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iSelect Ltd shares higher on solid underlying profit growth

One of the best performers on the market today has been the iSelect Ltd (ASX: ISU) share price.

In afternoon trade the price comparison company’s shares are up almost 8% to $1.33 following the release of its half-year results.

Were the results good?

For the six months ending December 31 iSelect reported a 7% increase in revenue on the prior corresponding period to $83.3 million and a 23% increase in underlying earnings before interest and tax (EBIT) to $3.5 million.

Its statutory result wasn’t as flash, though. Due to losses in its connected home business and increased marketing investment in the digital channel, statutory EBIT came in at $0.3 million. This was a sizeable decline on EBIT of $2.8 million a year earlier.

The iSelect board declared an interim fully franked dividend of 1.5 cents per share, in line with FY 2017’s interim dividend.

Looking ahead, management believes that the successful delivery of its key initiatives over the second-half and the expected market growth should allow the company to achieve its previous underlying EBIT guidance range of $26 million to $29 million.

Judging by the market’s reaction today, many investors appear just as confident as iSelect’s management team on this.

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Motley Fool contributor Motley Fool Staff has no position in any stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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