audit for
group purposes but did present specific individual risks that needed to be addressed. Work on all components, including the audit of the
Parent Company, was performed by the Group team.
The components within the scope of our work accounted for the percentages illustrated below.
Group profit before tax
£116.0m
(2018: £106.9m)
Group materiality
£5.4m
(2018: £5.0m)
£5.4m
Whole financial
statements materiality
(2018: £5.0m)
£4.1m
Range of materiality
at seven components
(£0.02m-£4.10m)
(2018: £0.1m to £4.0m)
£0.27m
Misstatements reported to
the Audit Committee
(2018: £0.25m)
Group profit before tax
Group materiality
Group total
assets
Group
revenue
Group profit
before tax
5
3
7
4
2
1
100%
(2018 100%)
100%
(2018 100%)
100%
(2018 100%)
97
95
96
93
99
98
Full scope for Group audit purposes 2019
Specified risk-focused audit procedures 2019
Full scope for Group audit purposes 2018
Specified risk-focused audit procedures 2018
4. We have nothing to report on going concern
The Directors have prepared the Financial Statements on the going concern basis as they do not intend to liquidate the Company or the
Group or to cease their operations, and as they have concluded that the Company’s and the Group’s financial position means that this is
realistic. They have also concluded that there are no material uncertainties that could have cast significant doubt over their ability to continue
as a going concern for at least a year from the date of approval of the Financial Statements (‘the going concern period’).
Our responsibility is to conclude on the appropriateness of the Directors’ conclusions and, had there been a material uncertainty related to
going concern, to make reference to that in this audit report. However, as we cannot predict all future events or conditions and as subsequent
events may result in outcomes that are inconsistent with judgements that were reasonable at the time they were made, the absence of
reference to a material uncertainty in this auditor’s report is not a guarantee that the Group and the Company will continue in operation.
In our evaluation of the Directors’ conclusions, we considered the inherent risks to the Group’s and Company’s business model and analysed
how those risks might affect the Group’s and Company’s financial resources or ability to continue operations over the going concern period.
The risk that we considered most likely to adversely affect the Group’s and Company’s available financial resources over this period was the
threat of a significant new entrant into the price comparison sector, coupled with changing consumer demands for the Group’s services. As
this is a risk that could potentially cast significant doubt on the Group’s and the Company’s ability to continue as a going concern, we
considered sensitivities over the level of available financial resources indicated by the Group’s financial forecasts taking account of reasonably
possible (but not unrealistic) adverse effects that could arise from this risk and evaluated the achievability of the actions the Directors consider
they would take to improve the position should this risk materialise. We also considered less predictable but realistic second order impacts,
such as the impact of loss of trust events for customers and regulatory developments concerning the UK regulators thematic investigations
into the pricing of insurance and energy products, which could result in a rapid reduction of available financial resources.
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Moneysupermarket.com Group PLC Annual Report and Accounts 2019
4. We have nothing to report on going concern continued
Based on this work, we are required to report to you if:
• we have anything material to add or draw attention to in relation to the Directors’ statement in Note 2 to the Financial Statements on the
use of the going concern basis of accounting with no material uncertainties that may cast significant doubt over the Group and Company’s
use of that basis for a period of at least 12 months from the date of approval of the Financial Statements; or
the related statement under the Listing Rules set out on page 34 is materially inconsistent with our audit knowledge.
•
We have nothing to report in these respects, and we did not identify going concern as a key audit matter.
5. We have nothing to report on the other information in the Annual Report
The Directors are responsible for the other information presented in the Annual Report together with the Financial Statements. Our opinion
on the Financial Statements does not cover the other information and, accordingly, we do not express an audit opinion or, except as explicitly
stated below, any form of assurance conclusion thereon.
Our responsibility is to read the other information and, in doing so, consider whether, based on our Financial Statements audit work, the
information therein is materially misstated or inconsistent with the Financial Statements or our audit knowledge. Based solely on that work we
have not identified material misstatements in the other information.
Strategic Report and Directors’ Report
Based solely on our work on the other information:
• we have not identified material misstatements in the Strategic report and the Directors’ report;
•
•
in our opinion the information given in those reports for the financial year is consistent with the Financial Statements; and
in our opinion those reports have been prepared in accordance with the Companies Act 2006.
Directors’ Remuneration Report
In our opinion the part of the Directors’ Remuneration Report to be audited has been properly prepared in accordance with the Companies
Act 2006.
Disclosures of emerging and principal risks and longer-term viability
Based on the knowledge we acquired during our Financial Statements audit, we have nothing material to add or draw attention to in relation
to:
•
the Directors’ confirmation within the Viability Statement, page 33, that they have carried out a robust assessment of the emerging and
principal risks facing the Group, including those that would threaten its business model, future performance, solvency and liquidity;
the Principal Risks and Uncertainty disclosures describing these risks and explaining how they are being managed and mitigated; and
the Directors’ explanation in the Viability Statement of how they have assessed the prospects of the Group, over what period they have
done so and why they considered that period to be appropriate, and their statement as to whether they have a reasonable expectation
that the Group will be able to continue in operation and meet its liabilities as they fall due over the period of their assessment, including
any related disclosures drawing attention to any necessary qualifications or assumptions.
•
•
Under the Listing Rules we are required to review the Viability Statement. We have nothing to report in this respect.
Our work is limited to assessing these matters in the context of only the knowledge acquired during our financial statements audit. As we
cannot predict all future events or conditions and as subsequent events may result in outcomes that are inconsistent with judgments that
were reasonable at the time they were made, the absence of anything to report on these statements is not a guarantee as to the Group’s and
Company’s longer-term viability.
Corporate governance disclosures
We are required to report to you if:
• we have identified material inconsistencies between the knowledge we acquired during our Financial Statements audit and the Directors’
statement that they consider that the annual report and Financial Statements taken as a whole is fair, balanced and understandable and
provides the information necessary for shareholders to assess the Group’s position and performance, business model and strategy; or
the section of the annual report describing the work of the Audit Committee does not appropriately address matters communicated by us
to the Audit Committee.
•
We are required to report to you if the Corporate Governance Statement does not properly disclose a departure from the provisions of the UK
Corporate Governance Code specified by the Listing Rules for our review.
We have nothing to report in these respects.
Moneysupermarket.com Group PLC Annual Report and Accounts 2019
113
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Financial Statements
Independent Auditor’s Report to the Members of
Moneysupermarket.com Group PLC Only continued
6. We have nothing to report on the other matters on which we are required to report by exception
Under the Companies Act 2006, we are required to report to you if, in our opinion:
• adequate accounting records have not been kept by the Parent Company, or returns adequate for our audit have not been received from
•
branches not visited by us; or
the Parent Company Financial Statements and the part of the Directors’ Remuneration Report to be audited are not in agreement with the
accounting records and returns; or
certain disclosures of Directors’ remuneration specified by law are not made; or
•
• we have not received all the information and explanations we require for our audit.
We have nothing to report in these respects.
7. Respective responsibilities
Directors’ responsibilities
As explained more fully in their statement set out on page 108, the Directors are responsible for: the preparation of the Financial Statements
including being satisfied that they give a true and fair view; such internal control as they determine is necessary to enable the preparation of
Financial Statements that are free from material misstatement, whether due to fraud or error; assessing the Group and Parent Company’s
ability to continue as a going concern, disclosing, as applicable, matters related to going concern; and using the going concern basis of
accounting unless they either intend to liquidate the Group or the Parent Company or to cease operations, or have no realistic alternative but
to do so.
Auditor’s responsibilities
Our objectives are to obtain reasonable assurance about whether the Financial Statements as a whole are free from material misstatement,
whether due to fraud or other irregularities (see below), or error, and to issue our opinion in an auditor’s report. Reasonable assurance is a
high level of assurance, but does not guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material
misstatement when it exists. Misstatements can arise from fraud, other irregularities or error and are considered material if, individually or in
aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the Financial Statements.
A fuller description of our responsibilities is provided on the FRC’s website at www.frc.org.uk/auditorsresponsibilities.
Irregularities – ability to detect
We identified areas of laws and regulations that could reasonably be expected to have a material effect on the Financial Statements from our
general commercial and sector experience, through discussion with the Directors and other management (as required by auditing standards),
and from inspection of the Group’s regulatory and legal correspondence and discussed with the Directors and other management the policies
and procedures regarding compliance with laws and regulations. We communicated identified laws and regulations throughout our team and
remained alert to any indications of non-compliance throughout the audit.
The potential effect of these laws and regulations on the Financial Statements varies considerably.
Firstly, the Group is subject to laws and regulations that directly affect the Financial Statements including financial reporting legislation
(including related companies legislation), distributable profits legislation and taxation legislation and we assessed the extent of compliance
with these laws and regulations as part of our procedures on the related Financial Statement items.
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Moneysupermarket.com Group PLC Annual Report and Accounts 2019
Irregularities – ability to detect continued
Secondly, the Group is subject to many other laws and regulations where the consequences of non-compliance could have a material effect
on amounts or disclosures in the Financial Statements, for instance through the imposition of fines or litigation or the loss of the Group’s
licence to operate. We identified the following areas as those most likely to have such an effect: data protection law and, as an intermediary,
the major trading business within the Group is subject to authorisation and regulation by the Financial Conduct Authority. Auditing Standards
limit the required audit procedures to identify non-compliance with these laws and regulations to enquire of the Directors and other
management and inspection of regulatory and legal correspondence, if any. These limited procedures did not identify actual or suspected
non-compliance.
Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the
Financial Statements, even though we have properly planned and performed our audit in accordance with auditing standards. For example,
the further removed non-compliance with laws and regulations (irregularities) is from the events and transactions reflected in the Financial
Statements, the less likely the inherently limited procedures required by auditing standards would identify it. In addition, as with any audit,
there remained a higher risk of non-detection of irregularities, as these may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal controls. We are not responsible for preventing non-compliance and cannot be expected to
detect non-compliance with all laws and regulations.
8. The purpose of our audit work and to whom we owe our responsibilities
This report is made solely to the Company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our
audit work has been undertaken so that we might state to the Company’s members those matters we are required to state to them in an
auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other
than the Company and the Company’s members, as a body, for our audit work, for this report, or for the opinions we have formed.
Stuart Crisp (Senior Statutory Auditor)
for and on behalf of KPMG LLP, Statutory Auditor
Chartered Accountants
15 Canada Square
London
E14 5GL
19 February 2020
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Moneysupermarket.com Group PLC Annual Report and Accounts 2019
115
Financial Statements
Consolidated Statement of Comprehensive Income
for the year ended 31 December 2019
Revenue
Cost of sales
Gross profit
Distribution expenses
Administrative expenses
Operating profit
Finance income
Finance expense
Share of post-tax loss of equity-accounted investees
Profit before tax
Taxation
Profit for the year
Other comprehensive income
Total comprehensive income for the year
All profit and comprehensive income is attributable to the equity holders of the Company.
Earnings per share
Basic earnings per ordinary share (p)
Diluted earnings per ordinary share (p)
The notes on pages 120 to 149 are an integral part of these Consolidated Financial Statements.
Year ended
31 December
2019
£m
Year ended
31 December
2018
£m
388.4
(122.0)
266.4
(29.9)
(118.2)
118.3
0.2
(2.2)
(0.3)
116.0
(21.1)
94.9
2.1
97.0
355.6
(102.3)
253.3
(30.2)
(115.1)
108.0
0.2
(1.1)
(0.2)
106.9
(20.3)
86.6
–
86.6
17.7
17.7
16.2
16.1
Note
4
6
8
8
14
9
15
10
10
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Moneysupermarket.com Group PLC Annual Report and Accounts 2019
Consolidated Statement of Financial Position
at 31 December 2019
Assets
Non-current assets
Property, plant and equipment
Intangible assets and goodwill
Equity accounted investments
Other investments
Total non-current assets
Current assets
Trade and other receivables
Prepayments
Cash and cash equivalents
Total current assets
Total assets
Liabilities
Non-current liabilities
Other payables
Deferred tax liabilities
Total non-current liabilities
Current liabilities
Borrowings
Trade and other payables
Current tax liabilities
Total current liabilities
Total liabilities
Equity
Share capital
Share premium
Reserve for own shares
Retained earnings
Other reserves
Total equity
Total equity and liabilities
31 December
2019
£m
31 December
2018
£m
Note
12
13
14
15
16
20
17
18
17
17
19
44.7
177.9
0.5
5.3
228.4
47.4
6.3
24.2
77.9
13.8
183.7
0.8
0.9
199.2
43.1
6.5
44.8
94.4
306.3
293.6
37.3
10.8
48.1
–
52.2
6.7
58.9
107.0
0.1
204.7
(2.9)
(63.4)
60.8
199.3
306.3
4.7
10.1
14.8
15.0
54.9
8.4
78.3
93.1
0.1
204.0
(2.6)
(59.7)
58.7
200.5
293.6
The notes on pages 120 to 149 are an integral part of these Consolidated Financial Statements.
The Financial Statements were approved by the Board of Directors and authorised for issue on 19 February 2020. They were signed on its
behalf by:
Mark Lewis
Chief Executive Officer
Scilla Grimble
Chief Financial Officer
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Moneysupermarket.com Group PLC Annual Report and Accounts 2019
117
Financial Statements
Consolidated Statement of Changes in Equity
for the year ended 31 December 2019
At 1 January 2018
Profit for the year
Total comprehensive income for the year
New shares issued
Purchase of shares by employee trusts
Exercise of LTIP awards
Distribution in relation to LTIP
Equity dividends
Share-based payments
At 31 December 2018
Profit for the year
Other comprehensive income for the period
Total comprehensive income for the year
New shares issued
Purchase of shares by employee trusts
Exercise of LTIP awards
Equity dividends
Share-based payments
At 31 December 2019
Issued
share
capital
£m
Note
0.1
–
–
0.0
–
–
–
–
–
0.1
–
–
–
0.0
–
–
–
–
0.1
11
22
15
11
22
Share
premium
£m
203.3
–
–
0.7
–
–
–
–
–
Reserve
for own
shares
£m
Retained
earnings
£m
(3.5)
–
–
–
(0.8)
1.7
–
–
–
(88.6)
86.6
86.6
–
–
(1.7)
(0.3)
(56.5)
0.8
Other
reserves
£m
58.7
–
–
–
–
–
–
–
–
Total
£m
170.0
86.6
86.6
0.7
(0.8)
–
(0.3)
(56.5)
0.8
204.0
(2.6)
(59.7)
58.7
200.5
–
–
–
0.7
–
–
–
–
204.7
–
–
–
–
(0.5)
0.2
–
–
(2.9)
94.9
–
94.9
–
–
(0.2)
(100.0)
1.6
(63.4)
–
2.1
2.1
–
–
–
–
–
60.8
94.9
2.1
97.0
0.7
(0.5)
–
(100.0)
1.6
199.3
Reserve for own shares
The reserve for the Company’s own ordinary shares comprises the cost of the Company’s ordinary shares held by the Group through
employee trusts. At 31 December 2019, the Group held 331,720 ordinary shares (2018: 348,787) at a cost of 0.02p per share (2018:0.02p)
through a Share Incentive Plan trust for the benefit of the Group’s employees.
