HomeServe enjoys strong results on US expansion

HOME services provider HomeServe saw a 13% growth in operating profit last year together with a 21% rise in revenue driven by an expansion of the business.

Revenue for the Walsall-based firm grew to £369m with pre-tax profit rising to £104.4m.

Helped by an expansion of its US operation – aided by a series of strategic acquisitions – the company grew its policy database to 10.3m policies, up from 9.2m in 2009, while its customer base grew to 4.7m from 4.3m.

With the US business included, the company now has access to around 68m households, up from 56m in 2009.

HomeServe has also reported a 24% increase in dividend per share, plus a 14% growth in earning per share.

It saw a 3% customer growth in the UK together with a retention rate of 82.5%, down very slightly on last year’s 83%.

International operating profits saw a 72% increase to £8.7m from £5.1m last year. The recent acquisition of US-based National Grid Energy Services is expected to grow the contract business significantly.

The strategy of expanding the business has seen a doubling its US footprint, lead by long term affinity partner agreements with National Grid USA, Piedmont Natural Gas and Southern California Gas.

It has also signed similar agreements with Agbar in Spain.

In its final results statement, the company said its exit from its UK Emergency Services operation was now complete. The move has resulted in a loss of £42m in discontinued operations.

Richard Harpin, HomeServe chief executive, said: “We are pleased to announce another year of strong growth.

“This strong financial performance has been driven by an 8% increase in customers worldwide, with high levels of retention in all countries demonstrating the resilience of our business model.”

He said the company had achieved its growth targets both in the UK and internationally, with affinity partner households in the US doubling to more than 20m and the financial contribution from international operations increasing by 72%.   

Continuing confidence in the strength of the business together with its attractive cash generation has seen the board propose a total dividend for the year of 44p, a year on year increase of 24%. 

“The new financial year has started positively with all of our membership businesses performing in line with our expectations and we look forward to another year of strong growth,” added Mr Harpin.