Securities of iSelect Limited (ASX: ISU) have fallen 55.5% on April 23, 2018 while the group has witnessed tough trading conditions continued through the last two weeks of March and the first three weeks of April. Particularly, market volatility and lower than expected leads due to changes in the marketing mix led the Health and Energy & Telco verticals witness a challenging scenario. Health experienced a softening in overall market demand following low industry rate rises and challenging market conditions given ongoing industry affordability issues while Energy & Telco was impacted by higher digital customer acquisition costs and lower leads. The year to date (YTD) performance of Health (against same period of FY17) has seen leads decline by 11% while there was 33% increase in marketing spend; while the YTD number of leads for Energy & Telco has been relatively flat but YTD EBIT is substantially below forecast. On the other hand, Life & General Insurance has performed as per the plan.

Given the above, ISU has now revised FY18 underlying EBIT guidance to be in the range between $8 million to $12 million (previously $26 million to $29 million). The group CEO resignation has also contributed to the downfall. Scott Wilson has tendered his resignation as Managing Director & CEO of iSelect, effective immediately, and the market was able to sense this given the group’s performance and latest updates. The group is now looking for a new Managing Director & CEO, and in the interim Brodie Arnhold (currently Independent non-executive Director and Chair of the Audit & Risk Committee) has been appointed Acting-CEO. Meanwhile, the group has also updated about other board changes.For instance, Nadine Lennie will commence the role of Chief Financial Officer on 2 July 2018.

ISU now expects its technology investments to deliver returns in FY19 while its Net Promoter Score has increased to 49. The group is enhancing iConnect’s machine learning / artificial intelligence capabilities, and its two CRMs have been combined into a single ‘customer focused’ platform, which will increase customer lifetime value and higher customer numbers from FY19. Despite the soft performance, the group’s balance sheet depicts no debt and has $21.1 million cash. It will be crucial to watch the stock movement going forward, while ISU has been down 46.4% in last year (as at April 20, 2018).

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