The Group also held 296,362 shares (2018: 182,553) through an Employee Benefit Trust at an average cost of 326.95p per share (2018:
322.66p) for the benefit of employees participating in the various Long Term Incentive Plan schemes.
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, as discussed below, 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.
Upon the acquisition of Moneysupermarket.com Financial Group Limited, a merger reserve of £60,750,000 for 15% of the fair value of assets
acquired, a merger reserve of £16,923,000 for 45% of the book value transferred from a company under common control, and a revaluation
reserve of £65,345,000 representing 45% of the fair value of the intangible assets transferred from a company under common control were
recognised. Amounts were transferred from these reserves to retained earnings as the goodwill and other intangibles balances which relate to
this acquisition were impaired and amortised.
The fair value reserve of £2.1m represents other comprehensive income in relation to the fair value uplift in investments for the period.
The balance of other reserves is broken down in the below table.
Other reserves
Capital redemption reserve
Fair value reserve
FV of merger reserve
Revaluation reserve
Amounts transferred from reserves to retained earnings
Total
31 December
2019
£m
31 December
2018
£m
–
2.1
16.9
65.3
(23.5)
60.8
–
–
16.9
65.3
(23.5)
58.7
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Moneysupermarket.com Group PLC Annual Report and Accounts 2019
Consolidated Statement of Cash Flows
for the year ended 31 December 2019
Cash flows from operating activities
Profit for the year
Adjustments to reconcile Group profit to net cash flow from operating activities:
Depreciation of property, plant and equipment
Amortisation of intangible assets
Impairment of tangible assets
Share of loss of joint venture
Net finance costs
Equity-settled share-based payment transactions
Income tax expense
Change in trade and other receivables
Change in trade and other payables
Income tax paid
Net cash from operating activities
Cash flows from investing activities
Interest received
Acquisition of investments
Acquisition of property, plant and equipment
Acquisition of intangible assets
Acquisition of subsidiary, net of cash acquired
Net cash used in investing activities
Cash flows from financing activities
Proceeds from share issue
Proceeds from borrowings
Repayment of borrowings
Purchase of shares by employee trusts
Interest paid
Repayment of lease liabilities
Distribution in relation to Long Term Incentive Plan
Dividends paid
Net cash used in financing activities
Net (decrease)/increase in cash and cash equivalents
Cash and cash equivalents at 1 January
Cash and cash equivalents at 31 December
Changes in liabilities from financing activities
Balance at 1 January 2018
Changes from financing cash flows
Proceeds from borrowings
Repayment of borrowings
Total changes from financing cash flows
Balance at 31 December 2018
Balance at 1 January 2019
Changes from financing cash flows
Proceeds from borrowings
Repayment of borrowings
Interest paid
Repayment of lease liabilities
Total changes from financing cash flows
Interest expense in respect of loans, borrowings and lease liabilities
New leases
Balance at 31 December 2019
Year ended
31 December
2019
£m
Year ended
31 December
2018
£m
Note
94.9
4.5
16.4
–
0.3
2.0
1.6
21.1
(4.1)
(0.9)
(22.1)
86.6
1.4
13.3
0.8
0.2
0.9
0.8
20.3
(6.9)
7.9
(18.7)
113.7
106.6
0.2
(2.3)
(4.5)
(10.7)
–
(17.3)
0.7
49.0
(64.0)
(0.5)
(1.4)
(0.8)
–
(100.0)
(117.0)
(20.6)
44.8
24.2
Lease
liabilities
£m
–
–
–
–
–
30.2
–
–
(1.0)
(0.8)
(1.8)
1.2
4.8
34.4
0.2
(1.5)
(6.5)
(12.9)
(33.8)
(54.5)
0.7
127.5
(112.5)
(0.7)
(0.6)
–
(0.3)
(56.5)
(42.4)
9.7
35.1
44.8
Total
£m
–
127.5
(112.5)
15.0
15.0
45.2
49.0
(64.0)
(1.4)
(0.8)
(16.8)
1.6
4.8
34.4
12
13
12
14
8
22
9
8
12
13
27
20
20
11
20
Loans and
borrowings
£m
–
127.5
(112.5)
15.0
15.0
15.0
49.0
(64.0)
(0.4)
–
(15.0)
0.4
–
–
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119
Financial Statements
Notes to the Consolidated Financial Statements
1. Corporate information
The Consolidated Financial Statements of Moneysupermarket.com Group PLC, a public company incorporated and domiciled in England
(registered at MoneySuperMarket House, St David’s Park, Ewloe, Chester, UK, CH5 3UZ), and its subsidiaries (together referred to as the
‘Group’) for the year ended 31 December 2019, were authorised for issue in accordance with a resolution of the Directors on 19 February
2020. The Consolidated Financial Statements have been prepared in accordance with International Financial Reporting Standards as adopted
by the EU (Adopted IFRSs) and the Companies Act 2006 where applicable. The presentation currency of these Consolidated Financial
Statements is sterling. All amounts in the Consolidated Financial Statements have been rounded to the nearest £100,000. The Company has
elected to prepare its Company Financial Statements in accordance with FRS 102 – The Financial Reporting Standard applicable in the UK and
Republic of Ireland; these are presented on pages 150 to 155.
The principal activity of the Group is to provide price comparison and lead generation services to customers across a wide range of products
including money, insurance and home services through its websites.
2. Summary of significant accounting policies
The Group has consistently applied the following accounting policies to all periods presented in these Consolidated Financial Statements,
unless if mentioned otherwise.
Basis of preparation
The Consolidated Financial Statements are prepared on the historical cost basis, except where otherwise stated. Comparative figures
presented in the Consolidated Financial Statements represent the year ended 31 December 2018. The Consolidated Financial Statements are
prepared on a going concern basis, which the Directors deem appropriate, given the Group’s positive net cash position, continued growth and
forecast profitability.
Use of estimates and judgements
The preparation of Consolidated Financial Statements requires management to make judgements, estimates and assumptions that affect the
application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from
these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in
which the estimate is revised and in any future periods affected.
Revenue accruals are calculated by applying revenue per transaction based on historic trends to the number of clicks tracked. See note 4 for
details of assumptions and underlying estimates.
Information about assumptions and estimation uncertainties at 31 December 2019 that may have a risk of resulting in an adjustment to the
carrying amounts of assets and liabilities in the next financial year is included in the following notes:
• Note 16 revenue recognition (focusing on the revenue accrued that has not been received in cash at the balance sheet date)
Information about judgements made in applying accounting policies that have the most significant effects on the amounts recognised in the
Consolidated Financial Statements is included in the following notes:
• Note 13 intangible assets and goodwill (capitalisation of software and development costs)
• Note 3 and note 14 equity accounted investments (determination of whether the joint arrangement is a joint venture or a joint operation)
Basis of consolidation
These Consolidated Financial Statements incorporate the Financial Statements of the Company and all its subsidiaries.
Subsidiaries are entities controlled by the Group. The Group controls an entity when it is exposed to, or has rights to, variable returns from its
involvement with the entity and has the ability to affect those returns through its power over the entity. The acquisition date is the date on
which control is transferred to the acquirer. The Financial Statements of subsidiaries are included in the Consolidated Financial Statements
from the date that control commences until the date that control ceases.
Associates are those entities in which the Group has significant influence, but not control or joint control, over the financial and operating
policies. A joint venture is an arrangement in which the Group has joint control, whereby the Group has rights to the net assets of the
arrangement, rather than rights to its assets and obligations for its liabilities.
Interests in associates and the joint venture are accounted for using the equity method. They are initially recognised at cost, which includes
transaction costs. Subsequent to initial recognition, the Consolidated Financial Statements include the Group’s share of the profit or loss and
OCI of equity accounted investees, until the date on which significant influence or joint control ceases.
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Moneysupermarket.com Group PLC Annual Report and Accounts 2019
Intra-group balances and transactions, and any unrealised income and expenses arising from intra-group transactions, are eliminated.
Unrealised gains arising from transactions with equity-accounted investees are eliminated against the investment to the extent of the Group’s
interest in the investee. Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that there is no evidence
of impairment.
Accounting for business combinations
From 1 January 2010 the Group has applied IFRS 3 Business Combinations (2008) in accounting for business combinations using the
acquisition method. The change in accounting policy has been applied prospectively.
Acquisitions on or after 1 January 2010
For acquisitions on or after 1 January 2010, the Group measures goodwill at the acquisition date as:
•
•
•
•
the fair value of the consideration transferred; plus
the recognised amount of any non-controlling interests in the acquiree; plus
if the business combination is achieved in stages, the fair value of the existing equity interest in the acquiree; less
the net recognised amount (fair value) of the identifiable assets acquired and liabilities assumed.
When the excess is negative, a bargain purchase gain is recognised immediately in profit or loss.
The consideration transferred does not include amounts related to the settlement of pre-existing relationships. Such amounts are generally
recognised in profit or loss.
Costs related to the acquisition, other than those associated with the issue of debt or equity securities, that the Group incurs in connection
with a business combination are expensed as incurred.
Any contingent amount payable is recognised at fair value at the acquisition date. If the contingent amount is classified as equity, it is not
remeasured and settlement is accounted for within equity. Otherwise, subsequent changes to the fair value of the contingent amount are
recognised in profit or loss. Where the contingent amount is dependent on future employment, it is treated as a cost of continuing
employment, and therefore is recognised as an expense over the relevant period.
Deferred consideration comprises obligations to pay specified amounts at future dates, i.e. there is no uncertainty about the amount to be
paid. It is recognised and measured at fair value at the date of acquisition and it is included in the consideration transferred. The unwinding of
any interest element or deferred consideration is recognised in the Income Statement.
Acquisitions between 22 June 2007 and 1 January 2010
For acquisitions between 22 June 2007 and 1 January 2010, goodwill represents the excess of the cost of the acquisition over the Group’s
interest in the recognised amount (generally fair value) of the identifiable assets, liabilities and contingent liabilities of the acquiree. When the
excess was negative, a bargain purchase gain was recognised immediately in profit or loss.
Transaction costs, other than those associated with the issue of debt or equity securities, that the Group incurred in connection with business
combinations were capitalised as part of the cost of the acquisition.
The Group was established via a series of transactions that occurred concurrently on 22 June 2007. These comprised the incorporation of the
Company with Simon Nixon as sole shareholder, the acquisition by the Company using a share for share exchange of Simon Nixon’s 45%
interest in Moneysupermarket.com Financial Group Limited and the acquisition by the Company of all other shares in Moneysupermarket.com
Financial Group Limited from third parties. The acquisition of Simon Nixon’s shares was between two parties, being Simon Nixon and the
Company, who were under common control at the time of the transaction. The acquisition was of an interest in a company which gave the
investor a significant influence in the company and it was concluded that this arrangement was a common control transaction and not within
the scope of IFRS 3 Business Combinations. As a result the Company accounted for this 45% interest in Moneysupermarket.com Financial
Group Limited at original carrying value rather than fair value at the date of the acquisition. The acquisition of the remaining shares in
Moneysupermarket.com Financial Group Limited was accounted for in accordance with IFRS 3 Business Combinations applying the accounting
guidance for a business combination achieved in stages. This resulted in the fair value of the identifiable assets, liabilities and contingent
liabilities of Moneysupermarket.com Financial Group Limited being recognised in full and the goodwill in respect of the acquisition from third
parties being recognised.
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121
Financial Statements
Notes to the Consolidated Financial Statements continued
2. Summary of significant accounting policies continued
Revenue
Revenue is derived from the Group’s principal activity of providing price comparison services on the internet. The Group generates fees from
internet lead generation and commissions from brokerage sales through a variety of contractual arrangements.
Revenue is recognised when the Group has satisfied its performance obligations relating to a transaction. IFRS 15 Revenue from Contracts
with Customers requires the Group to allocate the transaction price to separate performance obligations within a contract.
The following table provides information about the nature and timing of the satisfaction of performance obligations and the related revenue
recognition policies.
Type of sales transaction
Price comparison services
Nature and timing of satisfaction of
performance obligations
Revenue recognition policies
The performance obligation is the provision of an
internet lead to a provider’s website.
Revenue is recognised in the period in which
the lead is provided.
The trigger for the transaction price to become
receivable is usually a completed sale on the
provider’s website. However, for some contracts
the trigger is the point at which the lead is provided.
The transaction price is a either a fixed amount per
completed sale or a variable amount derived from
the terms of the completed sale.
At the period end an estimate of accrued
revenue is made for leads provided that have
resulted in completed sales. This is based on
the volume of leads provided in the period,
historic conversion rates and the expected
price per completed sale.
From historical experience and post year end confirmation, the Group does not expect there to be a material difference between the revenue
accrued at the year end and the amount subsequently billed. The under and over estimates on revenue are typically within a range of -1% to
+3%, historically this has been an under estimate of revenue. At 31 December 2019, a -1% to +3% difference on the £38.7m of accrued
revenue (2018: £31.1m) would equate to approximately (£0.4m) to £1.2m (2018: (£0.3m) to £0.9m).
The impact of discounts allowed is shared with providers and is accounted for as a deduction in revenue.
Cost of sales
The Group recognises associated costs of internet lead generation in the period that the lead is generated. Costs in respect of cashback
payments made by the Group to customers are included in cost of sales.
Property, plant and equipment
Property, plant and equipment is stated at cost less accumulated depreciation and any accumulated impairment losses.
Subsequent expenditure is capitalised only if it is probable that the future economic benefits associated with the expenditure will flow to
the Group.
Where parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items of property,
plant and equipment.
Depreciation is charged to the Statement of Comprehensive Income on a straight-line basis over the estimated useful life of each part of an
item of property, plant and equipment. Assets under construction are not depreciated until brought into use. The estimated useful lives are
as follows:
Buildings
Plant and equipment (including IT equipment)
Fixtures and fittings
Office equipment
50 years
3 years
5 years
5 years
The useful lives and depreciation rates are reassessed at each reporting date and adjusted if appropriate.
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Moneysupermarket.com Group PLC Annual Report and Accounts 2019
Intangible assets and goodwill
Goodwill
Goodwill is measured at cost less any accumulated impairment losses, with the carrying value being reviewed for impairment at least annually,
and whenever there is an indication that the carrying value may be impaired.
Other intangible assets
The cost of other intangible assets acquired in a business combination is fair value as at the date of acquisition. After initial recognition,
intangible assets are carried at cost less any accumulated amortisation and any accumulated impairment losses. All the Group’s intangible
assets (other than goodwill) have been identified as having finite useful lives. As such, they are amortised on a straight-line basis over their
useful economic life and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortisation
period and the amortisation method for an intangible asset with a finite useful life are reviewed at least at each reporting date and adjusted if
appropriate. The amortisation expense on intangible assets with finite lives is recognised in the Statement of Comprehensive Income. The
estimated useful lives are as follows:
Market-related
Customer relationships
Customer lists
Technology
10 years
7 years
3 years
3 - 5 years
Internally generated and other intangible assets are amortised under the same method as noted above.
