HomeServe sees strong end to the year
HOME maintenance provider HomeServe has said it has seen a strong finish to the financial year with high policy renewals and new sales.
In a pre-close trading statement, the Walsall-based company said it expected pre-tax profits to be at the top end of market expectations.
The company announces its results in May.
In the UK, it said trade continued to be strong and it expected to meet customer growth targets of 3% with gross new policy sales of 1.80m, compared to 1.83m last year.
Renewals levels have remained high during February and March and it said it expected a retention rate for the full year of 82.5%, which compares to 83% last year, with total policies at 7.5m, which compares to last year’s 7.05m.
HomeServe said it was also making good progress on customer growth initiatives including a long-term agreement with GB Oils, the leading domestic oil distributor in the UK, to market oil heating breakdown cover.
In Continental Europe it said its French business, Domeo, had had another good year and it was hoping to report customer growth of 13%. Gross new policy sales are in line with last year at 560k with a retention rate of 88%, above last year’s 87.9%. Total policies at the year-end are estimated at 1.90m, above 2009’s 1.57m.
It has replicated its successful UK manufacturer warranty model at SFG, its French warranty business and discussions with potential manufacturer warranty partners are also underway.
The firm’s Spanish business also performed well, with profits from the repair network business reinvested in marketing with Endesa, ending the year with over 90,000 policies, compared with 48,000 last year.
It is also in the process of agreeing marketing plans for the next financial year with new affinity partner Agbar, Spain’s largest water company.
In Belgium, it said it continued to develop relationships with potential partners and had recently conducted a small operational marketing test as it looked to build a policy business in the region.
In the United States it said it had seen good take up levels with its new gas partners, SEMCO Energy and Piedmont Natural Gas, as well as its own brand campaigns.
It said it expected customer growth in excess of 25% and gross new policy sales of 270,000, up from 246,000 last year.
As in 2009, it said it had seen another strong renewals performance with retention rates increasing to 82% for the full year, compared with 80% in 2009.
Discussions with a number of utilities were progressing very well, it added.
“We are very pleased with the continued strong performance of our membership businesses and with an exciting pipeline of business development opportunities, HomeServe is well positioned for future growth,” said the statement.
