HomeServe's New Markets segment to post 62 rise in operating loss

FTSE 250-listed international home emergency business HomeServe has reported that it expects its New Markets segment to report a fiscal year 2013 operating loss of approximately 5.5m pounds, representing a 61.8 per cent rise compared to the fiscal year 2012, when the business reported a 3.4m loss.

HomeServe forecast adjusted profit before tax for the year ending March 31st would be 'in line with market expectations', stating that it was continuing to grow its international businesses with new affinity partnerships and growing customer numbers and earnings.

In the UK, it reported that it was continuing its transition to a smaller, more focused business. Customer numbers in the fiscal year 2013 were reported to be around 2.25m, well within the lower end of the target range previously outlined by the company of between 2.2 and 2.4m.

Looking to the web for new businessUK retention rates increased slightly from the reported 78% for the first half of the year and HomeServe reported that it was expanding its channels for attracting new customers including through using the internet.

"Direct mail and outbound telephony sales channels have historically provided the majority of our new customers in the UK. Whilst direct mail will continue to be a key channel going forward, take up rates from current campaigns are still lower than historic levels and we are currently focusing outbound telephony channel on sales to existing customers only.

"We are therefore developing additional ways of acquiring new customers through a broader range of channels including the internet and sales through our partners' call centres. The effectiveness of our marketing campaigns and our retention rate will help to determine the future shape and size of the UK business," the management statement reported.

In the US, the group reported its business had secured two new affinity partnerships representing 224,000 affinity partner households and in France and Spain, the group reported "good financial performance" and "strong growth in customer and policy numbers", respectively.

MF