Market-related intangible assets are defined as those that are primarily used in the marketing or promotion of products and services, for
example trademarks, trade names and internet domain names.
Customer-related intangible assets acquired by the Group consist of customer lists, customer contracts and relationships, and non-
contractual customer relationships. For accounting purposes, customer relationships and customer lists have been identified separately.
Relationships with high-profile customers provide the Group with prominence in the marketplace, create volume and traffic on the website,
and enhance the reputation of the brand. Customer lists allow the Group to undertake targeted marketing activities.
it is technically feasible to complete the project so that it will be available for use;
Technology-based intangible assets relate to innovations and technical advances such as computer software, patented and unpatented
technology, databases and trade secrets. Costs that are directly attributable to projects of a capital nature are recognised as technology-based
intangible assets controlled by the Group and are recognised when the following criteria are met:
•
• management intends to complete the project and use it;
•
•
• adequate technical, financial and other resources to complete the development and to use output of the project is available; and
•
there is an ability to use or sell the project;
it can be demonstrated how the project will generate probable future economic benefits;
the expenditure attributable to the project during its development can be reliably measured.
Directly attributable costs that are capitalised as part of the project can include employee and contractor costs. Other development
expenditures that do not meet these criteria, as well as ongoing maintenance and costs associated with routine upgrades and enhancements,
are recognised as an expense as incurred.
Subsequent expenditure is capitalised only when it increases the future economic benefits embodied in the specific asset to which it relates.
All other expenditure, including expenditure on internally generated goodwill and brands, is recognised in profit or loss as incurred.
Research and development
Expenditure on research activities, undertaken with the prospect of gaining technical knowledge and understanding, is charged to the
Consolidated Statement of Comprehensive Income when incurred. Development expenditure is capitalised when it meets the criteria outlined
in IAS 38. Expenditure that does not meet the criteria is expensed directly to the Consolidated Statement of Comprehensive Income.
Moneysupermarket.com Group PLC Annual Report and Accounts 2019
123
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Financial Statements
Notes to the Consolidated Financial Statements continued
2. Summary of significant accounting policies continued
Financial instruments
Recognition and initial measurement
Trade receivables and debt securities issued are initially recognised when they are originated. All other financial assets and financial liabilities
are initially recognised when the Group becomes a party to the contractual provisions of the instrument.
Fixed asset and short term investments in equity securities held by the Group are classified as fair value through other comprehensive income
(‘FVOCI’) – equity instruments and are stated at fair value, with any resultant gain or loss being recognised directly in other comprehensive
income (in the fair value reserve).
Cash and cash equivalents comprise cash balances and call deposits. Bank overdrafts that are repayable on demand are included as a
component of cash and cash equivalents for the purpose only of the Consolidated Statement of Cash Flows.
A financial asset (unless it is a trade receivable without a significant financing component) or financial liability is initially measured at fair value
plus, for an item not at fair value through profit or loss (‘FVTPL’), transaction costs that are directly attributable to its acquisition or issue. A
trade receivable without a significant financing component is initially measured at the transaction price.
Classification and subsequent measurement
Financial assets
Financial assets are not reclassified subsequent to their initial recognition unless the Group changes its business model for managing financial
assets, in which case all affected financial assets are reclassified on the first day of the first reporting period following the change in the
business model.
A financial asset is measured at amortised cost if it meets both of the following conditions and is not designated as at FVTPL:
•
•
it is held within a business model whose objective is to hold assets to collect contractual cash flows; and
its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal
amount outstanding.
A debt investment is measured at FVOCI if it meets both of the following conditions and is not designated as at FVTPL:
•
•
it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets; and
its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal
amount outstanding.
All financial assets not classified as measured at amortised cost or FVOCI as described above are measured at FVTPL. This includes all
derivative financial assets.
Financial assets – subsequent measurement and gains and losses
Financial assets at FVTPL
These assets are subsequently measured at fair value. Net gains and losses, including any
interest or dividend income, are recognised in profit or loss.
Financial assets at amortised cost
Debt investments at FVOCI
Equity investments at FVOCI
These assets are subsequently measured at amortised cost using the effective interest method.
The amortised cost is reduced by impairment losses. Interest income, foreign exchange gains
and losses and impairment are recognised in profit or loss. Any gain or loss on derecognition is
recognised in profit or loss.
These assets are subsequently measured at fair value. Interest income calculated using the
effective interest method, foreign exchange gains and losses and impairment are recognised in
profit or loss. Other net gains and losses are recognised in OCI. On derecognition, gains and
losses accumulated in OCI are reclassified to profit or loss.
These assets are subsequently measured at fair value. Dividends are recognised as income in
profit or loss unless the dividend clearly represents a recovery of part of the cost of the
investment. Other net gains and losses are recognised in OCI and are never reclassified to profit
or loss.
Financial liabilities – classification, subsequent measurement and gains and losses
Financial liabilities are classified as measured at amortised cost or FVTPL. A financial liability is classified as at FVTPL if it is classified as
held-for-trading, it is a derivative or it is designated as such on initial recognition. Financial liabilities at FVTPL are measured at fair value and
net gains and losses, including any interest expense, are recognised in profit or loss. Other financial liabilities are subsequently measured at
amortised cost using the effective interest method. Interest expense and foreign exchange gains and losses are recognised in profit or loss.
Any gain or loss on derecognition is also recognised in profit or loss.
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Derecognition
Financial asset
The Group derecognises a financial asset when the contractual rights to the cash flows from the financial asset expire, or it transfers the rights
to receive the contractual cash flows in a transaction in which substantially all of the risks and rewards of ownership of the financial asset are
transferred or in which the Group neither transfers nor retains substantially all of the risks and rewards of ownership and it does not retain
control of the financial asset.
Financial liability
The Group derecognises a financial liability when its contractual obligations are discharged or cancelled, or expire. The Group also
derecognises a financial liability when its terms are modified and the cash flows of the modified liability are substantially different, in which
case a new financial liability based on the modified terms is recognised at fair value.
On derecognition of a financial liability, the difference between the carrying amount extinguished and the consideration paid (including any
non-cash assets transferred or liabilities assumed) is recognised in profit or loss.
Impairment
Impairment of non-financial assets
The carrying amounts of the Group’s assets are reviewed annually to determine whether there is any indication of impairment. If such
indication exists, the asset’s recoverable amount is estimated.
For the purposes of impairment reviews, the recoverable amount of the Group’s assets is taken to be the higher of their fair value less costs to
sell and their value in use.
An impairment loss is recognised whenever the carrying amount of an asset or its cash-generating unit (‘CGU’) exceeds its recoverable
amount. Impairment losses are recognised in the Consolidated Statement of Comprehensive Income.
See note 13 for full disclosure of how goodwill and impairment losses are allocated across the CGUs.
Financial instruments and contract assets
The Group recognises loss allowances for Expected Credit Losses (‘ECLs’) on financial assets measured at amortised cost. The Group
measures loss allowances at an amount equal to lifetime ECLs. Loss allowances wholly relate to trade receivables and contract assets are
always measured at an amount equal to lifetime ECLs.
When determining whether the credit risk of a financial asset has increased significantly since initial recognition and when estimating ECLs, the
Group considers reasonable and supportable information that is relevant and available without undue cost or effort. This includes both
quantitative and qualitative information and analysis, based on the Group’s historical experience and informed credit assessment and
including forward-looking information. The Group uses an allowance matrix to measure the ECLs of trade receivables from individual
customers and assumes that the credit risk of default on a financial asset has increased significantly if it is more than 120 days past due.
The maximum period considered when estimating ECLs is the maximum contractual period over which the Group is exposed to credit risk.
At each reporting date, the Group assesses whether financial assets carried at amortised cost and debt securities at FVOCI are credit-
impaired. A financial asset is ‘credit-impaired’ when one or more events that have a detrimental impact on the estimated future cash flows of
the financial asset have occurred.
Loss allowances for financial assets measured at amortised cost are deducted from the gross carrying amount of the assets.
The gross carrying amount of a financial asset is written off when the Group has no reasonable expectations of recovering a financial asset in
its entirety or a portion thereof. For individual customers, the Group has a policy of writing off the gross carrying amount when the financial
asset is 180 days past due based on historical experience of recoveries of similar assets.
ECLs’ are a probability-weighted estimate of credit losses. Credit losses are measured as the present value of all cash shortfalls (i.e. the
difference between the cash flows due to the Group in accordance with the contract and the cash flows that the Group expects to receive).
ECLs are discounted at the effective interest rate of the financial asset.
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125
Financial Statements
Notes to the Consolidated Financial Statements continued
2. Summary of significant accounting policies continued
Employee benefits
Defined contribution plans
Obligations for contributions to defined contribution pension plans are recognised as an expense in the Consolidated Statement of
Comprehensive Income as the related service is provided.
Share-based payment transactions
The Group’s share schemes allow certain Group employees to acquire ordinary shares in the Company. The fair value of share awards made is
recognised as an employee expense with a corresponding increase in equity. The fair value is measured at the award date and spread over
the period during which the employees become unconditionally entitled to the awards. The fair values of the share awards are measured
using the Monte Carlo method for options subject to a market-based condition and the Black-Scholes model for all others, taking into account
the terms and conditions upon which the awards were made. The amount recognised as an expense is adjusted to reflect the number of
share awards expected to vest.
Short-term employee benefits
Short-term employee benefit obligations are measured on an undiscounted basis and are recognised as an expense in the Consolidated
Statement of Comprehensive Income as the related service is provided.
A provision is recognised for the amount expected to be paid under short-term cash bonus or deferred bonus plan if the Group has a present
legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated
reliably. The Group’s deferred bonus plans currently do not have any ongoing performance obligations and are therefore provided for as
described above in the period to which they related.
Advertising costs
The Group incurs costs from advertising via a number of different media. Costs associated with the production of adverts are recognised as an
expense in the Consolidated Statement of Comprehensive Income only once the advert is available to the Group in a format ready for use,
having been approved for airing or displaying. The cost of airing or displaying the advert is taken as an expense in the period in which the
advert is aired or displayed.
Finance income
Finance income comprises interest receivable, which is recognised in the Consolidated Statement of Comprehensive Income as it accrues
using the effective interest method. The effective interest rate is the rate that exactly discounts estimated future cash receipts through the
expected life of the financial instruments to the gross carrying amount of the financial asset.
Finance costs
Finance costs comprise interest charged on borrowings, leases recognised under IFRS 16 and the unwind of discount on deferred
consideration. Borrowings are recognised initially at fair value less directly attributable transaction costs. The effective interest rate method is
then used for subsequent remeasurement of borrowings and is applied to the amortised cost of the financial liability.
Leases
The Group has applied IFRS 16 using the modified retrospective approach and therefore the comparative information has not been restated
and continues to be reported under IAS 17 and IFRIC 4. The details of accounting policies under IAS 17 and IFRIC 4 are disclosed separately.
Policy applicable from 1 January 2019
At inception of a contract, the Group assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease if the contract
conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract
conveys the right to control the use of an identified asset, the Group uses the definition of a lease in IFRS 16. This policy is applied to contracts
entered into on or after 1 January 2019.
Leased items are recognised on the balance sheet as an asset valued at its right-of-use and a corresponding liability that reflects the present
value of future lease payments.
The asset is initially measured at its right-of-use value which reflects the total cost of lease payments, the direct costs incurred to bring the
asset into use and an estimate of the cost that will be incurred when dismantling or uninstalling the item. The asset is then depreciated
through the profit and loss account on a straight line basis over the contract term of the lease.
The liability is initially recognised at the present value of future lease payments using the discount rate implicit in the lease if it can be
determined or otherwise using the incremental borrowing rate of the company.
Leased items with a value of less than £5,000 and items leased over a term of less than 12 months are not recognised on the balance sheet as
an asset and liability. The cost of lease payments is recognised in the profit and loss account as they fall due on an accrued basis.
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Policy applicable before 1 January 2019
For contracts entered into before 1 January 2019, the Group determined whether the arrangement was or contained a lease based on the
assessment of whether:
•
•
fulfilment of the arrangement was dependent on the use of a specific asset or assets; and
the arrangement had conveyed a right to use the asset.
In the comparative period, the Group classified leases that transferred substantially all of the risks and rewards of ownership as finance leases.
When this was the case, the leased assets were measured initially at an amount equal to the lower of their fair value and the present value of
the minimum lease payments. Minimum lease payments were the payments over the lease term that the lessee was required to make,
excluding any contingent rent. Subsequent to initial recognition, the assets were accounted for in accordance with the accounting policy
applicable to that asset.
Assets held under other leases were classified as operating leases and were not recognised in the Group’s statement of financial position.
Payments made under operating leases were recognised in profit or loss on a straight-line basis over the term of the lease. Lease incentives
received were recognised as an integral part of the total lease expense, over the term of the lease.
Dividends
Dividends payable to the Company’s shareholders are recognised as a liability and deducted from shareholders’ equity in the period in which
the shareholders’ right to receive payment is established.
Taxation
Income tax expense comprises current and deferred tax. It is recognised in the Consolidated Statement of Comprehensive Income except to
the extent that it relates to items recognised directly in equity, in which case it is recognised in equity.
Current tax is the expected tax payable on the taxable income for the year, using tax rates in force for the year, and any adjustment to tax
payable in respect of previous years.
Deferred tax is provided on temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and
the amounts used for taxation purposes. The following temporary differences are not provided for: the initial recognition of goodwill; the initial
recognition of assets or liabilities that affect neither accounting nor taxable profit other than in a business combination; and differences
relating to investments in subsidiaries to the extent that they will probably not reverse in the foreseeable future. The amount of deferred tax
provided is based on the expected manner of realisation or settlement of the carrying amount of assets and liabilities, using tax rates enacted
or substantively enacted at the balance sheet date.
A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available against which the asset can
be utilised.
Deferred tax liabilities are recognised at the expected future tax rate of the value of the intangible assets with finite lives which are acquired
through business combinations representing the tax effect of the amortisation of these assets in future periods.
These liabilities will decrease in line with the amortisation of the related intangible assets, with the deferred tax credit recognised in the
Statement of Comprehensive Income in accordance with IAS 12.
Research and development tax credits are accounted for in accordance with IAS 20 as a government grant. The credit is recognised once a
reasonable estimate of the amount can be made.
Reserve for own shares
The Group has a number of equity-settled, share-based employee incentive plans. In connection with these, shares in the Company are held
by an Employee Benefit Trust (‘EBT’). The assets and liabilities of the EBT are required to be consolidated within these accounts as it is deemed
to be under de facto control of the Group. The assets of the EBT mainly comprise Moneysupermarket.com Group PLC shares, which are
shown as a deduction from total equity at cost.
