iSelect announced in a disclosure to the Australian Securities Exchange (ASX) that Innovation Holdings Australia Group (IHA Group) purchased more than 22 million shares in iSelect, taking its stake to 10.15 per cent.
The mortgage brokerage and financial services comparison business said that it understood that the officeholders and/or shareholders in IHA Group appear to be related to its UK-founded competitor, Compare the Market, as well as automotive insurance provider Auto and General Holdings, which iSelect has not listed as a partner.
The business, which compares a range of financial products including credit cards, home loans, insurance and utilities, noted in its ASX announcement that IHA Group has not been in contact with the company.
On Monday (28 May), iSelect’s share price reached a high of $0.665, up from the closing price of $0.55 on Friday.
An iSelect representative was unable to comment on the impact of the connection between the business and its new shareholders.
At the end of April, the company announced the immediate resignation of CEO Scott Wilson, with non-executive director Brodie Arnhold taking on the role of interim CEO until iSelect completes its search for a longer-term replacement.
The comparison service slashed its 2018 underlying earning expectation by 58 per cent to 72 per cent, from between $26 million and $29 million to between $8 million and $12 million.
The updated earnings guidance saw iSelect’s per-share price drop by 55.5 per cent from $1.00 at the close of Friday (20 April) to $0.445 at the close of Monday (23 April).
iSelect admitted in a disclosure to the ASX that it has been trading below expectations, averaging at $1.021 per share from 19 March to 20 April.
It attributed its poor financial performance to market volatility, fewer leads from search engine marketing and higher customer acquisition costs, which particularly impacted its Health and Energy & Telco verticals, while Life & General Insurance has been performing as expected.
iSelect revealed in April that its CMO, Warren Hebard, was reviewing the company’s marketing strategy and mix modelling tools to address lead generation underperformance, while COO Henriette Rothschild was leading efforts to improve business unit performance. Business operations group executive and interim CFO Vicki Pafumi was also heading up efforts to drive operational performance improvement.
Nadine Lennie, who has held numerous public company CFO roles throughout her 20-year financial career, was appointed iSelect’s new CFO earlier this year and is scheduled to take over from the interim CFO on 2 July 2018.