HomeServe to cut 7% of its UK workforce
WALSALL home emergency business HomeServe is looking to reduce its workforce by about 200 as it faces a drop of customer numbers in 2012 of around 8%.
The firm, which published its interim management statement today for the period from October 1 last year, says that in the UK market it is “making progress in reinvigorating our customer focus and restarting marketing activity, although this is taking longer than we originally anticipated”.
HomeServe, which provides home emergency insurance cover and domestic repairs, says client retention in the UK remains strong. But it says the reduction in total customer numbers in financial year 2012 could now be around 8% and it expects renewal revenues in financial year 2013 to be lower by up to £10m.
The firm say that as a result of having fewer customers in the UK and changes to its marketing and customer contact strategies, it has commenced a consultation period with employees regarding a reduction in the UK headcount of around 200. The figure represents around 7% of its UK employees.
“We now estimate the one-off costs in the UK, including the re-organisation and redundancy costs and additional third party support will be around £20m in FY 12, compared to our previous guidance of £10m. The reduced headcount is expected to reduce operating costs by up to £5m in FY13,” it said.
Meanwhile, the firm is continuing to develop and grow its international operations, taking full ownership of France’s Doméo with the purchase of Veolia’s 51% shareholding in December signing a partnernership deal in the US with WaterOne, a utility that provides water to more than 100,000 households in Kansas.
Last week HomeServe announced the appointment of Martin Bennett as group chief operating officer. His initial priority will be in the UK business on claims and network management, underwriting, systems and efficiency.
The firm’s net debt at December 31 was £109.7m (December 2010: £59.2m), which includes the cash consideration of £83m relating to the purchase of Veolia’s shareholding in Doméo, which completed on December 7.
