"We are pleased to report results showing strong momentum as our strategy delivers. 2019 was a year of continued transformation into a tech and data-enabled business, positioning us well for medium term growth. We enter 2020 in a strong strategic position and we are encouraged that the market has validated our AutoSave concept.
Our progress over the last 12 months, which includes the growth of our AutoSave business to over 300,000 customers and the successful launch of our customer focused proposition in GoCompare, has demonstrated our ability to invest and innovate to revolutionise the industry."
Dear Shareholders,
It has been another exciting year as we continue to evolve the Group through the growth of our AutoSave business, whilst generating further momentum on our core GoCompare business. This was especially the case in the second half of the year, as we innovated in the price comparison sector with the relaunch of our GoCompare brand proposition.
We are revolutionising the price comparison industry with the first real innovation in years and we continue to position ourselves for growth beyond insurance comparison.
I am always proud of the GoCo Group team and all their achievements. The Group has a consistent focus on saving customers time and money, and we are all working relentlessly to ensure we have a differentiated offer in an incredibly competitive market. Across all our locations we are unlocking people’s potential to outperform, and I am thankful for the hard work and commitment of our staff.
Innovating on the core business
GoCompare operates in a highly competitive price comparison market and we have taken steps to strengthen our position as the comparison service that looks after its customers at every stage of the insurance purchase process. This year, we launched our £250 excess offer for car insurance with a new brand proposition ‘When It Matters, GoCompare’ to drive awareness and preference, and to lay the foundations for a stronger ongoing customer relationship over time.
Although early days, the initial results are positive; car insurance quote conversion has improved and an underlying car insurance revenue growth of +4% in Q41 meant we finished the year with good momentum. Despite this investment in the second half of the year, our relentless focus on improving conversion and our continued disciplined approach to profitability mean we have been able to increase marketing margin through the year. We also reallocated spend away from generic Google search to above-the-line advertising focused on driving longer-term brand awareness and preference, leaving the GoCompare business in a far better position to deliver long-term profit growth.
We are on a mission to change the way inertia-hit consumers shop for energy and the Group now operates two AutoSave brands, Look After My Bills and weflip, that fundamentally address this. We remain committed to growing our AutoSave business and are pleased to be progressing against our aim to rapidly scale customer numbers whilst carefully managing the cost of customer acquisition. We achieved in excess of 300,000 live AutoSave customers2 in 2019, which was more than 80,000 (+37%) ahead of our original expectations. Net growth of 125,000 (+70%) live customers2 for the Group’s AutoSave segment in less than six months demonstrates a strong consumer appetite for a service that reduces the hassle of switching.
The performance of our AutoSave segment and growth in customer numbers put us in a strong position to diversify Group revenue and transform the Group into a higher and more sustainable margin business over the medium term.
The financial performance of the Rewards business was disappointing in 2019, primarily driven by challenges in organic search and the commercial relationships with News UK and Reach plc driving significantly less revenue than we had expected. The challenges on organic search led to revenue from this channel falling by almost 50% in the year.
During the year we welcomed Stefano Perino as the Head of our Rewards business which has invigorated the strategic direction of the business and ensured clear focus has been placed on recovering our historic strength in organic search. This focus began to drive some early signs of improvement towards the end of the year and we are confident that performance will improve in 2020 and beyond. With the renewed focus on organic search optimisation, we have deprioritised the work on white label voucher sites.
We continued to invest in our people, brands and tech platform across the Group. Throughout 2019, we continued to develop our proprietary tech platform SaveStack™ to provide more savings opportunities to more people than ever before. SaveStack™ is a service-based architecture that enables us to innovate faster and reach more consumers wherever they are, however and whenever they want, including through brands outside of the Group.
At the heart of SaveStack™ is our Group data strategy. We launched our awardwinning Group Data Platform which delivers customer insights to drive SaveStack™, enabling us to better understand our customers across all brands. We have also future-proofed our foundations for growth through migration to Microsoft Azure, improving site sustainability and availability whilst increasing response times. We welcomed Seb Chakraborty to the Group CTO position in 2019. Seb joins the senior leadership team and brings a wealth of agile- based tech experience. His technical and experienced contribution will help to drive the next stage of the Group’s transformation.
We remain at the forefront of innovation and have made ongoing improvements to our underlying architecture this year with the SaveStack™ development leading to our first B2B partnerships. Integrating our SaveStack™ technology into leading banking apps – including Virgin Money UK PLC and Bud – aims to make the switching process hassle-free and opens a significant opportunity for their customers to save money by switching. These are industry first partnerships and something we’re proud to be leading the way on. I’m excited to see our platform services grow into an exciting industry-leading service over the medium term.
Our employees are fundamental in driving our businesses forward with their unique skills and passion, helping us to differentiate ourselves from our competition, as well as dictating the pace and success of the Group.
We continue to work hard to ensure that GoCo Group is a great place to work. In total, 99% of staff engaged in our 2019 annual staff survey, which is a fantastic achievement. We believe engaged employees are more involved and invested in their roles, which boosts productivity, customer satisfaction and retention. Some 92% take the opportunity to share knowledge with others, 88% have a clear understanding of how their department contributes to the success of the organisation and 97% of our staff are ready and willing to participate in change. All these metrics reinforce that we have the right team in place to drive our business forward.
Our GoFurther Academy is in its second year and has grown beyond the degree-apprenticeship programme it started out as. We remain committed to addressing the skills gap in industry and now focus on training and development for existing GoCompare staff as well as new staff; all part of our vision to find, train and develop the best talent in the UK, and help position South Wales as a tech hotspot. We believe our significant investment will have long-term benefits for talent development, the economy and the growing tech community in South Wales.
The Board remains confident of meeting its expectations for the 2020 full year, with performance skewed towards the second half of the year.
2019 has been a year of continued progress as we evolve into a customer- focused tech business on a mission to help people find the right products, saving them time and money. Over the year, we have seen good discipline across the core business and transformative innovation where we see opportunity for growth.
We delivered in excess of 300,000 AutoSave customers in 2019, which was ahead of the Group’s original expectations. We continue to work hard to deliver services that reduce hassle and address the needs of infrequent switchers.
We have seen encouraging progress in our core Price Comparison business. GoCompare’s £250 excess proposition has been well received by customers, leading to a strong increase in car insurance conversion and driving underlying revenue growth of +4%1 in Q4 2019 (vs. Q4 2018) for this part of the business.
We use our technology and scale to inform, inspire and support our partners to drive up standards across the industry. In 2019, we built a strong tech platform to significantly grow our customer base across all our businesses and deliver value for our shareholders.
In 2020, we will continue to highlight our ambition to save as many people as possible, as much money as possible – year after year. Going forward, we are well positioned to unlock our potential, drive growth and execute our Group strategy.
Matthew Crummack
GoCo Group CEO
Notes: 1. Underlying car insurance revenue growth excluding any one-off adjustments. 2. Live customers are defined as those who have provided full switching authority to enable a switch, net of churned customers.