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127
Financial Statements
Notes to the Consolidated Financial Statements continued
2. Summary of significant accounting policies continued
Standards, amendments and interpretations adopted during the period
The Group has adopted the IFRS 16 Leases accounting standard from 1 January 2019. A number of other new standards are also effective
from 1 January 2019 but they do not have a material effect on the Consolidated Financial Statements.
The company adopted IFRS 16 on 1 January 2019 using the modified retrospective approach. Accordingly, the comparative information
presented for 2018 is not restated – i.e. it is presented, as previously reported, under IAS 17 and related interpretations. The disclosure
requirements under IFRS 16 have not generally been applied to comparative information. The details of the changes in accounting policies are
described below.
IFRS 16 fundamentally changes the accounting for leases by lessees. It eliminates the legacy IAS 17 dual accounting model, which distinguished
between on-balance sheet finance leases and off-balance sheet operating leases. IFRS 16 introduces a single on-balance sheet accounting
model that is similar to finance lease accounting under IAS 17. A systematic review of the leases held by the Group was carried out ahead of
1 January 2019. The four most valuable leases to be considered under IFRS 16 relate to the Group’s Land & Buildings. Less material items held
on rental agreements, such as printers and vending machines were also considered as part of this review.
On transition to IFRS 16, the Group elected to apply the practical expedient to grandfather the assessment of which transactions are leases.
The Group applied IFRS 16 only to contracts that were previously identified as leases. Contracts that were not identified as leases under IAS 17
were not reassessed for whether there is a lease under IFRS 16. Therefore, the definition of a lease under IFRS 16 was applied only to
contracts entered into or changed on or after 1 January 2019.
The Group previously classified property leases as operating leases under IAS 17. On transition, lease liabilities were measured at the present
value of remaining lease payments, discounted at the Group’s incremental borrowing rate as at 1 January 2019. Right-of-use assets are
measured at an amount equal to the lease liability, adjusted by the amount of any prepaid or accrued lease payments. The right-of-use asset
for the Dean St office was adjusted for the impact of the rent free period lease incentive.
The Group has tested its right-of-use assets for impairment on the date of transition and has concluded that there is no indication that the
right-of-use assets are impaired.
In adopting IFRS 16 the Group has also used a number of practical expedients when applying the standard to leases previously accounted for
as operating leases under IAS 17. Leases with a remaining contract term of less than 12 months at the date of application or with a minimal
value of less than £5,000 have not been recognised as right-of-use assets. For assets that have been recognised as right-of-use assets at the
application date the initial direct costs have been excluded from measurement. Hindsight has been used to determine the term of each lease
where this differs from the original contract term.
Adopting the new standard has resulted in increases to both assets and liabilities due to operating leases such as property leases under IAS
17 being recognised on the Consolidated Statement of Financial Position. Rental costs and lease payments have reduced depreciation and
increased finance costs in the Consolidated Statement of Comprehensive Income. When measuring lease liabilities for leases that were
classified as operating leases, the Group discounted lease payments using it’s incremental borrowing rate at 1st January 2019. The weighted
average rate applied was 3%. The commitment disclosed under IAS 17 discounted using the incremental borrowing rate equals the opening
liability disclosed under IFRS 16.
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Moneysupermarket.com Group PLC Annual Report and Accounts 2019
The table below shows the impact of adopting IFRS 16 on the Consolidated Financial Statements:
Impact on Consolidated Statement of Financial Position
Assets (£m)
Liabilities (£m)
2019 Opening Consolidated
Statement of Financial Position
2019 Revised Opening
Consolidated Statement of
Financial Position after applying
IFRS 16 adjustments
293.6
93.1
321.0
120.5
2019 Opening Consolidated
Statement of Financial Position
£m
2019 Revised Opening
Consolidated Statement of
Financial Position after applying
IFRS 16 adjustments
£m
Assets
Non-current assets
Property, plant and equipment
Intangible assets and goodwill
Equity accounted investments
Investments
Total non-current assets
Current assets
Trade and other receivables
Prepayments
Cash and cash equivalents
Total current assets
Total assets
Liabilities
Non-current liabilities
Other payables
Deferred tax liabilities
Total non-current liabilities
Current liabilities
Borrowings
Trade and other payables
Current tax liabilities
Total current liabilities
Total liabilities
13.8
183.7
0.8
0.9
199.2
43.1
6.5
44.8
94.4
293.6
4.7
10.1
14.8
15.0
54.9
8.4
78.3
93.1
41.2
183.7
0.8
0.9
226.6
43.1
6.5
44.8
94.4
321.0
31.4
10.1
41.5
15.0
55.6
8.4
79.0
120.5
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129
Financial Statements
Notes to the Consolidated Financial Statements continued
2. Summary of significant accounting policies continued
Standards, amendments and interpretations adopted during the period continued
The impact on financial performance in 2019 for leases in existence at the application date is an increase in adjusted EBITDA of £2.4m, with
depreciation and interest also increasing by £2.3m and £1.0m respectively. The impact on both basic EPS and adjusted EPS in 2019 is a
decrease of 0.1p.
During the accounting period the Group has entered into an agreement to sub-lease a proportion of its Dean St premises. The sub-lease is for
a period of 3 years and as such does not reflect a transfer of substantially all of the risk and reward of the underlying asset, which in this case
is the 15 year head-lease or right-of-use asset. Consequently the Group has classified the sub-lease as an operating lease under IFRS 16. The
rental income is £0.5m over 3 years.
Standards, amendments and interpretations issued but not yet effective
A number of new standards are effective for annual periods beginning after 1 January 2019 and earlier adoption is permitted; however, the
Group has not early adopted the new or amended standards in preparing these Consolidated Financial Statements.
The following amended standards and interpretations are not expected to have a significant impact on the Group’s consolidated
financial statements.
Standard
Summary of changes
Amendments to References to the
Conceptual Framework in IFRS Standards
Amendments to IFRS 2, IFRS 3, IFRS 6, IFRS 14, IAS 1, IAS 8,
IAS 34, IAS 37, IAS 38, IFRIC 12, IFRIC 19, IFRIC 20, IFRIC 22,
and SIC-32 to update those pronouncements with regard
to the revised the Conceptual Framework.
EU Endorsement status
Endorsed.
Amendments to IAS 1 and IAS 8
Amendments to IAS 1 and IAS 8 to update the definition
of material.
Endorsed.
3. Acquisitions and disposals
Decision Technologies Limited
On 9 August 2018, the Group acquired a 100% shareholding in Decision Technologies Limited for consideration of £40.6m paid in cash and
£4.7m deferred consideration. This acquisition was driven by the strategic intent to enter the B2B segment, whilst providing Decision
Technologies Limited with the platform to enable development within new verticals such as Home Services, Insurance and Money. The
acquisition accounting has now been finalised, including the resulting goodwill recognised on acquisition and further detail can be found in
note 13.
Podium Solutions Limited
On 26 March 2018, the Group acquired a 50% shareholding in Podium Solutions Limited for £200,000. A further investment was completed
on 14 December 2018 for £66,700 that maintained the Group’s 50% shareholding. At the same time the Group invested in £733,300 of loan
notes that was matched by other investors. Neither the Group nor any of the other shareholders in Podium Solutions Limited hold a majority
shareholding or have direct rights or obligations to the assets or liabilities of the joint arrangement and therefore Podium Solutions is
accounted for as a joint venture using the equity accounting method. The principal base of business is Nottingham, UK.
4. Revenue
All revenue is derived from the Group’s principal activity and is generated in the UK.
Total revenue from price comparison services
2019
£m
388.4
2018
£m
355.6
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Moneysupermarket.com Group PLC Annual Report and Accounts 2019
5. Segmental information
Business segments
In applying IFRS 8 operating segments, the Group redefined its operating segments in 2018 to align to the way in which the Group is now run,
by vertical, with the reportable segments presented reflecting the way in which information is presented to the Group’s Chief Operating
Decision Maker, the Company Board. The reportable segments are Insurance, Money and Home Services. All operating segments represent
individual trading verticals and all three segments are reported separately. This disclosure correlates with the information which is presented
to the Group’s Chief Operating Decision Maker, which reviews revenue by segment. The Group’s costs, finance income, tax charges and net
assets are only reviewed by the Chief Operating Decision Maker at a consolidated level and therefore have not been allocated between all
segments in the analysis below. The operating segments within ‘all other segments’ do not meet the quantitative threshold for reportable
segments and therefore have been aggregated. Having adopted the new vertical structure in 2018, during 2019 the Group has undertaken a
project to analyse its costs by vertical, developing appropriate controls and reporting procedures to support the new reporting structure. In
order to ensure the operational effectiveness of new procedures the Group will introduce segmental reporting of cost and profit measures in
the 2020 accounting period.
The following summary describes how revenue is derived for each reportable segment.
Reportable segment
Revenue products and services
Insurance
Money
Home Services
Other
Customer completes transaction for insurance policy on any of the following: provider website,
our website or a telephone call.
Customer completes transaction for money products such as credit cards, loans and mortgages on
provider website.
Customer completes transaction for home services products such as energy and broadband on
provider website.
Customer completes transaction for other products such as mobile, broadband, shopping and travel
on provider website or our website.
Operating segments have not been aggregated and all assets held by the Group are located in the UK.
Segment
Year ended 31 December 2019
Revenue
Operating expenses
Operating profit
Net finance costs
Share of loss of joint venture
Profit before tax
Taxation
Profit for the year
At 31 December 2019
Assets and liabilities
Intangible assets
Goodwill
Other unallocated assets
Total assets
Deferred tax liabilities
Other unallocated liabilities
Total liabilities
Other segment information
Capital expenditure
Property, plant and equipment
Intangible assets
Investments
Total capital expenditure
Depreciation
Amortisation
Insurance
£m
Money
£m
Home
Services
£m
Reportable
segments
total
£m
All other
segments
£m
188.4
86.0
68.6
343.0
45.4
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Total
£m
388.4
(270.1)
118.3
(2.0)
(0.3)
116.0
(21.1)
94.9
39.6
138.3
128.4
306.3
10.8
96.2
107.0
4.5
10.7
2.3
17.5
4.5
16.4
Moneysupermarket.com Group PLC Annual Report and Accounts 2019
131
Financial Statements
Notes to the Consolidated Financial Statements continued
5. Segmental information continued
Insurance
£m
Money
£m
Home
Services
£m
Reportable
segments
total
£m
All other
segments
£m
183.0
88.1
49.2
320.4
35.2
Segment
Year ended 31 December 2018
Revenue
Operating expenses
Operating profit
Net finance costs
Share of loss of joint venture
Profit before tax
Taxation
Profit for the year
At 31 December 2018
Assets and liabilities
Intangible assets
Goodwill
Other unallocated assets
Total assets
Deferred tax liabilities
Other unallocated liabilities
Total liabilities
Other segment information
Capital expenditure
Property, plant and equipment
Intangible assets
Investments
Total capital expenditure
Depreciation
Amortisation
Impairment
6. Results from operating activities
Operating profit is stated after charging items detailed in the table below.
Depreciation of property, plant and equipment
Amortisation of intangible assets
Operating lease rentals
Impairments
Auditor’s remuneration:
Audit of these Financial Statements
Audit of subsidiaries’ Financial Statements
2019
£m
4.5
16.4
–
–
0.2
0.1
Total
£m
355.6
(247.6)
108.0
(0.9)
(0.2)
106.9
(20.3)
86.6
45.4
138.2
110.0
293.6
10.1
83.0
93.1
6.5
12.9
1.5
20.9
1.4
13.3
0.8
2018
£m
1.4
13.3
2.8
0.8
0.1
0.1
Non-audit related services provided by KPMG constituted a review opinion on the financial statements for the 6-month period ended 30 June
2019 which amounted to £0.04m in 2019 (2018: £0.03m).
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Moneysupermarket.com Group PLC Annual Report and Accounts 2019
7. Staff numbers and cost
The average number of persons employed by the Group (including Directors) during the year, analysed by category, was as follows:
Number of
employees
2019
Number of
employees
2018
Technology and product operations
Administration
The aggregate payroll costs of these persons were as follows:
Wages and salaries
Compulsory social security contributions
Contributions to defined contribution plans
Equity-settled share-based payment transactions
Social security contributions related to share awards and options
Capitalised staff costs
8. Net finance expense
Finance income
Interest received on bank deposits
Finance expense
Interest payable on revolving credit facility
Interest payable on leases
Unwind of discount on deferred consideration in relation to the acquisition of Decision Technologies Limited
Total finance expense
Net finance expense
312
491
803
2019
£m
50.5
5.7
2.0
3.3
0.3
(4.7)
57.1
2019
£m
0.2
(0.9)
(1.2)
(0.1)
(2.2)
(2.0)
The Group initially applied IFRS 16 at 1 January 2019, using the modified retrospective approach. Under this approach, comparative
information is not restated. See note 2.
9. Taxation
Current tax
Current tax on income for the year
Adjustment in relation to prior period
Deferred tax
Origination and reversal of temporary differences
Adjustments due to changes in corporation tax rate
Adjustment in relation to prior period
Tax expense for the year
2019
£m
22.9
(2.5)
20.4
(0.3)
–
1.0
0.7
21.1
224
497
721
2018
£m
45.2
5.2
1.8
0.8
–
(2.1)
50.9
2018
£m
0.2
(1.1)
–
–
(1.1)
(0.9)
2018
£m
21.4
–
21.4
(0.9)
(1.4)
1.2
(1.1)
20.3
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133
Financial Statements
Notes to the Consolidated Financial Statements continued
9. Taxation continued
Reconciliation of the effective tax rate
The tax charge for the year is lower than (2018: same as) the effective standard rate of corporation tax in the UK in 2019 of 19.00% (2018:
19.00%). The differences are explained below.
Profit before tax
Standard rate of tax at 19.00% (2018: 19.00%)
Effects of:
Expenses not deductible for tax purposes
Movement related to share based payments
Impact of changes in tax rate
Share of loss of equity-accounted investees
Adjustments in relation to prior periods
Tax expense for the year
2019
£m
116.0
22.0
0.2
0.5
–
(0.1)
(1.5)
21.1
2018
£m
106.9
20.3
0.2
–
(1.4)
–
1.2
20.3
Reductions in the UK corporation tax rate from 20% to 19% (effective from 1 April 2017) and to 18% (effective 1 April 2020) were substantively
enacted on 26 October 2015. An additional reduction to 17% (effective 1 April 2020) was substantively enacted on 6 September 2016. This will
reduce the Company’s future current tax charge accordingly. The deferred tax liability at the balance sheet date has been calculated based on
these rates.
10. Earnings per share
Basic earnings per share
Basic earnings per share is calculated by dividing the profit or loss for the year attributable to ordinary equity holders of the Company, by the
weighted average number of ordinary shares outstanding during the year. The Company’s own shares held by employee trusts are excluded
when calculating the weighted average number of ordinary shares outstanding.
