May 19, 2020 / 11:16 AM / 14 days ago

UPDATE 2-Boost for HomeServe as locked down consumers do up their homes

(Adds CEO comments)

* FY adjusted pretax profit up 12%, revenue up 13%

* One of the few firms to raise dividend in virus crisis

* Shares up as much as 6% on the FTSE midcap index

By Indranil Sarkar

May 19 (Reuters) - Stuck at home in coronavirus lockdowns, North Americans and Europeans are spending more time doing up their houses, giving a boost to British repairs and services company HomeServe Plc, it said on Tuesday.

Shares in the firm, which provides emergency repairs as well as upgrades such as new boilers, jumped as much as 6% after it reported a 12% rise in adjusted pretax profit for the year ended March 31 to 181 million pounds ($222 million).

Unlike thousands of companies that have scrapped or slashed their dividends to conserve cash in the economic downturn triggered by the coronavirus pandemic, HomeServe lifted its payout by 10% to 23.6 pence per share.

“(Home owners) are probably not going to move houses in the next 12 months, probably not going to go on holiday, but they will improve their homes,” founder and Chief Executive Officer Richard Harpin told Reuters in a telephone interview.

With more people working from home and limited in their social gatherings, Harpin said there was growing demand for room revamps, whether for a home office, play room, home gym or a bar, which was benefiting the company’s Home Experts and Checkatrade businesses.

HomeServe makes about 38% of its revenues in North America, 33% in Britain and most of the rest in Spain and France.

The company, which has not furloughed any staff or made redundancies during coronavirus lockdowns, said it had not seen a noticeable increase in cancellations, but had paused most large scale marketing campaigns.

At 1045 GMT, its shares were up 3.4% at 1,205 pence.

“HomeServe has proven resilient during the COVID-19 crisis, making further progress in signing new ... partners and customers,” J.P. Morgan analysts wrote in a note, upgrading the stock to “overweight” from “neutral”.

“We have all become acutely aware of the importance of our homes over the last few months, which means that HomeServe’s purpose of making home repairs and improvements easy has never been more relevant,” Harpin said.

$1 = 0.8168 pounds Reporting by Indranil Sarkar and Muvija M in Bengaluru; Editing by Ramakrishnan M. And Mark Potter

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