Moneysupermarket.com, the price comparison web site, is planning to float on the London Stock Exchange for a value of £1 billion despite posting falling pre-tax profits for the last three years.

The company will list at the end of July and is hoping to raise enough cash to repay its net debt, after recently buying out co-founder Duncan Cameron's 47 per cent stake for £162 million. It will also increase its spend on TV and newspaper advertising from £6 million last year to £16 million in 2007.

The company had comtemplated floating in 2004, but pulled back from a listing because of the volatile public markets.

Moneysupermarket.com's directors and staff will retain 50 per cent of the equity in the listed company. The company has recruited Gerald Corbett, the former chief executive at Railtrack and the previous chairman at Woolworths.

Market estimates place moneysupermarket.com's initial market valuation at £1 billion, which equates to nearly ten times its revenue after it posted sales of £104.5 million in its last financial year, up from £68 million in 2005.

Since 2004, pre-tax profits have declined from £15.9 million, to £14.7 million in 2005 to £11.7 million last year. Although in the three months to March 2007, pre-tax profits have risen to £9.6 million compared with £4.1 million in the first quarter of last year. Over the same period, revenues increased from £23.7 million to £39.6 million.

Moneysupermarket.com said this morning that directors are planning to reduce the sum they have taken out of the company, which will boost overall profits.

In 2004, directors retained £1.6 million worth of profits generated from the business. In 2005 this increased to £8.4 million and last year more than doubled to £20.9 million.

Stripping out profit taking, earnings before interest tax depreciation and amortisation (Ebitda), profits have risen from £17.6 million in 2004, to £23.3 million in 2005 and £33 million last year.

The company said this morning that directors' pay will now be benchmarked against other publicly listed companies.

The business was set up seven years ago, in the heyday of Britain’s dotcom boom.

The group operates two companies, moneysupermarket.com and travelsupermarket.com. moneysupermarket.com generates its revenue from fees paid by companies such as banks and from advertising. Online shoppers can compare the rates of mortgages and credit cards for example.

On travelsupermarket.com, the company provides price comparison on flights, car hire, holidays and hotels.

In the last financial year, the two sites attracted 64 million visitors.

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