Homeserve full-year profit and revenue up as customer numbers grow

FTSE 250 repair and insurance company HomeServe posted a rise in profit for the year to the end of March as revenue and customer numbers grew.

Adjusted pre-tax profit rose 9% from 2015 to £93m on revenue of £633.2m, up from £584.2m. Profit was a little better than the £91.6m analysts had pencilled in.

Meanwhile, the total number of customers increased 11% to 7m, with over a third of the group’s customers now outside the UK.

Chief executive Richard Harpin said: “This has been another very good year for HomeServe with all businesses performing well.

“I am confident we will deliver on our expectation of further good growth in FY17, alongside continued investment in marketing, business development, international expansion and innovation initiatives."

In the UK, customer numbers edged up 3% to 2.2m as adjusted operating profit grew to £58m from £56.4m and revenue rose 2% to £291.8m.

Meanwhile, a strong performance in the USA saw adjusted operating profit up 89% to £12.1m on revenue of £152.6m, up 22%. Customer numbers were up 17% to 2.3m.

HomeServe said the USA remained its most significant opportunity, with 128m households of which we now have affinity partner relationships that provide services to 32m.

In France, customer numbers grew 7% to 1m amid stable profits of £23.2m and revenue of £77.4m, up 3%.

Spanish customer numbers rose 11% to 1.2m, while profit was up at £9.9m from £7.5m.

At 0825 BST, HomeServe shares were up 0.5% to 433.40p.

RBC Capital Markets, which rates the stock at ‘outperform’, said the results were strong and the outlook positive.

“We believe the equity story remains sound, with high growth potential, allied to strong cash flow and a shareholder friendly approach to returns,” it said.