31st Mar 2009 07:00
Homeserve plc today publishes the following statement prior to entering its close period for the year ending 31 March 2009.
UK Membership
We are pleased to report a very good performance for new policy sales and renewals in our UK membership business during the fourth quarter.
We expect to announce gross new policy sales ahead of our expectations at 1.75m (2008:1.68m) and a retention rate of 83% (2008: 85%) for the full year, resulting in a total policy count at the year-end of approximately 7.0m (2008: 6.57m). In particular, sales of combined policies continue to do well and now represent 14% (September 2008: 11%) of our UK customer base.
We have successfully completed the integration of our Plumbing & Drains and Claims Management businesses within UK Membership, achieving additional operational efficiencies and improved levels of customer service.
Continental Europe
Our French business, Domeo, delivered excellent results in February and March and we expect to report another year of strong growth and a total policy count of 1.5m (2008: 1.18m) for the full year.
In Spain, large scale policy marketing with Endesa began in February and the initial results have been promising. Reparalia, our Spanish repair network business, continues to do well on the back of additional volumes from key clients.
USA
In the US we continue to see good take up levels with our newly acquired affinity partners including California Water, Louisville Water and Progress Energy and we will end the year with over 0.5m (2008: 0.36m) policies. The US business will make a profit in the second half and is now profitable on an ongoing basis.
Emergency Services
The remaining insurer-focused businesses within Emergency Services continue to face challenging market conditions resulting in lower volumes and margin pressure. This has been particularly marked within our Property Repair businesses where we have taken additional steps to reorganise our networks to ensure continued profitability despite lower volumes.
These latest actions, combined with the reorganisation of our UK businesses, will result in an exceptional charge for the full year of up to £5m, together with a charge of £1.5m in relation to the cost of terminating discussions with our proposed second hub partner. In addition, as part of the year-end process we will be reviewing the carrying value of the Emergency Services businesses in light of current market conditions.
Summary
We are very pleased with the continued progress of our three membership businesses, with continued strong growth in UK Membership and our international businesses expected to deliver a profit on a combined basis for the first time this year. Furthermore, the steps taken to address lower volumes in Emergency Services will ensure ongoing profitability in this smaller, more focused division.
Overall, given the strong performance in the core membership businesses, we expect 2009 group PBTA to be at the top end of market expectations and with an exciting pipeline of business development opportunities Homeserve is well positioned for future growth.
We will announce our preliminary results on Tuesday 19 May 2008.
A conference call for analysts will take place at 8am 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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