Moneysupermarket aims to please with divi pledge

Internet price comparison site Moneysupermarket.com took the bold step of lifting its dividend policy today as it sought to wipe away the memory of last year's disastrous flotation.

Small investors who bought into the firm as it joined the stock market have seen their investment halve, but were offered some comfort today.

Moneysupermarket intends to pay out 50% of all future profits to investors, although the interim dividend is held at 1.3p.

The company floated at 170p last July, netting founder Simon Nixon £102 million. He still has a 55% stake. The shares tumbled as low as 59p in the market malaise, and were down 2p at 78½p today.

Nixon said: "We've assessed the level of cash we have got and believe we have enough for our medium-term needs."

Moneysupermarket revenues rose 27% to £99 million in the six months to the end of June, with profits up 14% to £30 million.

"In the results we have delivered since the float, we have done exactly what we said we would do," said Nixon.

With banks reluctant to lend, the number of suppliers vying for business has fallen. "There is less supply of credit and we don't have control over the supply side," said Nixon. "But on the insurance and travel side our range has increased."

Analysts are nervous that Moneysupermarket's business model is easy to copy, and rivals could take market share. So far the firm remains the premier player, with 62 million visitors in the past six months, a rise of 39%.

Nixon, a former mortgage adviser with a love of flash cars, is one of the richest young entrepreneurs in Britain.

The float was handled by Credit Suisse, earning the investment bank criticism in the City.