22nd Jan 2009 07:00
Homeserve plc today publishes its Interim Management Statement for the period from 1 October 2008.
UK Membership
In our UK Membership business, which is in its key period for marketing activity, new policy sales have continued to perform well and we remain on target to deliver at least the same level of gross new policy sales as last year. Having announced at our interims that we had seen a slight fall in retention during October and the first part of November, we are pleased to report a stable retention rate and good levels of policy renewals.
Trading in our retail warranties business, which represents a small part of our business overall, remains challenging and we expect this to continue.
The reorganisation of our UK businesses is progressing to plan.
Europe
In France, our joint venture, Domeo, continues to deliver strong growth with good levels of new policy sales and high retention rates.
In Spain, we have signed marketing agreements with Agbar and Acciona, two water utilities, covering an initial period of twelve months. On a combined basis, Agbar and Acciona service a total of approximately 4 million households. On the back of good results from product testing with Endesa we launch our full marketing campaign next month.
Continuing our strategy of international expansion we have acquired SPT, Belgium's leading claims handling and subcontractor repair network, for an initial consideration of €5 million. This acquisition will provide an ideal platform from which to build a policy business in the Benelux region.
USA
Our US business continues to perform well both in terms of new policy sales and retention rates and as previously announced this division will be profitable on a run-rate basis from January 2009. We have seen good take up rates from recent marketing campaigns with both our water and energy partners including California Water, Louisville Water and Progress Energy.
We have signed up another water company affinity partner, Utilities Inc, which will provide access to an additional 156,000 households. We continue to work with other potential partners to increase our footprint of marketable households in the US.
Emergency Services
Conditions in our insurer-facing businesses continue to be challenging in what is an increasingly competitive environment. We have now completed the internal transfer of claims handling and the networks that support our policy holders into UK Membership and the external transfer of our lower margin 2nd fix plumbing business to UK Drainage Network Limited.
These changes will allow a smaller, more focused Emergency Services division to better manage the tougher operating environment and deliver a high quality service for our insurer customers.
Outlook
Overall, our business continues to perform well demonstrating the strength of our business model and continuing attractiveness of our products. The new business developments we have announced today coupled with a solid pipeline of potential future opportunities gives us confidence about delivering growth in the future.
We expect to deliver another year of strong growth and plan to announce our Preliminary Results on 19 May 2009.
22 January 2009
A conference call for analysts will take place at 9am this morning, dial-in details for which can be obtained from Tulchan.
Enquiries:
Homeserve plc
Richard Harpin, CEO
Jonathan Simpson-Dent, CFO
Mathew Wootton, Investor Relations Director
Tel: 01922 427903
TulchanAndrew HonnorStephen MalthouseTel: 0207 353 4200
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