Float may buoy Moneysupermarket brands

Rumours of a possible stock market floatation for Moneysupermarket.com were the talk of the industry last week, with pundits forecasting an even more prominent role for the price comparison website and growth for its broker-facing brands.

With its Mortgage 2000 sourcing system, M2 mortgage club, paaleads.com lead generation firm and m2-d&p packager all in line for potential cash injections, there could be big implications for the mortgage industry.

And further growth of the website itself could change the face of the market as it offers consumers a way of cutting out the middle man and comparing mortgages without the help of advisers.

Stuart Glendinning, managing di-rector of Moneysupermarket.com, de-clined to speculate on whether a floatation is on the cards but stresses the importance of lead generation for brokers, as consumers turn to the internet to research financial products.

He says: “Five or six years ago, people thought the internet would kill off the broker market but that has not happened. In fact, it has made life easier for brokers as they can now buy leads from online lead generation companies.

“But some brokers such as John Charcol and London & Country have a strong internet presence and substantial market shares. This is not good for smaller brokers as it is increasingly difficult for them to source business.”

As Glendinning points out, Moneysupermarket.com is probably the only consumer price comparison website that employs its own team of brokers. And the leads it sells through paaleads. com allow small brokers to compete with larger firms that have a strong online presence.

He says: “Lead generation will be important in the future. Paaleads.com is a core part of our business.”

Andy Pratt, managing director of Alexander Hall, says: “In the next few years, there will be huge consolidation in the mortgage market. Bigger players such as Moneysupermarket.com will win as they can invest in their brands. “If the website grows, it will put paa-leads.com in the best position of all the lead generation firms.”

Pratt adds: “While people are comfortable buying products such as unsecured loans, insurance and credit cards online, they would rather see brokers when arranging their mortgages be-cause they want advice.”

Moneysupermarket.com’s broker subsidiary firms are also likely get a boost if it floats.

Kevin Friend, strategic partnerships director at Evaluate Technologies, says M2000 could become a dominant player.

He says: “M2000, Evaluate and En-terprise’s Edge will become the leading sourcing systems.”

But Mark Lofthouse, chief executive officer of Mortgage Brain, rubbishes such expectations.

He says: “The growth of Moneysupermarket.com has mainly been in its business-to-consumer operations. Its broker services are small in relation to the business. It already makes substantial profits and hasn’t invested much in these brands up to now. There is no reason to think floatation will change anything.”

And Richard Griffiths, chief executive of Network Data, says: “The firm’s focus will remain on its business-to-consumer operations. It has not shown much interest in expanding its packager and sourcing system.

“There is growing competition in the arena of price comparison websites and it will have its work cut out protecting its market share on the web. That’s where I see investment going.”

Simon Baker, operations manager at paaleads.com’s rival lead generation firm Leadbay, believes a floatation would pave the way for the website to become an international brand.

He says: “Floatation would mean Moneysupermarket.com could grow quickly and expand into other areas. More capital would allow it to expand into Europe.”

Despite an increasing number of price comparison websites entering the market, Glendinning is confident Moneysupermarket.com will maintain its top position.

He says: “It’s a difficult market to break into. There are huge costs in-volved and not many other websites will become successful.”