Despite the squeeze on consumers' discretionary income, repair insurance provider Homeserve managed to increase customer numbers from 8 per cent to 4.4m, and policies by 14 per cent to 9.6m.
Chief executive Richard Harpin believes there is still plenty of room for expansion, too, pointing out that 17.6m UK properties have no home assistance cover. The group has also been successful in selling existing policyholders added cover, meaning income per customer grew by 15 per cent, while high customer satisfaction was reflected in broadly steady retention levels of 83 per cent.
Homeserve has also been busy extending its customer base outside the UK. Policy numbers in the US jumped 40 per cent to 629,000, although the business there remained marginally loss-making. The group also entered the US gas utility segment through agreements with SEMCO and Piedmont Gas, which expanded the number of marketable US households from 8.6m to 10.2m, and is in discussions with other US utilities.
Meanwhile, the exit from its non-core emergency services division is nearly complete, although remaining operations recorded an operating loss of £8m. Additional closure costs of £15m are expected in the second half.
Broker Panmure Gordon expects full-year pre-tax profits of £96m and EPS of 105p.
| HOMESERVE (HSV) | ||||
|---|---|---|---|---|
| ORD PRICE: | 1,549p | MARKET VALUE: | £1,012m | |
| TOUCH: | 1,545-1,549p | 12-MONTH HIGH: | 1,752p | LOW: 826p |
| DIVIDEND YIELD: | 2.4% | PE RATIO: | 120 | |
| NET ASSET VALUE: | 295p* | NET DEBT: | 37% | |
| Half-year to 30 Sep | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2008 | 169 | 13.8 | 15.4 | 10.5 |
| 2009 | 174 | 18.1 | 19.3 | 11.5 |
| % change | +3 | +31 | +25 | +10 |
Ex-div: 2 Dec Payment: 4 Jan *Includes intangible assets of £237m, or 363p a share | ||||
