HomeServe (HSV) is guiding that adjusted pre-tax profit for the year ending 31 March 2020 will come in ahead of consensus expectations and 12 per cent higher than the prior year at £181m.
Offering subscription-based home assistance, the ‘membership’ business recorded 10 per cent growth in North American customer numbers and a “substantial rise” in net income per customer. Meanwhile, Checkatrade revenue has jumped by around 30 per cent. Demand for tradespeople has been falling since mid-March on the back of the Covid-19 lockdown, but bear in mind that the ‘home experts’ division only accounts for a tenth of total sales.
As it continues emergency repair work, HomeServe has not furloughed any workers, but is scaling back marketing. The final dividend remains under consideration. The group ended the year with £515m of net debt (including £55m in lease liabilities), equivalent to 1.9 times cash profits (Ebitda) and within its target multiple range of between one and two and well below a covenant ceiling of three.
