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Health turnaround helps iSelect profit

AAP logoAAP 30/08/2016 By Lisa Robinson

Comparison website iSelect has turned around its first-half loss with a $12.9 million full-year profit following a recovery in its key health insurance business.

The company, which offers comparisons of insurance, finance and utilities plans, slashed its full-year earnings guidance from $26 million to $15-18 million in January because of the impact of high staff costs and reduced health insurance sales.

In February it posted a first-half $4.2 million loss as CEO Scott Wilson said the company was addressing operational issues following a 16 per cent drop in revenue for its health insurance business, which accounts for more than half of iSelect's revenue.

On Tuesday, iSelect said the business restructure has paid off, announcing a $12.9 million profit for the year to June 30, up 34 per cent on the previous year, and earnings before interest and tax of $15 million, up 23 per cent.

iSelect said its health segment returned to growth while revenue in life and general insurance and energy and telecommunications segments increased by around one third.

Total revenue rose nine per cent to $171.9 million.

"The return to solid growth in the health business in the second half demonstrates that we have successfully addressed the strategic and operational issues experienced in the first half, with new structures and systems put in place," Mr Wilson said in a statement.

The company began making dividend payments this year and has already bought back 23.01 million shares, with shareholder approval to purchase a further 25.5 million.

iSelect shares were up 12.5 cents or 9.4 per cent to $1.45 at 1534 AEST - a recovery from their record low of 67 cents in January.

Mr Wilson said shareholder returns will continue to rise in the 2017 financial year and the company expects to generate EBIT of $21-24 million.

"Our strong balance sheet and substantial cash balance ensures we are well placed to maintain our current growth momentum," he said.

iSelect declared a maiden final dividend of 1.5 cents, fully franked, taking the full-year dividend to 2.5 cents.

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