The rationale behind HomeServe 's (HSV) business proposition will be readily appreciated by anyone who has ever had to cough up for an emergency plumbing call-out. The emergency repair and maintenance specialist benefited from continued investment in global markets, marketing and digital initiatives in the year to March. The end result: a 12 per cent rise in adjusted cash profit to £123m, which underpinned a double-digit increase in the dividend.
Returns were solid, rather than spectacular, for HomeServe's core domestic market, which accounts for £3 out of every £5 generated as adjusted operating profits. The UK business did manage to bump up its customer base by 3 per cent, while margins and retention rates remain stable. And the group's gas delivery capability increased significantly in October through a deal to acquire Nottingham-based Home Energy Services.
The standout performance, however, came from across the Atlantic, where a surge in revenue and improved margin fed through into an 89 per cent hike in profitability. The US business also managed to grow its client numbers by 17 per cent over the year. The group's footprint stateside is set to expand following the period-end deal to acquire home assistance business Utility Services Partners (USP).
Analysts at Peel Hunt forecast adjusted pre-tax profits for the year to March 2017 of £102m (£93m in FY2016), giving EPS of 23.2p.
| HOMESERVE (HSV) | ||||
|---|---|---|---|---|
| ORD PRICE: | 451.1p | MARKET VALUE: | £1.39bn | |
| TOUCH: | 450.7-451.3p | 12-MONTH HIGH: | 453p | LOW: 356p |
| DIVIDEND YIELD: | 2.8% | PE RATIO: | 23 | |
| NET ASSET VALUE: | 103p* | NET DEBT: | 54% | |
| Year to 31 Mar | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2012 | 535 | 138 | 35.4 | 11.3 |
| 2013 | 547 | 67.0 | 12.9 | 11.3 |
| 2014 | 568 | 24.4 | 3.1 | 11.3 |
| 2015† | 584 | 76.7 | 17.2 | 11.5 |
| 2016 | 633 | 82.6 | 19.6 | 12.7 |
| % change | +8 | +8 | +14 | +10 |
Ex-div: 7 Jul Payment: 1 Aug *Includes intangible assets of £458m, or 149p a share †A special dividend of 30p per share proposed in 2014 was paid to shareholders in July 2015 | ||||
