Homeserve's (HSV) shares jumped 10 per cent on the back of these full-year figures after the domestic repairs insurer showed signs of recovering from the damage caused by a Financial Services Authority (now the Financial Conduct Authority) investigation into alleged product mis-selling. Headline figures were also distorted by impairment charges and provisions - underlying operating profit actually fell by a more manageable 16 per cent at £107.6m.
UK customer numbers fell to 2.3m - but that was in line with expectations and reflected cuts in marketing activity, as management concentrated on improving governance and controls and testing new marketing materials. Meanwhile, policy retention rates remained steady at 79 per cent and income per customer rose 7 per cent to £106, reflecting higher premiums and a change in the policy mix. In the US, customer numbers grew 25 per cent to 1.3m, although income per customer fell 1 per cent to $112 (£73.6). While customer numbers in the small Spanish operation rose 50 per cent to 400,000, lifting adjusted operating profit there from £2.8m to £3.1m. Customer numbers were slightly ahead in France at 900,000, while adjusted operating profit rose on a like-for-like basis by 8 per cent to £22m.
Broker Panmure Gordon expects pre-tax profit of £83m for 2014, giving EPS of 18.2p (from £105m and 23p in 2013).
| HOMESERVE (HSV) | ||||
|---|---|---|---|---|
| ORD PRICE: | 250p | MARKET VALUE: | £825m | |
| TOUCH: | 250-253p | 12-MONTH HIGH: | 256p | LOW: 136p |
| DIVIDEND YIELD: | 4.5% | PE RATIO: | 19 | |
| NET ASSET VALUE: | 114p* | NET DEBT: | 11% | |
| Year to 31 Mar | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2009 | 304 | 81.0 | 90.0 | 35.5 |
| 2010 | 369 | 102 | 115 | 44.0 |
| 2011 | 467 | 105 | 24.0 | 10.3 |
| 2012 | 535 | 138 | 35.4 | 11.3 |
| 2013 | 547 | 66.5 | 12.9 | 11.3 |
| % change | +2 | -52 | -64 | - |
Ex-div: 3 Jul Payment: 1 Aug *Includes intangible assets of £397m, or 120p a share | ||||
