A double-digit full-year sales increase, a 7 per cent rise in adjusted pre-tax profits, no noticeable increase in customer cancellations, a rising operating margin, no furloughs, and a hefty dividend increase into the bargain. HomeServe (HSV) appears to be operating in a parallel universe.
It may seem counter-intuitive, but anecdotal evidence suggests that the group, which provides emergency trade services for households, could be deriving some commercial benefit from the current lockdown, at least according to Richard Harpin, HomeServe’s founder and chief executive.
The numbers back him up, even though some business units experienced softening demand midway through March due to government directives to minimise unnecessary contact. The subscription retention rate was stable at 82 per cent, while the overall number of customers edged up slightly from the first half of FY2020. Crucially, the retention rate has been in line with historical norms in April and May.
JPMorgan Cazenove gives adjusted EPS of 43.6p for March 2021, rising to 47.5p in FY2022.
| HOMESERVE (HSV) | ||||
| ORD PRICE: | 1,191p | MARKET VALUE: | £3.99bn | |
| TOUCH: | 1,188-1,191p | 12-MONTH HIGH: | 1,352p | LOW: 756p |
| DIVIDEND YIELD: | 2% | PE RATIO: | 38 | |
| NET ASSET VALUE: | 190p* | NET DEBT: | 79% † | |
| Year to 31 March | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2016** | 0.63 | 82.6 | 19.6 | 12.7 |
| 2017 | 0.79 | 98.3 | 24.0 | 15.3 |
| 2018 | 0.90 | 123 | 30.2 | 19.1 |
| 2019 | 1.00 | 140 | 32.7 | 21.4 |
| 2020 | 1.13 | 138 | 31.7 | 23.6 |
| % change | +13 | -1.1 | -3 | +10 |
| Ex-div: | 2 Jul | |||
| Payment: | 3 Aug | |||
| *Includes intangible assets of £1bn, or 301p a share **Excludes special dividend of 30p a share paid in Jul 2015. †Includes lease liabilities of £59.3m. | ||||
