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Home emergencies and repairs provider, Homeserve plc (LSE:HSV), said the company’s financial position remains strong as it continues to grow its international business and make progress in “simplifying and refocusing” its UK operations.
The statement was issued today – two days after the company cleared rumours of takeover talks, which pushed HomeServe share prices by 20 pence, or nearly 12%, to 187 pence on 18th July.
In its first quarter performance, HomeServe said its “established international businesses in USA, France and Spain continue to grow their customer and policy numbers.”
The provider of home emergency insurance covers signed an affinity partner agreement with California-based Alameda County Water District, which gives the company a further 80,000 “marketable households”.
The group’s French brand Domeo, which it took full control in December 2011, maintained a high retention rate of 87% and a continued growth in income per customer.
In the UK, the group stated the business remains on track to achieve its full year customer number and retention targets.
“As in previous years, our trading will be weighted towards the second half of the financial year reflecting the seasonality of our marketing activity and associated renewals profile,” HomeServe said.
Past Issues
The FTSE 250 company further stated that the UK Financial Services Authority (FSA) has commenced its investigation on “past issues” and said the inquiry may take months to complete.
In October 2011, HomeServe suspended its outbound sales call centre on grounds of potential failings in sales and marketing, complaints handling, and associated governance and controls.
“The identification of the regulatory issues in our UK business in October 2011 has made this the most challenging year in HomeServe’s history,” HomeServe stated back on 22nd May 2012.
Despite that, net debt was reduced by £5 million to £61 million as at 30th June, compared to the £66 million it posted on its yearend report dated 31st March 2012.
Company Spotlight
Homeserve plc is a UK-born home emergencies and repair services company established in 1993.
The company became public in 2010 and forms part of the FTSE 250 Index. Shares trading on the London Stock Exchange were up 3.7% to 195.3 pence a share at 12:35 PM GMT.
