HomeServe to cut 300 jobs as customer numbers decline

Home emergency repairs group HomeServe said it is on target to hit full-year forecasts but has warned that a fall in customer numbers next year will lead to the loss of 300 jobs.

Home emergency repairs group HomeServe said it is on target to hit full-year forecasts but has warned that a fall in customer numbers next year will lead to the loss of 300 jobs.

Chief Executive Richard Harpin said in a statement on Friday that HomeServe will meet expectations for the year ending March 31st 2013 with UK customer numbers at around 2.25m, within the guidance range of 2.2m and 2.4m given at the half-year stage.

He said that there has also been "strong growth" in the International business with customer numbers rising by 20% in the US and over 30% in Spain.

However, the UK customer base is predicted to "stabilise at around 1.9m customers by March 2014 and this will reduce the UK financial performance in FY14 and FY15.

"As a result we are announcing the loss of 300 roles in the UK business. With the continued strong growth in our International business, this will allow the group to return to modest growth in FY15."

The job losses mean that the company will take a £4.0m charge in its full-year results. Meanwhile, it has had to write-down the carry value of its French warranty business SFG to reflect challenging conditions in the electrical retail market and will also realise an impairment of £15m.

Nevertheless, pre-tax profits for the current year (ending March 2013) are still expected to be in line with analysts' forecasts which range from £102.9m to £110m (average: £105.7m).

FSA probe ongoingHomeServe is still under investigation from the Financial Services Authority (FSA) over "certain historic issues" to do with its outbound marketing activity which forced it to temporarily suspend UK sales and market activity in October 2011.

This has since restarted but the FSA probe is expected to continue for a "number of months", the firm said on Friday.

"Our UK business is making progress improving the effectiveness of its sales and marketing activity and we have clear plans for increasing both customer acquisition and retention over the next two years," Harpin said.

The company admitted that this improvement has taken longer than originally expected to implement.

Recommended

The top funds to invest in
Funds

The top funds to invest in

Investors continue to favour passive funds in April though figures reveal an actively managed money market fund also caught their eye. We look at wher…
3 May 2023
The ten highest dividend yields in the FTSE 100
Income investing

The ten highest dividend yields in the FTSE 100

Rupert Hargreaves takes a look at the companies with the highest dividend yields in the UK’s blue-chip index
20 Apr 2023
Best junior stocks and shares ISA platforms
Isas

Best junior stocks and shares ISA platforms

A junior stocks and shares ISA is a great way to save for your child tax-efficiently. But it can be confusing deciding which investment platform to ch…
28 Mar 2023
The outlook for Shell shares is mixed, despite bumper profits
Energy stocks

The outlook for Shell shares is mixed, despite bumper profits

With profits surging, it looks as if Shell is on a roll, but the company’s growth from here is hard to see as Rupert Hargreaves explains.
6 Feb 2023

Most Popular

Nationwide to give £100 cash boost to customers
Personal finance

Nationwide to give £100 cash boost to customers

Nationwide Building Society is giving customers £100 as it reinvests profits. Dubbed the Nationwide Fairer Share scheme, we look at who is eligible.
22 May 2023
Share tips of the week – 26 May
Investments

Share tips of the week – 26 May

MoneyWeek’s comprehensive guide to the best of this week’s share tips from the rest of the UK's financial pages.
25 May 2023
The best one-year fixed savings accounts - May 2023
Savings

The best one-year fixed savings accounts - May 2023

You can now earn 5% on 1 year fixed savings accounts - the best rate seen in 14 years. We have all the latest rates available now.
26 May 2023