Diluted earnings per share
Diluted earnings per share is calculated by dividing the profit or loss for the year attributable to ordinary equity holders of the Company, by
the weighted average number of ordinary shares outstanding during the year 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 earnings per share have been calculated on the following basis:
Profit after taxation attributable to equity holders (£m)
Basic weighted average shares in issue (millions)
Dilutive effect of share-based instruments (millions)
Diluted weighted average shares in issue (millions)
Basic earnings per share (p)
Diluted earnings per share (p)
Adjusted basic and diluted earnings per share have been calculated as follows:
Profit before tax
Amortisation of acquisition related intangible assets
Strategy related one-off costs
Estimated taxation at 19.00% (2018: 19.00%)
Profit for adjusted earnings per share purposes
Basic adjusted earnings per share (p)
Diluted adjusted earnings per share (p)
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Moneysupermarket.com Group PLC Annual Report and Accounts 2019
2019
94.9
536.3
0.1
536.4
17.7
17.7
2019
£m
116.0
2.4
2.3
120.7
(22.9)
97.8
18.2
18.2
2018
86.6
536.2
1.3
537.5
16.2
16.1
2018
£m
106.9
1.5
6.7
115.1
(21.9)
93.2
17.4
17.3
11. Dividends
Declared and paid dividends on ordinary shares:
Prior year final dividend
Special dividend
Interim dividend
Total dividend paid in the year
Proposed for approval (not recognised as a liability at 31 December):
Final dividend
12. Property, plant and equipment
Cost:
At 1 January 2018
Additions
At 31 December 2018
At 1 January 2019
Recognition of right-of-use asset on initial application of IFRS 16
Adjusted balance at 1 January 2019
Additions
At 31 December 2019
Depreciation:
At 1 January 2018
Depreciation for the year
Impairment
At 31 December 2018
At 1 January 2019
Depreciation for the year
At 31 December 2019
Net carrying value:
At 31 December 2018
At 31 December 2019
pence per
share
2019
£m
pence per
share
8.10
7.46
3.10
43.4
40.0
16.6
7.60
–
2.95
18.66
100.0
10.55
8.61
46.3
8.10
Land and
buildings
£m
Plant and
equipment
£m
Office
equipment
£m
Fixtures and
fittings
£m
9.9
5.1
15.0
15.0
27.4
42.4
5.7
48.1
1.6
0.5
0.8
2.9
2.9
3.2
6.1
12.1
42.0
29.1
0.9
30.0
30.0
–
30.0
0.5
30.5
28.2
0.3
–
28.5
28.5
0.3
28.8
1.5
1.7
1.0
0.1
1.1
1.1
–
1.1
0.5
1.6
1.0
0.1
–
1.1
1.1
0.1
1.2
–
0.4
2.0
0.5
2.5
2.5
–
2.5
1.3
3.8
1.8
0.5
–
2.3
2.3
0.9
3.2
0.2
0.6
2018
£m
40.7
–
15.8
56.5
43.2
Total
£m
42.0
6.6
48.6
48.6
27.4
76.0
8.0
84.0
32.6
1.4
0.8
34.8
34.8
4.5
39.3
13.8
44.7
Property, plant and equipment includes right-of-use assets of £29.7m related to leased properties that do not meet the definition of
investment property (see note 23).
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135
Financial Statements
Notes to the Consolidated Financial Statements continued
13. Intangible assets and goodwill
Cost:
At 1 January 2018
Additions internally developed
Assets acquired on acquisition of subsidiary
At 31 December 2018
Additions internally developed
At 31 December 2019
Amortisation:
At 1 January 2018
Amortisation charge for the year
At 31 December 2018
Amortisation charge for the year
At 31 December 2019
Carrying amounts
At 31 December 2018
At 31 December 2019
Market
related
£m
Customer
relationship
£m
Customer
list
£m
Technology
related
£m
Goodwill
£m
148.7
–
6.6
155.3
–
155.3
143.8
1.3
145.1
1.7
146.8
10.2
8.5
69.3
–
–
69.3
–
69.3
69.3
–
69.3
–
69.3
–
–
2.3
–
–
2.3
–
2.3
2.3
–
2.3
–
2.3
–
–
83.0
13.0
2.1
98.1
10.6
181.9
–
30.7
212.6
–
108.7
212.6
50.9
12.0
62.9
14.7
77.6
35.2
31.1
74.3
–
74.3
–
74.3
138.3
138.3
Total
£m
485.2
13.0
39.4
537.6
10.6
548.2
340.6
13.3
353.9
16.4
370.3
183.7
177.9
Included within the technology related intangible assets are technology related intangible assets under development with a net carrying value
of £6.9m (2018: £2.9m).
In order to accurately quantify the value of internally generated technology assets the Group undertakes project tracking to record the cost of
both internal and contract staff wholly assigned to each project. Third party costs incurred are allocated to investment projects and recognised
at purchase cost. This approach ensures that technology related intangible assets accurately reflect the cost of development. As highlighted in
note 2, there is a degree of judgement regarding the recognition of costs incurred in developing technology related intangible assets. This is
due to the asset recognition criteria being predicated on future economic benefit flowing from that asset. Management are confident however
that any spend capitalised satisfies the criteria of IAS 38 – Intangible Assets and, where relevant, SIC-32 Intangible Assets – Web Site Costs. On
an annual basis, or where an indication exists, the Group is required to assess its goodwill and intangible assets for impairment. See below for
this assessment for goodwill and technology related 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.
Following the impairment charge taken against these assets in 2008, the market capitalisation of the Group approximated to the total carrying
value of the goodwill, intangible and other non-current assets of the Group. At 31 December 2019, the market capitalisation exceeded the
carrying value of the goodwill, intangible and other non-current assets, and net current assets by more than 100% (2018: more than 100%).
On adoption of IFRS 8, the Group was required to allocate goodwill between its cash generating units (‘CGUs’) that represent the lowest level
within the Group at which goodwill is monitored for internal management purposes, but which are not larger than an operating segment as
defined by IFRS 8. These CGUs are Insurance, Money, Home Services, Decision Technologies and Travel. The Group has performed impairment
testing at a CGU level.
As the CGUs were redefined in April 2018, as part of the Group’s restructure under the Reinvent strategy, this resulted in MoneySavingExpert.
com being folded into the CGUs of the Group, underpinned by the ongoing integration and migration of legacy technology systems into the
Group. At this point, the Group has reallocated goodwill over the defined CGUs using a relative value approach, resulting in the goodwill
allocations detailed in the table overleaf.
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In August 2018 the Group acquired Decision Technologies Limited. The Group employed the services of an appropriately qualified and
experienced independent third party to value the intangible assets acquired as part of the Decision Technologies Limited acquisition, which
resulted in a goodwill balance of £30.7m. This balance has now been allocated entirely to the Decision Technologies CGU.
Goodwill is therefore allocated across each CGU as follows:
Insurance
Money
Home Services
Decision Technologies
Travel
Total
31 December
2019
£m
31 December
2018
£m
42.9
33.2
24.1
30.7
7.4
42.9
33.2
24.1
30.7
7.4
138.3
138.3
Impairment review by CGU and Group
For the current year, the recoverable amount of the acquisition related intangible assets and goodwill allocated to the respective CGUs was
taken to be their value in use and was calculated by reference to the forecast cash flows.
The present value of the future cash flows has been calculated with the following key assumptions:
• Cash flows for years 1–3 for each CGU represent management’s best estimate of future cash flows as at 31 December 2019, and are based
upon the Group’s approved long term planning model incorporating cost of sales, advertising and an allocation of overhead costs. The key
assumptions underlying the plan relate to visitor volumes, source of visitors, revenue per transaction/visitor and marketing spend, which
incorporate past experience. The forecast assumes continued growth during the course of the next 3 years, driven by new media
campaigns, exploitation of the Group’s data assets and further investments made in the core technology underpinning the Group’s
key channels.
• Cash flows beyond 3 years have been calculated as a perpetuity inclusive of an annual growth of 1.60% (2018: 1.53%) that is in line with the
Office for Budget Responsibility (OBR) 5 year forecast for growth in the UK’s Gross Domestic Product (GDP). This rate is consistent with
recent historic trends and reflects a prudent approach.
• A pre-tax discount rate of 13.5% (2018: 13.5%) has been used in the forecast for the Insurance, Money, Home Services, Decision
Technologies and Travel segments, which is based on the Group’s weighted average cost of capital plus a risk premium. Management
believe this discount rate continues to reflect the return an investor in a company with the Group’s risk profile would expect in the broader
context of the investment market.
• Different CGUs face slightly different risk profiles due to macro-economic factors but this is not considered significant enough to justify
more than a small adjustment to each discount rate of approximately +/- 1-2%. Having completed some sensitivity analysis in this area the
impact on the impairment review is not material.
A different set of assumptions may be more appropriate in future years dependent on changes to the macro-economic environment.
The analysis performed calculates that the recoverable amount of the assets allocated to the Insurance, Money, Home Services, Decision
Technologies and Travel CGUs exceeds their carrying value by in excess of 100% (2018: 100%). No reasonably possible change to a key
assumption would result in an impairment.
Group impairment testing
As explained in note 5, whilst the Group is able to allocate revenue between the Insurance, Money, Home Services, Decision Technologies and
Travel CGU’s, its cost base is reviewed by the Group’s Chief Operating Decision Maker at a Group rather than CGU level, and a number of the
significant costs which the Group incurs cannot be allocated either directly or on a reasonable and consistent basis to the CGUs that are each
operating segment. Therefore the cash flows estimated for these CGU’s include all of the Group’s forecast revenues and an allocation of the
Group’s forecast costs.
The Group has therefore also performed a further impairment test for the Group as a whole, in a manner consistent with previous years. In
these calculations the Group is treated as one group of CGUs, and the test compared the carrying amount, including goodwill and other
corporate assets, to the recoverable amount.
The recoverable amount has been estimated based on the present value of its future cash flows, which has been calculated with a set of
assumptions consistent with those set out above in relation to the individual operating segment calculations.
The analysis performed calculates that the recoverable amount of the Group’s assets exceeds their carrying value by in excess of 100% (2018:
100%), and as such, no impairment was identified.
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Financial Statements
Notes to the Consolidated Financial Statements continued
13. Intangible assets and goodwill continued
The Group has completed sensitivity analysis as part of its impairment testing procedures by flexing both cash flow and discounting
assumptions significantly. The headroom on goodwill is such that there are no foreseeable scenarios in which the Group would need to
consider an impairment.
In conclusion, no reasonably possible change to a key assumption would result in an impairment (2018: same).
Impairment testing of technology related intangible assets
Technology related intangible assets in use by the Group are tested for impairment if there is an indication that the asset may be impaired.
The Group also conducts annual impairment testing of significant technology related intangible assets under development and not yet
available for use, in line with IAS 36.10.
14. Equity accounted investments
Podium Solutions Limited (‘Podium’) is a joint venture in which the Group obtained joint control and a 50% ownership interest on 26 March
2018. Podium is a financial technology business, principally engaged in developing digital solutions in the mortgages sector. Podium is not
publicly listed and is registered at MoneySuperMarket House, St David’s Park, Ewloe, Chester CH5 3UZ.
Podium is structured as a separate vehicle and the Group has a residual interest in the net assets of Podium. Accordingly, the Group has
classified its interest in Podium as a joint venture.
The following table reconciles the summarised financial information of Podium to the carrying amount of the Group’s interest in Podium.
Percentage ownership interest
Net assets (100%)
Group’s share of net assets (50%)
Loss for period (100%)
Investment in joint venture
Group’s share of loss brought forward (50%)
Group’s share of loss for period (50%)
Carrying amount of interest in joint venture
31 December
2019
31 December
2018
50%
50%
31 December
2019
£m
31 December
2018
£m
1.1
0.6
(0.6)
1.0
(0.2)
(0.3)
0.5
1.7
0.9
(0.3)
1.0
–
(0.2)
0.8
15. Other investments
The carrying amounts of investments as at 31 December 2019 are shown in the below table. The investments are held at fair value and
therefore carrying value at 31 December 2019 is the fair value.
Investments in equity securities
Truelayer Limited
Flagstone Investment Management Limited
By Miles Ltd
Plum Fintech Limited
Total
31 December
2018
£m
Additions in
the year
£m
Fair value
uplift
£m
31 December
2019
£m
0.4
-
0.3
0.2
0.9
-
2.0
0.3
-
2.3
1.1
0.5
0.4
0.1
2.1
1.5
2.5
1.0
0.3
5.3
Prior to the year end, the Group agreed terms to acquire a 28% shareholding in CYTI (Holdings) Limited, an existing white label partner in the
Insurance vertical. The consideration payable will be £2.8m. The transaction is conditional on regulatory approval and so the investment has
not been recognised within the 2019 accounts. The Group also has a call option to acquire the remaining share capital of CYTI (Holdings)
Limited that is exercisable between 1 January 2021 and 31 December 2023.
Sensitivity analysis
For the fair value of investments, a 5% movement in share price would have an effect of £0.5m on the total value.
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16. Trade and other receivables
Trade and other receivables
All receivables fall due within one year.
31 December
2019
£m
31 December
2018
£m
47.4
43.1
As a result of click based revenue being recognised in the period that the lead is generated, there is an element of subjectivity in calculating
a revenue accrual as a result of estimating the number of successful applications on the provider’s website in the period between the latest provider
data available and the year end. This revenue accrual can typically represent approximately one month’s revenue. The accrued revenue is estimated
by considering the volume of clicks that have passed from the Group’s websites through to provider websites in the period, the historic conversion of
such clicks into completed product purchases, and contracted revenue per transaction. From historical experience and post year end confirmation,
the Group expects any differences between the amounts accrued at year end and those amounts subsequently billed to be not materially different.
The under and over estimates on revenue are typically in a region of -1% to + 3%, historically this has been an under estimate of revenue. A -1% to +
3% difference on the £38.7m revenue accrual (2018: £31.1m) would equate to approximately (£0.4m) to £1.2m (2018: (£0.3m) to £0.9m).
The assumptions used to calculate the revenue accrual have been disclosed within note 2.
At 31 December 2019, trade receivables are shown net of a provision for credit losses of £0.2m (2018: £0.8m), which represents a judgement
made by management of which receivables balances are unlikely to be recovered taking into consideration the ageing of the debt, evidence of
poor payment history or financial position of a particular customer.
Movements in the provision for credit losses were as follows:
At 1 January
Provisions (utilised)/made in the year
At 31 December
31 December
2019
£m
31 December
2018
£m
0.8
(0.6)
0.2
0.6
0.2
0.8
As at 31 December, the analysis of trade and other receivables that were past due but not impaired is as follows:
At 31 December 2018
At 31 December 2019
Neither past
due nor
impaired
£m
31.1
40.2
Total
£m
43.1
47.4
Past due not impaired
0–30 days
£m
30–60 days
£m
60–90 days
£m
90–120 days
£m
>120 days
£m
9.1
4.0
0.3
2.1
1.2
0.7
1.3
0.3
0.1
0.1
The Group’s standard payment terms are typically 15 days (2018: 15 days)
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Financial Statements
Notes to the Consolidated Financial Statements continued
17. Trade and other payables and borrowings
Non-current
Deferred consideration in relation to the acquisition of Decision Technologies Limited
Lease liabilities
Current
Trade payables
Non-trade payables and accrued expenses
Lease liabilities
Deferred income
Borrowings
31 December
2019
£m
31 December
2018
£m
4.8
32.5
37.3
4.7
–
4.7
31 December
2019
£m
31 December
2018
£m
46.3
3.6
1.9
0.4
–
52.2
49.2
5.5
–
0.2
15.0
69.9
Deferred consideration in relation to the acquisition of Decision Technologies Limited is detailed in note 27.
