Growth remained sluggish at HomeServe's (HSV) core UK business in the six months through to September. The group, which provides emergency insurance cover and repair services, added around 131,000 new UK customers at the half-year mark, but the net figure was still flat from a year ago. Although UK revenues were on the rise, per capita net fee income dropped 6 per cent, partly due to lower-margin introductory offers. Chief executive Richard Harpin says management isn't sure whether the group can achieve ongoing customer growth in the UK, but it was costs associated with US expansion that restricted adjust pre-tax profit to £26.2m - again, broadly flat on the 2014 half year.
In the US the group signed six new affinity partnerships with utility companies. This helped increase both revenues and customer numbers by a quarter, although profitability was held in check due to a commensurate rise in operating costs.
HomeServe's largest Spanish partner Endesa turned in a strong performance on the back of rising customer numbers and increased income per head, which fed through into an 89 per cent increase in adjusted operating profit to €5.3m (£3.7m).
Broker Peel Hunt expects adjusted EPS of 21.1p in the year ending March 2016, up from 18.6p in 2015.
HOMESERVE (HSV) | ||||
|---|---|---|---|---|
| ORD PRICE: | 416p | MARKET VALUE: | £1.28bn | |
| TOUCH: | 415-417p | 12-MONTH HIGH: | 447p | LOW: 321p |
| DIVIDEND YIELD: | 2.8% | PE RATIO: | 23 | |
| NET ASSET VALUE: | 86p* | NET DEBT: | 77% | |
| Half-year to 30 Sep | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2014 | 242 | 25.3 | 5.6 | 3.63 |
| 2015 | 262 | 21.3 | 5.0 | 3.80 |
| % change | +9 | -16 | -11 | +5 |
Ex-div: 10 Dec Payment: 8 Jan *Includes intangible assets of £418m, or 136p a share | ||||
