29th Sep 2008 07:00
PRE CLOSE STATEMENT
Homeserve plc, the home emergency service company, today provides the following statement prior to entering its close period for the half year ending 30 September 2008.
We anticipate first half results ahead of last year and in line with our expectations. The current market conditions are not having a material impact on our consumer facing membership businesses, with renewals and marketing take up rates for utility branded policies in line with our targets.
UK Policy Membership
In our UK Membership business, we are pleased to report that gross new policy sales will be ahead of last year at around 0.70m (0.59m in 2007). In addition, policy retention rates remain high at 84% and continue to trend in line with previous years. Our objective is to maintain this retention rate through the second half of the year. Following successful operational testing of 'One Contact', our new 'Pay on Use' proposition aimed at non-insurance minded homeowners, we will commence a regional pilot in the Midlands on 1 October 2008.
International Policy Membership
Our international businesses are making good progress.
In France, Domeo continues to grow well and retention rates remain high. In October, we commence test marketing our range of plumbing products with a major French household insurance partner. In Spain, Reparalia is now fully integrated within the business and we commence marketing with Endesa in October.
In the US, we are encouraged by the highly successful marketing campaigns with California and Louisville Water and retention rates are also performing well. During the summer, we have developed the pipeline of potential new partner relationships and been successful in progressing several proposals to the advanced negotiation stage.
UK Emergency Services
The insurance-driven emergency repair market remains challenging with a reduction in underlying claims volumes and increased price competition. At the same time we have continued to drive margin improvements through being more selective in the type of work we take on, improving our working relationships with subcontractors, driving procurement efficiencies and tight management of overheads. We are continuing to make progress in securing our second hub deal.
Outlook
Homeserve has made good progress in the first half. As in prior years, trading will be weighted to the second half of the year, which is the busiest period for marketing activity and emergency repairs. This year we will see an increased weighting toward the second half due to the run-off of our reinsurance captive over the last twelve months and the phasing of our new and enhanced underwriting agreement.
The financial year continues to develop in line with our expectations, and our outlook for the full year remains unchanged.
Homeserve expects to announce its interim results on Monday 24 November 2008.
29 September 2008
Enquiries:
Homeserve plc
Richard Harpin, CEO
Jonathan Simpson-Dent, CFO
Mathew Wootton, Investor Relations Director
Tel: 01922 427903
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