As a result of click based revenue being recognised in the period that the lead is generated, an accrual for the cost of sales, such as partner
revenue share agreements, relating to the revenue accrued at the year end date (see note 16) is included within trade payables.
In September 2018, the Group renegotiated a new 3 year revolving credit facility of £100m in committed funds provided in equal parts by
Lloyds Bank PLC and Barclays Bank PLC with half-yearly covenant testing based on adjusted leverage and interest cover ratios. There is the
possibility to extend this facility for 2 additional years, i.e. up to September 2023, on agreement with the lenders. The Group also has an
accordion option to apply to the banks for up to an additional £100m of committed funds. As at 31 December 2019, the Group had £nil (2018:
£15.0m) drawn down under the facility. The remaining balance of the upfront arrangement fees, totaling £0.4m, is held within prepayments.
18. Deferred tax liabilities
Deferred tax assets and liabilities are attributable to the following:
Intangible assets acquired relating to acquisition of Decision Technologies Limited
Share schemes
Goodwill related to MoneySavingExpert.com
Accelerated capital allowances
Deferred tax liability at 31 December
31 December
2019
£m
31 December
2018
£m
1.1
(0.1)
9.4
0.4
10.8
1.1
(0.1)
9.2
(0.1)
10.1
The above deferred tax liability relating to the goodwill of MoneySavingExpert.com is due to the amortisation of this balance within the
individual accounts of the Company which are prepared under a different accounting framework, FRS 102, whereas the consolidation is
prepared in line with IFRS. The recognition of a deferred tax liability within these consolidated accounts is to reflect the tax benefit already
claimed by the Group on the goodwill balance shown.
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Moneysupermarket.com Group PLC Annual Report and Accounts 2019
The following table illustrates the movement in the deferred tax liabilities during the year:
At 1 January
Temporary differences on:
Intangible assets acquired relating to acquisition of Decision Technologies Limited
Intangible assets
Share schemes
Goodwill related to MoneySavingExpert.com
Property, Plant and Equipment
At 31 December
31 December
2019
£m
31 December
2018
£m
10.1
–
–
–
0.2
0.5
9.5
1.1
(0.2)
0.6
(1.2)
0.3
10.8
10.1
Deferred tax liabilities arose from the creation of the intangible assets upon the acquisition of Moneysupermarket.com Financial Group
Limited by the Company, and the acquisition of MoneySavingExpert.com. Deferred tax assets arise on share option schemes based on the
expected tax deduction on vesting. Deferred tax assets and liabilities have been calculated at the applicable tax rate enacted at the balance
sheet date of either 19%, 18% or 17% depending on when the temporary timing difference is expected to reverse.
19. Called up share capital
The nominal value of ordinary shares is 0.02p. The holders of ordinary shares are entitled to returns of capital, receive a dividend and vote.
Issued and fully paid
Number of ordinary shares
At the beginning of the year
Issued on exercise of SAYE options
At the end of the year
Nominal value of ordinary shares
At the beginning of the year
Issued on exercise of SAYE options
At the end of the year
2019
2018
536,319,819
256,760
536,179,804
140,015
536,576,579
536,319,819
2019
£
107,264
51
107,315
2018
£
107,236
28
107,264
The Group operates a Long Term Incentive Plan under which conditional nil cost awards of ordinary shares in the Company have been made
to certain Directors and employees of the Group, and an HMRC approved Save As You Earn scheme (‘Sharesave’) is eligible to all employees
(see note 22).
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141
Financial Statements
Notes to the Consolidated Financial Statements continued
20. Financial instruments
Interest rate risk
The Group invests its cash in a range of cash deposit accounts with UK banks. Interest earned therefore closely follows movements in the
Bank of England base rate. A movement of 1% in this rate would result in a difference in annual pre-tax profit of £0.2m (2018: £0.5m) based on
Group cash, cash equivalents and financial instruments at 31 December 2019. At the balance sheet date, £15.5m was invested with Lloyds
Banking Group, this being the most invested with any one bank.
Fair values
The Group’s financial assets and liabilities are principally short-term in nature, and therefore their fair value is not materially different from
their carrying value. The valuation method for the Group’s financial assets and liabilities can be defined as follows:
Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2:
Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or
indirectly (i.e. derived from prices).
Inputs for the asset or liability that are not based on observable market data (unobservable inputs).
Level 3:
All investments fall under Level 3 as the fair value is measured using the latest unquoted share price of recent transactions, with updates
made as required considering market conditions at year end. A reconciliation is provided in Note 15. All other financial assets and liabilities are
held at amortised cost and other financial liabilities respectively in accordance with IFRS 9. There have been no transfers between levels in the
year.
The Directors consider that the carrying amounts of financial assets and financial liabilities recorded at amortised cost in the financial
statements approximate their fair values.
Effective interest rates
In respect of interest-earning financial assets, the following table indicates their effective interest rates at the year end date:
Cash and cash equivalents
31 December 2019
31 December 2018
Effective
interest rate
0.61%
£m
24.2
Effective
interest rate
0.21%
£m
44.8
Credit risk
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in a financial loss to the Group. The Group
has adopted a policy of only dealing with creditworthy counterparties as a means of mitigating risk of financial loss from default. The Group’s
exposure is continuously monitored by the credit control team and finance management.
Of the top 75% of the Group’s providers by revenue, approximately 23% (2018: 30%) of these are UK quoted companies with the remainder
being a mixture of larger UK independent companies and overseas owned or quoted companies. At the balance sheet date, the five largest
trade receivables, by provider, accounted for 22% (2018: 18%) of the total trade receivables balance of £47.4m (2018: £43.1m) and the largest
individual balance was £3.3m (2018: £1.9m).
The Group does not consider it has any material contracts with providers in any one channel.
Liquidity risk
Liquidity risk refers to the risk that the Group will encounter difficulty in meeting the obligations associated with its financial liabilities. The
Group manages liquidity risk by maintaining adequate reserves and banking facilities by continuously monitoring forecast and actual cash
flows. Details of additional undrawn facilities that the Group has at its disposal to further reduce liquidity risks are set out below:
Unsecured bank loan facilities with a maturity date of 13 September 2023
– amount drawn
– amount undrawn
31 December
2019
£m
31 December
2018
£m
–
100.0
15.0
85.0
In September 2018, the Group renegotiated a new 3 year revolving credit facility for an amount of £100m in committed funds provided in
equal parts by Lloyds Bank PLC and Barclays Bank PLC with half-yearly covenant testing based on adjusted leverage and interest cover ratios.
The Group has the possibility to extend this facility for 2 additional years, i.e. up to September 2023. The Group also has an accordion option
to apply to the banks for up to an additional £100m of funds. Interest is payable on the new facility at a rate of LIBOR plus an applicable
margin rate based on the adjusted leverage of the Group.
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Exposure to liquidity risk
The following are the remaining contractual maturities of financial liabilities at the reporting date. The amounts are gross and undiscounted.
31 December 2019
Non derivative financial liabilities
Deferred consideration
Trade payables
Lease liabilities
At 31 December 2019
Carrying
amount
£m
4.8
46.3
34.4
85.5
Total
£m
< 2 months
£m
2 - 12 months
£m
1 - 2 years
£m
2 - 5 years
£m
> 5 years
£m
Contractual cash flows
(4.8)
(46.3)
(34.4)
(85.5)
(1.4)
(46.3)
(0.3)
(48.0)
-
-
(1.6)
(1.6)
(3.4)
-
(2.0)
(5.4)
-
-
(8.4)
(8.4)
-
-
(22.1)
(22.1)
21. Group management of capital
The Group’s objectives when managing capital are:
•
to safeguard the entity’s ability to continue as a going concern, so that it can continue to provide returns for shareholders and benefits for
other stakeholders; and
to provide an adequate return to shareholders by pricing products and services commensurately with the level of risk.
•
The Group sets the amount of capital in proportion to risk. The Group manages the capital structure and makes adjustments to it in the light
of changes in economic conditions and the risk characteristics of the underlying assets. In assessing the level of capital all components of
equity are taken into account, i.e. share capital, retained earnings and reserves (where applicable). The table below summarises the carrying
value of each component.
Carrying value
Share capital
Retained earnings and reserves
Total
As at
31 December
2019
£m
As at
31 December
2018
£m
0.1
199.3
199.4
0.1
200.4
200.5
In line with internal capital management requirements, the Group manages its cash balances by, where possible, depositing them with a
number of financial institutions to reduce credit risk. The table below summarises the credit rating of each financial institution that held cash
at 31 December 2019.
Credit rating
Barclays Bank Plc
Lloyds Bank Plc
HSBC Bank Plc
2019
A
A+
AA-
2018
A
A+
AA-
One way in which the Group manages capital is utilising the revolving credit facility, as set out in note 17.
Management of capital focuses around the Group’s ability to generate cash from its operations. In order to maintain or adjust the capital
structure, the Group may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares, or sell assets
to raise funds. The Group believes it is meeting its objectives for managing capital as funds are available for reinvestment where necessary as
well as being in a position to make returns to shareholders where this is felt appropriate.
There were no changes to the Group’s approach to capital management during the year.
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Financial Statements
Notes to the Consolidated Financial Statements continued
22. Share-based payments
Share Incentive Plan scheme (‘SIP’)
Upon listing, the Company granted £3,000 of ordinary shares at the price of £1.70 per ordinary share to each eligible employee free of charge.
If an employee left within one year of listing, all these ordinary shares were forfeit; between one and two years of listing, 50% were forfeit;
between two and three years of listing, 20% were forfeit; and after three years of listing, none were forfeit. 948,184 shares were issued under
the Share Incentive Plan scheme in 2007. On 31 July 2010 eligible employees became entitled to receive their allocation of free shares.
1,769 (2018: 3,538) shares have been withdrawn from the trust by employees during the period and a further 23,540 remain held in trust
(2018: 25,309).
Long-Term Incentive Plan scheme (‘LTIP’)
During 2015, conditional awards were made over 1,934,670 ordinary shares under the Moneysupermarket.com Group PLC Long-Term
Incentive Plan scheme to senior employees (‘2015 LTIPs’). Under this scheme, up to 70% of the award vests at the end of a three-year period
dependent upon the achievement of a specified average growth rate in adjusted earnings per share from 31 December 2014 to 31 December
2017, and up to 30% of the award vests at the end of a three-year period dependent upon the total shareholder return (‘TSR’) of the Company
relative to a comparator group of defined companies. On 30 April 2018 and 10 September 2018 the awards vested at 68.37% of the maximum
following 96.2% achievement of the TSR performance criteria and 56.45% of the adjusted earnings per share performance criteria.
During 2016, conditional awards were made over 1,190,535 ordinary shares under the Moneysupermarket.com Group PLC Long Term
Incentive Plan scheme to senior employees (‘2016 LTIPs’). Under this scheme, up to 70% of the award vests at the end of a three year period
dependent upon the achievement of a specified average growth rate in adjusted earnings per share from 31 December 2015 to 31 December
2018, and up to 30% of the award vests at the end of a three year period dependent upon the total shareholder return (‘TSR’) of the Company
relative to a comparator group of defined companies. On 21 March 2019, the awards lapsed in full having not achieved the performance
criteria for either TSR or adjusted earnings per share.
During 2017, conditional awards were made over 1,304,728 ordinary shares under the Moneysupermarket.com Group PLC Long Term
Incentive Plan and the Moneysupermarket.com Group PLC 2017 Long Term Incentive Plan scheme to senior employees (‘2017 LTIPs’). Under
this scheme, up to 80% of the award vests at the end of a three year period dependent upon the achievement of a specified average growth
rate in adjusted earnings per share from 31 December 2016 to 31 December 2019, and up to 20% of the award vests at the end of a three
year period dependent upon the total shareholder return (‘TSR’) of the Company relative to a comparator group of defined companies.
During 2018, conditional awards were made over 1,722,223 ordinary shares under the Moneysupermarket.com Group PLC 2017 Long Term
Incentive Plan scheme to senior employees (‘2018 LTIPs’). Under this scheme, up to 80% of the award vests at the end of a three year period
dependent upon the achievement of a specified average growth rate in adjusted earnings per share from 31 December 2017 to 31 December
2020, and up to 20% of the award vests at the end of a three year period dependent upon the total shareholder return (‘TSR’) of the Company
relative to a comparator group of defined companies.
During 2018, conditional awards were made over 346,628 ordinary shares under the Moneysupermarket.com Group PLC 2018 Restricted
Share Award Plan to senior employees deemed key to delivering the Reinvent strategy (‘2018 RSA’). Under this scheme, 50% of the award vests
at the end of a two year period and 50% of the award vests at the end of a three year period, subject, in each case, to the participant being
employed on the relevant vesting date, and not, on or prior to that vesting date, having been issued with or having given notice to terminate
employment with the Group.
During 2019, conditional awards were made over 1,514,690 ordinary shares under the Moneysupermarket.com Group PLC 2017 Long Term
Incentive Plan scheme to senior employees (‘2019 LTIPs’). Under this scheme, up to 80% of the award vests at the end of a three year period
dependent upon the achievement of a specified average growth rate in adjusted earnings per share from 31 December 2018 to 31 December
2021, and up to 20% of the award vests at the end of a three year period dependent upon the total shareholder return (‘TSR’) of the Company
relative to a comparator group of defined companies.
During 2019, a one-off grant over 164,600 forfeitable shares was made to a Director to take account of compensation relinquished from the
previous employer. The shares are held in trust and their release is subject to malus and clawback provisions, with release of shares in
tranches from June 2019 to March 2021, subject to the Director being employed on the relevant release date.
Sharesave scheme
During 2015, the Group granted options under the existing HMRC approved Moneysupermarket.com Group PLC Sharesave Scheme available
to all employees. The scheme allows employees to save an amount of their net pay into a savings account each month and, at the end of the
three-year period, choose to either receive back their savings or use them to buy ordinary shares in the Company at a discounted exercise
price. The exercise price for the 2015 Sharesave options was fixed at 264.0p per share. On 1 November 2018 the options became exercisable,
enabling participants to buy shares at the exercise price of 264.0p. The market price of a share on 1 November 2018 was 299.50p
During 2016, the Group granted further options under the existing HMRC approved sharesave scheme available to all employees, on the same
basis as the grant in 2015. The exercise price for the 2016 Sharesave options was fixed at 240.0p per share.
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During 2017, the Group granted further options under the existing HMRC approved sharesave scheme available to all employees, on the same
basis as the grants in 2015 and 2016. The exercise price for the 2017 Sharesave options was fixed at 256.0p per share.
