19th May 2015 07:02
LONDON (Alliance News) - HomeServe PLC Tuesday reported higher profit for its last financial year as revenue was buoyed by growth in customer numbers across its markets, and it said it would pay a special dividend of GBP97 million as it predicted "good growth" in the current year as it focuses on expanding in the US.
The home emergency repairs and assistance company reported a pretax profit of GBP76.7 million for the year to end-March, up from GBP24.4 million a year earlier when it had booked GBP46.7 million in costs related to a regulator probe into its UK business and a resulting fine.
Excluding exceptional items, pretax profit rose to GBP85.4 million from GBP84.1 million, as revenue grew to GBP584.2 million, from GBP568.3 million.
The result marks a turnaround for a business that was focused on the UK market, but was hit in early 2014 by a GBP30 million fine from the UK financial regulator for mis-selling insurance policies, failing to investigate complaints adequately and for not being focused enough on compliance.
That severely hit its UK business in 2014, although it is now growing in the UK once more, albeit from a lower base. It added 0.3 million gross new customers in the UK in the last financial year, up from 0.2 million a year earlier, meaning it now has 2.1 million customers earning in a profit of GBP56.4 million.
Its focus now is on growing in the US, and it said increased marketing spend drove customer growth of 26% there, up from 19% a year earlier.
It also agreed an affinity deal with Lyonnaise des Eaux in France and grew customer numbers by 37% in Spain to 1.1 million.
"This has been a very good year for HomeServe, with customer numbers increasing from 5.5 million to 6.3million. We have grown our profit, whilst at the same time significantly increasing marketing investment in the USA. In the UK we have delivered on our plans and have a strong business with 2.1m customers. Customer satisfaction and retention are increasing and we will continue to invest in technology to deliver even better service levels and efficiencies. The USA continues to be our most significant opportunity,2 Chief Executive Richard Harpin said.
Homeserve raised its ordinary dividend to 11.5 pence, from 11.3p, and said it will pay a special dividend of 30.0p in July.
"We expect good growth in 2016 and the board's decision to pay a special dividend of 30 pence per share in July 2015 reflects confidence in our future prospects," Harpin said.
By Steve McGrath; [email protected]; @stevemcgrath1
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