100% cashback minus £45m
Posted: Sun Oct 05 2014 11:05am
Regulars here will know that whenever either of the big 2 cashback "behemoths" publish their accounts, I like to post a summary and commentary (last done here). I do this for two reasons:
- To demonstrate to our shareholders the potential size of our company's market
- To highlight the difference between imutual and traditional companies
The latest company to report is topcashback, and the highlights of their accounts to 31/01/2014 I will pick out are:
- Revenue increased from £30.8m to £37.5m
- Cashback paid out = £32.8m
- Dividends of £1.4m paid to the 2 directors
- £255k paid in corporation tax
- Admin overheads steady at £3.6m. 90 Staff as at 31 Jan
Below you'll see a summary of the respective results for ourselves, Quidco and tcb over the past 5 years. I think the notable points are:
- Total revenues between the big 2 are £320m+ and still increasing! It shows that imutual has a big market to compete in
- Despite being known as "100% cashback sites", they kept £45m of the revenue, £30m of which was spent on overheads and nearly £10m has been taken in dividends.
- £3.7m has been paid out in corporation tax
Comparisons with imutual are difficult, of course, due to the fact that we are really just starting out and are a small fraction of their size. Plus there are things the "big 2" provide that we don't, such as mobile phone apps and insurance comparisons. Nevertheless, we do maintain a similar range of online cashback deals (with only 3 staff) and I'd like to think we've established a reputation amongst our members of being more reliable.
So I think the key question is: how would imutual be different if we achieved a similar size to the big 2? I think we'd differ in a number of ways:
- Lower overheads: we currently operate an equivalent online cashback service for < £100k
- Lower director's remuneration: Of course at some point, I'll need to earn more than the average £8500 annual salary I've taken over the past 4 years but I can't see it ever reaching the heights of £700,000! Unless we merge with Nationwide
- Higher cashback rates. Why generate big profits and the resulting tax bill of £3.7m when you can just increase the % of cashback you pay out to members?
- More reliable. If we had such significant surpluses, why would we ever refuse to pay out a member's cashback unless we had reason to think they had not met the offer conditions?
And how can I be sure that we'd behave so differently? Because we have no outside shareholders. You lot own the company and can keep directors fully accountable. I don't think you'd let me have it any other way
I hope you find the above of interest and that it provides motivation for persuading others to join and support our revolutionary mutual model of cashback.
As ever, I'd welcome your thoughts and questions....
- To demonstrate to our shareholders the potential size of our company's market
- To highlight the difference between imutual and traditional companies
The latest company to report is topcashback, and the highlights of their accounts to 31/01/2014 I will pick out are:
- Revenue increased from £30.8m to £37.5m
- Cashback paid out = £32.8m
- Dividends of £1.4m paid to the 2 directors
- £255k paid in corporation tax
- Admin overheads steady at £3.6m. 90 Staff as at 31 Jan
Below you'll see a summary of the respective results for ourselves, Quidco and tcb over the past 5 years. I think the notable points are:
- Total revenues between the big 2 are £320m+ and still increasing! It shows that imutual has a big market to compete in
- Despite being known as "100% cashback sites", they kept £45m of the revenue, £30m of which was spent on overheads and nearly £10m has been taken in dividends.
- £3.7m has been paid out in corporation tax
Comparisons with imutual are difficult, of course, due to the fact that we are really just starting out and are a small fraction of their size. Plus there are things the "big 2" provide that we don't, such as mobile phone apps and insurance comparisons. Nevertheless, we do maintain a similar range of online cashback deals (with only 3 staff) and I'd like to think we've established a reputation amongst our members of being more reliable.
So I think the key question is: how would imutual be different if we achieved a similar size to the big 2? I think we'd differ in a number of ways:
- Lower overheads: we currently operate an equivalent online cashback service for < £100k
- Lower director's remuneration: Of course at some point, I'll need to earn more than the average £8500 annual salary I've taken over the past 4 years but I can't see it ever reaching the heights of £700,000! Unless we merge with Nationwide
- Higher cashback rates. Why generate big profits and the resulting tax bill of £3.7m when you can just increase the % of cashback you pay out to members?
- More reliable. If we had such significant surpluses, why would we ever refuse to pay out a member's cashback unless we had reason to think they had not met the offer conditions?
And how can I be sure that we'd behave so differently? Because we have no outside shareholders. You lot own the company and can keep directors fully accountable. I don't think you'd let me have it any other way
I hope you find the above of interest and that it provides motivation for persuading others to join and support our revolutionary mutual model of cashback.
As ever, I'd welcome your thoughts and questions....