During 2018, the Group granted further options under the existing HMRC approved sharesave scheme available to all employees, on the same
basis as the grants in 2015, 2016 and 2017. The exercise price for the 2018 Sharesave options was fixed at 231.0p per share.
During 2019, the Group granted further options under the existing HMRC approved sharesave scheme available to all employees, on the same
basis as the grants in 2015, 2016, 2017 and 2018. The exercise price for the 2019 Sharesave options was fixed at 294.0p per share.
Movements in the year
The following table illustrates the number and weighted average exercise price (‘WAEP’) of, and movements in, share options during the year.
Outstanding at 1 January 2018
LTIP awards made during the year
LTIP awards vested and exercised during the year
LTIP awards forfeited during the year
Outstanding at 31 December 2018
LTIP awards made during the year
LTIP awards vested and exercised during the year
LTIP & Restricted Share awards forfeited during the year
Outstanding at 31 December 2019
Number
3,473,603
2,068,851
(839,277)
(1,009,229)
3,693,948
1,679,290
(50,791)
(1,468,027)
3,854,420
The following table lists the inputs to the Black-Scholes models and Monte Carlo simulations used for the schemes for the year ended
31 December 2019:
Fair value at grant date (£)
Share price (£)
Exercise price (£)
Expected volatility (%)
Expected life of option/award (years)
Weighted average remaining contractual life (years)
Expected dividend yield (%)
Risk-free interest rate (%)
2019
Sharesave
2018
Sharesave
2017
Sharesave
1.60
3.43
2.94
77.1
3.0
2.8
3.3
0.4
1.30
2.89
2.30
72.0
3.0
1.8
3.7
0.9
1.53
3.18
2.56
77.2
3.0
0.8
3.1
0.1
2019
LTIP
3.71
3.71
0.0
74.5
3.0
2.8
0.0
0.8
2018
LTIP/RSA
2.91
2.91
0.0
70.2
3.0
2.3
0.0
0.8
WAEP
£0.00
£0.00
£0.00
£0.00
£0.00
£0.00
£0.00
£0.00
£0.00
2017
LTIP I/II
3.39
3.39
0.0
84.5
3.0
1.3/1.4
0.0
0.2
Expected volatility has been estimated by considering historic average share price volatility for the Company or similar companies. Staff
attrition has been assessed based on historic retention rates.
The share option charge in the Consolidated Statement of Comprehensive Income can be attributed to the following types of share option and
share award:
Long Term Incentive Plan scheme (LTIP) and Restricted Share Award (RSA)
Sharesave scheme
31 December
2019
£m
31 December
2018
£m
1.2
0.4
1.6
0.4
0.4
0.8
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Financial Statements
Notes to the Consolidated Financial Statements continued
23. Leases
Leases as lessee (IFRS 16)
The Group has significant leases of property for offices. The London office lease was signed on 22 July 2016 for a period of 15 years, with a
lease start date of 1 June 2017. There was an 18 month rent free period included in the agreement. The Manchester office lease was signed
on 7 May 2019 for a period of 15 years, with a lease start date of 7 May 2019. There was a 36 month rent free period included in the
agreement.
i. Right-of-use assets
Right-of-use assets related to leased properties that do not meet the definition of investment property are presented as property, plant
and equipment.
2019
Balance at 1 January
Depreciation charge for the year
Additions to right-of-use assets
Balance at 31 December
Amounts recognised in profit or loss relating to lease expenditure totals £3.7m (2018: £2.8m).
ii. Amounts recognised in profit or loss
2019 – Leases under IFRS 16
Depreciation charge for the year
Interest on lease liabilities
2018 – Operating leases under IAS 17
Lease Expense
iii. Amounts recognised in statement of cash flows
Total cash outflow for leases
Land and
Buildings
£m
27.4
(2.5)
4.8
29.7
Total
£m
27.4
(2.5)
4.8
29.7
2019
£m
2.5
1.2
2.8
2019
£m
1.8
24. Pensions and other post-employment benefit plans
The Group operates a defined contribution pension scheme calculated on base salary. The assets of the scheme are held separately from
those of the Group in an independently administered fund. The amounts charged to the Consolidated Statement of Comprehensive Income
represent the contributions payable to the scheme in respect of the accounting period. In the year ended 31 December 2019 £1.8m of
contributions were charged to the Consolidated Statement of Comprehensive Income (2018: £1.7m). As at 31 December 2019 £nil (2018: £nil)
of contributions were outstanding on the balance sheet.
25. Commitments and contingencies
The Group is committed to incur capital expenditure during 2020 on office fixtures and fittings, and property, plant and equipment of £1.4m
(2018: £nil). Along with most companies of our size, the Group is a defendant in a small number of disputes incidental to its operations and
from time to time is under regulatory scrutiny.
As a leading website operator, the Group occasionally experiences operational issues due to errors in operating procedures or technology
which result in incorrect or incomplete product or customer data being transferred to or from providers. These issues can in some instances
lead to customer detriment, dispute and potentially cash outflows. The Group has a Professional Indemnity Insurance Policy in order to
mitigate liabilities arising out of events such as this.
There is a cross-guarantee held between Moneysupermarket.com PLC, MoneySavingExpert.com Limited, MoneySuperMarket.com Limited,
Moneysupermarket.com Financial Group Limited and Moneysupermarket.com Financial Group Holdings Limited in relation to balances owed
to Barclays Bank PLC and Lloyds Bank PLC. The maximum amount owed during the year was £40.0m (2018: £40.0m) and the amount owed as
at 31 December 2019 was £nil (2018: £15.0m).
In aggregate, the commitments and contingencies outlined above are not expected to have a material adverse effect on the Group.
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26. Related party transactions
The Group has the following investments in all of its subsidiaries, joint ventures and associates (which are all included in the Consolidated
Financial Statements):
MoneySuperMarket.com Financial Group Limited
MoneySuperMarket.com Limited
MoneySuperMarket.com Financial Group Holdings Limited
MoneySavingExpert.com Limited
TravelSuperMarket.com Limited
InsureSuperMarket.com Limited
Mortgage 2000 Limited
MoneySuperMarket Limited
Decision Technologies Limited
Sellmymobile.com Limited
Townside Limited
Country of
incorporation
Ownership
interest %
Principal activity
UK
UK
UK
UK
UK
UK
UK
UK
UK
UK
UK
100
100
100
100
100
100
100
100
100
100
100
Holding company
Internet price comparison
Holding company
Personal finance website
Dormant
Dormant
Financial intermediary services
Dormant
Internet price comparison
Internet price comparison
Internet price comparison
MoneySuperMarket.com
Financial Group Limited
MoneySuperMarket.com Limited
MoneySuperMarket Financial
Group Holdings Limited
MoneySavingExpert.com Limited
TravelSuperMarket.com Limited
InsureSuperMarket.com Limited
Mortgage 2000 Limited
MoneySuperMarket Limited
Decision Technologies Limited
Sellmymobile.com Limited
Townside Limited
Aggregate
capital
reserves
£m
Profit/
(loss) for
the year
£m
28.6
53.8
110.6
115.9
87.0
63.5
-
-
0.2
-
8.5
-
-
-
38.8
-
-
-
-
2.5
-
-
Registered office address
MoneySuperMarket House, St David’s
Park, Ewloe, Chester, UK, CH5 3UZ
MoneySuperMarket House, St David’s
Park, Ewloe, Chester, UK, CH5 3UZ
MoneySuperMarket House, St David’s
Park, Ewloe, Chester, UK, CH5 3UZ
One Dean Street, London, UK, W1D 3RB
MoneySuperMarket House, St David’s
Park, Ewloe, Chester, UK, CH5 3UZ
MoneySuperMarket House, St David’s
Park, Ewloe, Chester, UK, CH5 3UZ
MoneySuperMarket House, St David’s
Park, Ewloe, Chester, UK, CH5 3UZ
MoneySuperMarket House, St David’s
Park, Ewloe, Chester, UK, CH5 3UZ
First Floor, High Holborn House, 52-54
High Holborn, London, WC1V 6RL
First Floor, High Holborn House, 52-54
High Holborn, London, WC1V 6RL
First Floor, High Holborn House, 52-54
High Holborn, London, WC1V 6RL
Class of
shares
held
Ownership
31 December
2019
Ownership
31 December
2018
Ordinary
100%
100%
Ordinary
100%
100%
Ordinary
100%
100%
Ordinary
Ordinary
100%
100%
100%
100%
Ordinary
100%
100%
Ordinary
100%
100%
Ordinary
100%
100%
Ordinary
100%
100%
Ordinary
100%
100%
Ordinary
100%
100%
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. The list above represents all companies within the Group. All companies within the Group
are registered at the addresses shown above. The Company’s registered office is disclosed on page 107. All shareholdings with all subsidiaries
are ordinary shares.
Moneysupermarket.com Group PLC has committed to continue to provide support to all of its subsidiaries for any short term day to day cash
management, if required.
Sellmymobile.com Limited and Townside Limited and Decision Technologies Limited aligned its financial reporting date to the rest of the
Group during 2019.
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Financial Statements
Notes to the Consolidated Financial Statements continued
26. Related party transactions continued
Transactions with key management personnel
In addition to their salaries, the Group also provides non-cash benefits to Directors and Executive Officers. Directors and Executive Officers
also participate in the Group’s Long-Term Incentive Plan.
Robin Freestone, Mark Lewis, Scilla Grimble, Sarah Warby, Andrew Fisher, Caroline Britton, Sally James, Genevieve Shore and Bruce Carnegie-
Brown in total received dividends from the Group totalling £14,503 (2018: £23,500). Prior year figure is not a like-for-like comparison as
Matthew Price received dividends in 2018 but was not a Director in 2019.
There were no amounts or any future commitments outstanding to the Company as at 31 December 2019 (2018: nil).
Key management personnel compensation
Key management, defined as the executive management team, received the following compensation during the year:
Short-term employee benefits
Share-based payments
Post-employment benefits
31 December
2019
£m
31 December
2018
£m
2.6
0.9
0.3
3.8
2.8
0.2
0.3
3.3
In addition to the above, the executive management team received a bonus of £2.0m (2018: £2.3m) in relation to the reporting period.
Other related party transactions
During the year, the Group purchased £0.6m (2018: £nil) worth of services from Podium Solutions Limited in relation to the development of
digital solutions for the mortgages channel journey on the Group’s website. Balances outstanding as at 31 December 2019 in relation to the
above purchases were £0.3m (2018: £nil). All outstanding balances with the above related party are priced on an arm’s length basis and have
been settled in cash within one month of the reporting date.
27. Acquisition of a subsidiary
On 9 August 2018, the Group acquired 100% of the share capital of Decision Technologies Limited for consideration of £45.3m.
Decision Technologies Limited is a leading operator in the home communications sector, operating in both the Business to Business (‘B2B’)
and Business to Consumer (‘B2C’) segments.
Consideration transferred
The following table summarises the acquisition date fair value of each major class of consideration transferred.
Cash
Deferred consideration
Total consideration transferred
£m
40.6
4.7
45.3
Deferred consideration
The Group issued £4.7m of loan notes paying a 1.5% coupon as additional deferred consideration. This was discounted at a rate of 1.5%
recognised as a liability at the date of acquisition with a fair value of £4.7m. At 31 December 2018 the outstanding balance of this liability
was £4.7m.
Acquisition related costs
The Group incurred acquisition-related costs of £1.7m on legal fees and due diligence costs in 2018. These costs are included in
‘administrative expenses’.
Identifiable assets acquired and liabilities assumed
The following table summarises the recognised amounts of assets acquired and liabilities assumed at the date of acquisition.
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Assets acquired and liabilities
Property, plant and equipment
Intangible assets
Trade and other receivables
Cash
Trade and other payables
Deferred tax liability
Total identifiable net assets acquired
£m
0.1
8.7
5.7
6.8
(5.6)
(1.1)
14.6
Measurement of fair values
The valuation techniques used for measuring the fair value of material assets acquired were as follows.
Assets acquired
Valuation technique
Intangible assets – domain names
Intangible assets – technology
Relief-from-royalty method and multi-period excess earnings method: The relief-from-royalty method
considers the discounted estimated royalty payments that are expected to be avoided as a result of the
domain names being owned. The multi-period excess earnings method considers the present value of net
cash flows expected to be generated by the domain names, by excluding any cash flows related to
contributory assets. This was determined by an independent valuation to identify the fair value of the
domain names (marketing related intangible assets) at £6.6m.
A rebuild cost valuation method has been used to determine the value of the technology asset. This was
developed in conjunction with Senior Technology professionals and uses a cost assumption for
developers inclusive of a profit margin as would be the case in an external build contracted to develop an
equivalent platform. A degree of obsolescence has also been assumed within the costs to reflect the
advancements in technology since it has been built.
Goodwill
Goodwill arising from the acquisition has been recognised as follows.
Consideration transferred
Fair value of identifiable net assets
Goodwill
£m
45.3
(14.6)
30.7
The goodwill is attributable mainly to the experience and processes in place within Decision Technologies Limited for servicing B2B customers,
which can be leveraged into new sectors, alongside the synergies expected to be achieved from integrating the company into the Group’s
existing platforms to build a competitive B2B offering in new sectors. None of the goodwill recognised is expected to be deductible for
tax purposes.
Update on acquisition accounting 2019
The acquisition accounting has now been finalised with no adjustments made to the net assets or goodwill balance within the allowed
measurement period.
28. Post balance sheet events
There are no significant post balance sheet events.
