100% cashback minus £45m

richard@imutual
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100% cashback minus £45m

Post by richard@imutual » Sun Oct 05, 2014 11:05 am

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 :twisted:
- 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 :eek:

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....
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kevinchess1
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Re: 100% cashback minus £45m

Post by kevinchess1 » Sun Oct 05, 2014 11:33 am

I'd like to think that we would have those sorts of profits :shock:
Because we would pay higher cashback rates to ourselves
Would be nice to have the highest rates out there plus 1%
I've never understood why they need so many staff? jobs for the boys/wives.
You need, maybe, 1 person on full time claims and 1 other on CS
But an awful lot of CS could be done by unpaid mods
Might need 1 other person to 'Encourage' the forms but neither Quiditchco or TopcashBabes have those
So, what do those people do all day?
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Re: 100% cashback minus £45m

Post by AAAlphaThunder » Sun Oct 05, 2014 12:15 pm

I, for one trust our reliability.
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AAAlphaThunder
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Re: 100% cashback minus £45m

Post by AAAlphaThunder » Sun Oct 05, 2014 12:18 pm

MSE, FB, Twtter etc have not sent us into overdrive.

We need a Man and a plan to change the game in our favour.
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Re: 100% cashback minus £45m

Post by AAAlphaThunder » Sun Oct 05, 2014 12:58 pm

richard@imutual wrote:- 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 :twisted:
+1
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timco
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Re: 100% cashback minus £45m

Post by timco » Sun Oct 05, 2014 1:25 pm

richard@imutual wrote: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?.
Or indeed pay out to members at all! one of the reasons I have largely stopped using them as getting any cashback tracked or other wise has become such a fight with the.

Don't forget all the £5 they con out of people for "premium" membership.
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richard@imutual
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Re: 100% cashback minus £45m

Post by richard@imutual » Sun Oct 05, 2014 1:37 pm

kevinchess1 wrote:I've never understood why they need so many staff? ....
an awful lot of CS could be done by unpaid mods
I don't doubt that their staff are very capable and hard-working, and help to achieve things that imutual currently doesn't e.g. revenues from retailers, over and above cashback, for special marketing campaigns

But I agree that imutual shouldn't need anything like the same number of employees to achieve similar revenues. I've been developing cashback systems full time for over 11 years now and like to think I've achieved an extremely efficient system. It allows us to manage high volumes of offers and transactions with a large amount of automation and minimal manual intervention.

And I've always thought that we could increasingly rely on 'expert' shareholders to help out with some elements of running the site. This already happens to a certain extent, when our regular members help out newcomers on the forum and make them feel welcome :)

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Re: 100% cashback minus £45m

Post by hugginhill » Sun Oct 05, 2014 9:16 pm

Interesting that the numbers suggest that imutual is paying out a smaller proportion of income than the other two - for the latest year in each case and using the quoted numbers (without checking), iM - 74.05%, QC 79.59%, TCB 87.57%. If I'd been asked (subjectively), I would have gone for (high to low) - iM - QC - TCB (and for reliability the same order).

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Re: 100% cashback minus £45m

Post by richard@imutual » Sun Oct 05, 2014 9:19 pm

To repeat my response to this point that I made here...
Richard is entitled to argue that some costs are fixed, or relatively fixed, so these bear down harder on start-up companies with lesser income stream and I'd agree with him.
Yes, I'd argue that strongly. Most of our time is taken up with managing offer details, making payments, marketing, development and dealing with claims and queries. Apart from claims and queries, all the other activities are largely fixed regardless of the number of members/transactions. As we grow we'll need to devote more resources to tech and marketing, but nowhere near as much as our competitors do.

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Re: 100% cashback minus £45m

Post by hugginhill » Sun Oct 05, 2014 9:34 pm

:wtf: Payout ratio and fixed costs are unrelated. I've clearly touched on a sensitive subject Richard and will back off.

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