Rivals squeeze Moneysupermarket

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Piggybank with cards and moneyThe battle of price comparison websites has claimed a major casualty after leading player Moneysupermarket.com said sales growth stalled during July.

Shares in the company, whose advertising campaign is based on the slogan ''You're So Moneysupermarket'', slumped 15% after rivals launched TV advertising campaigns featuring talking meerkats and a portly opera singer.


It is looking to reverse its fortunes with a new campaign, which it hopes will claw back credit card, savings and mortgage customers who have deserted it after a Government stimulus scheme depressed interest rates.

The company said it is confident in its prospects after posting a 71% surge in pre-tax profits to £15.1 million in first six months of the year.

The Chester-based group, which makes money by directing people to the websites of banks, insurers, airlines, mobile phone operators and utility giants, saw money revenues fall 13% to £27.9 million during its first half. Money transactions fell 14% to 10,484.

It blamed the Government's Funding for Lending Scheme for continued downward pressure on interest rates, which has discouraged people from switching bank account, and less demand from lenders for retail deposits. The scheme offers banks and building societies cheap funding in return for boosting lending.

Earlier this month the group also warned it is losing out in the battle for car and home insurance customers, with visitor numbers and revenues slowing in June after search engine Google changed ''natural search algorithms'' - pushing its website down the rankings in searches. The group said it is making progress on re-gaining natural search positions.

Moneysupermarket also revealed finance director Paul Doughty is quitting after nine years, and will leave by June 2014. It has started the search for his replacement.

Group revenues increased 10% to £112.3 million during the first half, bolstered by its acquisition of money advice website MoneySavingExpert in September 2012. It paid up to £87 million to buy the website from founder Martin Lewis.

MoneySavingExpert generated an extra £8.8 million in revenues and £6.2 million in underlying earnings for the group during the period. Chief executive Peter Plumb said it has proved a "powerful addition" to the business.