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Financial Statements
Company Balance Sheet
at 31 December 2019
Fixed assets
Investments
Total fixed assets
Current assets
Debtors (including amounts falling due in more than one year £0.3m, 2018: £0.3m)
Cash at bank and in hand
Total current assets
Creditors: amounts falling due within one year
Net current assets
Creditors: amounts falling due after one year
Net assets
Capital and reserves
Share capital
Share premium
Reserve for own shares
Other reserves
Profit and loss account
Shareholders’ funds
31 December
2019
£m
31 December
2018
£m
Note
4
5
6
9
181.7
181.7
579.5
0.2
579.7
(439.5)
140.2
–
181.7
181.7
576.0
0.7
576.7
(336.1)
240.6
–
321.9
422.3
0.1
204.7
(2.9)
16.9
103.1
321.9
0.1
204.0
(2.6)
16.9
203.9
422.3
The Financial Statements were approved by the Board of Directors and authorised for issue on 19 February 2020. They were signed on its
behalf by:
Mark Lewis
Chief Executive Officer
Scilla Grimble
Chief Financial Officer
Registered number: 6160943
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Moneysupermarket.com Group PLC Annual Report and Accounts 2019
Statement of Changes in Equity
for the year ended 31 December 2019
At 1 January 2018
Profit for the year
Total comprehensive income
New shares issued
Purchase of shares by employee trusts
Exercise of LTIP awards
Distribution in relation to LTIP
Equity dividends
Share-based payments
At 31 December 2018
Loss for the year
Total comprehensive income
New shares issued
Purchase of shares by employee trusts
Exercise of LTIP awards
Equity dividends
Share-based payments
At 31 December 2019
Share
capital
£m
0.1
Share
premium
£m
203.3
–
–
0.0
–
–
–
–
–
0.1
–
–
0.0
–
–
–
–
0.1
–
–
0.7
–
–
–
–
204.0
–
–
0.7
–
–
–
–
204.7
Reserve for
own shares
£m
(3.5)
–
–
–
(0.8)
1.7
–
–
–
(2.6)
–
–
–
(0.5)
0.2
–
–
(2.9)
Other
reserves
£m
16.9
–
–
–
–
–
–
–
–
Profit and
loss account
£m
63.4
198.7
198.7
–
–
(1.7)
(0.2)
(56.5)
0.2
Total
£m
280.2
198.7
198.7
0.7
(0.8)
–
(0.2)
(56.5)
0.2
16.9
203.9
422.3
–
–
–
–
–
–
–
16.9
(0.8)
(0.8)
–
–
(0.2)
(100.0)
0.2
103.1
(0.8)
(0.8)
0.7
(0.5)
–
(100.0)
0.2
321.9
Reserve for own shares
The reserve for the Company’s own ordinary shares comprises the cost of the Company’s ordinary shares held by the Group through employee
trusts. At 31 December 2019, the Group held 331,720 ordinary shares (2018: 348,787) at a cost of 0.02p per share (2018: 0.02p) through a Share
Incentive Plan trust for the benefit of the Group’s employees.
The Group also held 296,362 shares (2018: 182,553) through an Employee Benefit Trust at an average cost of 326.95p per share (2018: 322.66p) for
the benefit of employees participating in the various Long Term Incentive Plan schemes.
Other reserves
The other reserves balance represents the merger reserve of £16.9m generated upon the acquisition of Moneysupermarket.com Financial Group
Limited by the Company, as discussed below, 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.
Upon the acquisition of Moneysupermarket.com Financial Group Limited, a merger reserve of £16.9m for 45% of the book value transferred from a
company under common control was recognised.
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151
Financial Statements
Notes to the Company Financial Statements
1. Accounting policies
Basis of preparation
Moneysupermarket.com Group PLC (the ‘Company’) is a public company limited by shares and incorporated and domiciled in England, UK.
The registered office is disclosed on page 107.
These Financial Statements were prepared in accordance with Financial Reporting Standard 102 The Financial Reporting Standard applicable
in the UK and Republic of Ireland (FRS 102). The presentation currency of these Financial Statements is sterling. All amounts in the Financial
Statements have been rounded to the nearest £100,000. These Financial Statements are prepared on the historical cost basis.
No profit and loss account is presented for the Company as permitted by section 408 of the Companies Act 2006. The loss after tax for the
Company was £0.8m (2018: profit of £198.7m) which included dividends received of £nil (2018: £200m).
FRS 102 grants certain first-time adoption exemptions from the full requirements of FRS 102, and the following exemptions were taken in the
2015 Financial Statements:
• Business combinations – Business combinations that took place prior to transition date have not been restated.
The Company is the ultimate parent undertaking of the Group and also prepares Consolidated Financial Statements. The Consolidated
Financial Statements are prepared in accordance with International Financial Reporting Standards as adopted by the EU and are available to
the public and may be obtained from MoneySuperMarket House, St. David’s Park, Ewloe, Chester, CH5 3UZ. In these Financial Statements, the
Company is considered to be a qualifying entity for the purposes of this FRS and has applied the exemptions available under FRS 102 in
respect of the following disclosures:
• Cash Flow Statement and related notes; and
• Key Management Personnel compensation.
As the Consolidated Financial Statements include the equivalent disclosures, the Company has also taken the exemptions under FRS 102
available in respect of the following disclosures:
• Certain disclosures required by FRS 102.26 Share Based Payments; and,
• The disclosures required by FRS 102.11 Basic Financial Instruments and FRS 102.12 Other Financial Instrument Issues in respect of
financial instruments not falling within the fair value accounting rules of Paragraph 36(4) of Schedule 1.
• The disclosures required by FRS 102.33.1A Related Party Disclosures.
The accounting policies set out below have, unless otherwise stated, been applied consistently to all periods presented in these Financial Statements.
Use of estimates and judgements
The preparation of Financial Statements requires management to make judgements, estimates and assumptions that affect the application of
accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in
which the estimate is revised and in any future periods affected.
There are no significant estimates or judgements made in preparation of these Financial Statements.
Investments
Investments are shown at cost less provision for impairment.
Bank borrowings
Interest-bearing bank loans and overdrafts are recorded at the proceeds received, net of direct issue costs. Finance charges, including direct
issue costs, are accounted for on an accruals basis in profit or loss using the effective interest method and are added to the carrying amount
of the instrument to the extent that they are not settled in the period in which they arise.
Own shares held by Employee Benefit Trust
Transactions of the Company-sponsored Employee Benefit Trust are treated as being those of the Company and are therefore reflected in the
Company Financial Statements. In particular, the trust’s purchases and sales of shares in the Company are debited and credited directly to equity.
Share-based payment transactions
The Company’s share schemes allow employees to acquire ordinary shares in the Company. The fair value of share awards made is recognised
as an employee expense with a corresponding increase in equity. The fair value is measured at award date and spread over the period during
which the employees become unconditionally entitled to the awards. The fair value of the awards made is measured using an option valuation
model, taking into account the terms and conditions upon which the awards were made. The Company’s share-based payment expenses
relate solely to employees of the Company. Share-based payment expenses in respect of other Group employees are recognised in the
company that employs them.
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Dividends
Dividends receivable are recognised when the Company’s right to receive payment is established. Dividends payable to the Company’s
shareholders are recognised as a liability and deducted from shareholders’ equity in the period in which the shareholders’ right to receive
payment is established.
Taxation
Income tax expense comprises current and deferred tax. It is recognised in the profit and loss account except to the extent that it relates to
items recognised directly in equity, in which case it is recognised in equity.
Current tax is the expected tax payable on the taxable income for the year, using tax rates in force for the year, and any adjustment to tax
payable in respect of previous years.
Deferred tax is provided on timing differences which arise from the inclusion of income and expenses in tax assessments in periods different
from those in which they are recognised in the Financial Statements. Deferred tax is not recognised on permanent differences arising because
certain types of income or expense are non-taxable or are disallowable for tax or because certain tax charges or allowances are greater or
smaller than the corresponding income or expense.
Deferred tax is measured at the tax rate that is expected to apply to the reversal of the related difference, using tax rates enacted or
substantively enacted at the balance sheet date. Deferred tax balances are not discounted.
Deferred tax assets are recognised only to the extent that is it probable that they will be recovered against the reversal of deferred tax
liabilities or other future taxable profits.
2. Share-based payments
The analysis and disclosures in relation to share-based payments are given in the Consolidated Financial Statements in note 22.
3. Staff numbers and cost
The average number of persons employed by the Company (including Directors) during the year, analysed by category, was as follows:
Administration
The aggregate payroll costs of these persons were as follows:
Wages and salaries
Social security costs
Other pension costs
Share-based payments
Number of
employees
2019
Number of
employees
2018
2
2
2019
£m
0.9
0.1
0.2
0.5
1.7
2018
£m
1.0
0.1
0.2
0.2
1.5
In addition to the above, bonuses of £0.7m (2018: £0.7m) were payable in relation to the reporting period. One Director exercised share
options during the period (2018: none) and the total gain on exercise of these options was £146,700 (2018: £nil). Directors’ remuneration is
disclosed on pages 85-103.
4. Investments
Cost and net book value:
At 31 December 2018 and 31 December 2019
Shares in
subsidiary
undertakings
£m
181.7
The investment represents the Company’s holding in Moneysupermarket.com Financial Group Holdings Limited, which was obtained via a
share for share exchange during 2012 in which the Company exchanged its existing shareholding in Moneysupermarket.com Financial Group
Limited for the entire share capital of Moneysupermarket.com Financial Group Holdings Limited.
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Financial Statements
Notes to the Company Financial Statements continued
5. Debtors
Amount due from subsidiary undertakings
Other debtors
Deferred tax asset (note 7)
6. Creditors: amounts falling due within one year
Borrowings
Amount owed to subsidiary undertakings
Accruals
7. Deferred tax
At beginning of year
Profit and loss account credit
Deferred tax asset at end of year
The elements of deferred taxation are as follows: short-term timing differences
Total deferred tax asset
8. Dividends
Declared and paid dividends on ordinary shares:
Prior year final dividend
Special dividend
Interim dividend
Total dividend paid in the year
Proposed for approval (not recognised as a liability at 31 December):
Final dividend
31 December
2019
£m
31 December
2018
£m
579.2
–
0.3
579.5
575.5
0.2
0.3
576.0
31 December
2019
£m
31 December
2018
£m
–
438.5
1.0
439.5
15.0
320.4
0.7
336.1
31 December
2019
£m
31 December
2018
£m
0.3
–
0.3
0.3
0.3
0.3
–
0.3
0.3
0.3
pence per
share
31 December
2019
£m
pence per
share
31 December
2018
£m
8.10
7.46
3.10
43.4
40.0
16.6
7.60
–
2.95
18.66
100.0
10.55
8.61
46.3
8.10
40.7
–
15.8
56.5
43.2
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Moneysupermarket.com Group PLC Annual Report and Accounts 2019
9. Called up share capital
The following rights attached to the shares in issue during the year:
Ordinary shares
The holders of ordinary shares were entitled to returns of capital, receive a dividend and vote.
Issued and fully paid
Number of ordinary shares
At the beginning of the year
Issued on exercise of SAYE options
At the end of the year
Nominal value of ordinary shares
At the beginning of the year
Issued on exercise of SAYE options
At the end of the year
2019
2018
536,319,819
256,760
536,179,804
140,015
536,576,579
536,319,819
2019
£
107,264
51
107,315
2018
£
107,236
28
107,264
The Group has a Long Term Incentive Plan under which conditional nil cost awards of ordinary shares in the Company have been made to
certain Directors and employees of the Group, and an HMRC approved Save As You Earn scheme (Sharesave) is eligible to all employees (see
note 22 of the Consolidated Financial Statements).
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Financial Statements
Shareholder Information
Registered office
Moneysupermarket House
St David’s Park
Ewloe
Chester CH5 3UZ
Telephone: +44 (0)1244 665700
Website: http://corporate.moneysupermarket.com
Registered number
No. 6160943
Company Secretary
Katherine Bellau
Financial advisers/stockbrokers
Credit Suisse Securities (Europe) Limited
One Cabot Square
London E14 4QJ
Barclays Bank PLC
5 North Colonnade
London E14 4BB
Auditor
KPMG LLP
15 Canada Square
London E14 5GL
Solicitors
Herbert Smith Freehills LLP
Exchange House
Primrose Street
London EC2A 2EG
Addleshaw Goddard LLP
One St Peter’s Square
Manchester M2 3DE
Principal bankers
Lloyds Banking Group plc
City Office
PO Box 1000, BX1 1LT
Barclays Bank PLC
3 Hardman Street
Manchester M3 3AX
Financial PR
The Maitland Consultancy Limited
3 Pancras Square
London N1C 4AG
Registrar
Link Asset Services
The Registry
34 Beckenham Road
Beckenham
Kent BR3 4TU
Enquiring about your shareholding
If you want to ask, or need any information, about your shareholding,
please contact our registrar, Link Asset Services, by:
Telephone: 0371 200 1536 (UK) (Calls are charged at the standard
geographic rate and will vary by provider. Lines are open 8.30am
– 5.30pm Monday – Friday)
+44 (0) 371 664 0300 (overseas)
E-mail: moneysupermarket@linkgroup.co.uk
Alternatively, if you have internet access, you can access the Group’s
shareholder portal at www.moneysupermarket-shares.com where
you can view and manage all aspects of your shareholding securely.
Investor relations website and share price information
The investor relations section of our website, http://corporate.
moneysupermarket.com, provides further information for anyone
interested in the Group. In addition to the Annual Report and share price,
Company announcements including the half-year and full-year results
announcements and associated presentations are also published there.
Dividend mandates
If you wish to have dividends paid directly into a bank or building
society account, you should contact our registrar (see contact
details above) or visit the Group’s shareholder portal at
www.moneysupermarket-shares.com where you can set up or amend
a dividend mandate. This method of payment removes the risk of
delay or loss of dividend cheques in the post and ensures that your
account is credited on the due date.
Dividend reinvestment plan (‘DRIP’)
You can choose to reinvest dividends received to purchase further
shares in the Company through a DRIP. A DRIP application form is
available from our registrar (see contact details above).
Share dealing service
You can buy or sell the Company’s shares in a simple and convenient
way via the Link share dealing service either online (www.
linksharedeal.com) or by telephone (0371 664 0445). Calls are
charged at the standard geographic rate and will vary by provider.
Lines are open 8.00am – 4.30pm Monday – Friday.
Please note that the Directors of the Company are not seeking to
encourage shareholders to either buy or sell shares in the Company.
Shareholders in any doubt about what action to take are
recommended to seek financial advice from an independent financial
adviser authorised by the Financial Services and Markets Act 2000.
Electronic communications
You can elect to receive shareholder communications electronically
by contacting our registrar (see contact details above). This will save
on printing and distribution costs, creating environmental benefits.
When you register, you will be sent a notification to say when
shareholder communications are available on our website and you
will be provided with a link to that information.
Cautionary note regarding forward-looking statements
This Annual Report 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 Group 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, Disclosure
Guidance and Transparency Rules and applicable law, the Company
undertakes no obligation to update, revise or change any forward-
looking statements to reflect events or developments occurring on or
after the date of this Annual Report.
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Moneysupermarket.com Group PLC Annual Report and Accounts 2019
Financial Calendar
Overview
Declaration date of 2019 final dividend
Announcement of 2019 full-year results
Ex-dividend date of 2019 final dividend
Record date of 2019 final dividend
Trading update
Annual General Meeting
Payment date of 2019 final dividend
Half-year end
Announcement of 2020 half-year results
Trading update
Financial year end
20 February 2020
20 February 2020
2 April 2020
3 April 2020
16 April 2020
7 May 2020
15 May 2020
30 June 2020
16 July 2020
*October 2020
31 December 2020
Announcement of 2020 full-year results
*February 2021
*
Exact dates to be confirmed.
Further copies of this Annual Report are available from the Company’s registered office, or may be accessed on the investor relations section
of the Group’s website at http://corporate.moneysupermarket.com.
Moneysupermarket.com Group PLC
Telephone: 01244 665700
Web: http://corporate.moneysupermarket.com
Registered in England No. 6160943
Moneysupermarket.com Group PLC Annual Report and Accounts 2019
157
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Moneysupermarket.com Group PLC
Telephone: 01244 665700
Web: http://corporate.moneysupermarket.com
Registered in England No. 6160943
Registered Office: Moneysupermarket House,
St David’s Park, Ewloe, Chester CH5 3UZ