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Homeserve looks to U.S., Spain for further growth
May 20, 2014 / 6:33 AM / 4 years ago

Homeserve looks to U.S., Spain for further growth

LONDON (Reuters) - British repair and insurance company Homeserve plans to double the size of its U.S. sales force in its new financial year, after strong growth there and in Spain helped to lift annual revenues by 4 percent.

Homeserve, which sells cover for household emergencies such as boiler breakdowns and burst water pipes, said on Tuesday it had seen a marked increase in customer numbers in both markets, helping group revenues to 568.3 million pounds for the year ended March.

CEO Richard Harpin, who founded the company more than 20 years ago, told Reuters he planned to expand the U.S. business, where it provides repair and insurance services to 26 million of the 128 million households, by doubling the number of people looking for partnership opportunities with utility companies.

“We’ve made a decision that we need to be investing more business development people in the U.S., so we are doubling the size of the sales force from 10 to 20 people over the course of the year,” he said.

He also plans to sign more partnerships with utility providers in the United States, having signed 12 last year, after profit there rose by 36 percent to 13 million pounds.

“We would hope that we are signing a similar sort of number of utilities over the coming 12 months ... but that will take time to come through,” he added.

The company said it had also seen strong growth in Spain, from its partnership with utility company Endesa, which had helped doubled customers numbers to 800,000 in the past year.

Group pretax profit fell to 84.1 million from 105 million, impacted by a 30.6 million pound fine imposed by the UK’s financial regulator, after the company was found to have committed a series of failings including mis-selling policies in 2012.

It was expected to report a profit of between 82.78 million and 84.74 million, with an average estimate of 83.95 million, according to a Thomson Reuters poll of 7 analysts.

Homeserve said customer numbers in its UK business, which accounts for 38 percent of total customers, had stabilised at 2.1 million, with a retention rate of 82 percent. Customer numbers have fallen by nearly a third, having previously stood at 3 million in mid-2012.

Shares in the firm were up 7.5 percent to 341 pence by 1007 BST, the biggest rise on the midcap FTSE 250 index.

“We highlight a number of positives in the statement, notably confidence in the UK stabilising, optimism on the U.S. market ... which, added to the resolution of past issues, leaves the business better positioned to deliver growth going forward ,” JPMorgan Cazenove analysts in a research note.

Reporting by Li-mei Hoang, Editing by Louise Heavens and Mark Potter

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