Homeserve profit falls, maintains dividend

Home emergency repairs group HomeServe reported a decline in full year profit but said it is confident about plans for stable UK customer numbers as its International businesses continues to grow.

The group, which insures people against burst pipes and broken boilers said adjusted pre-tax profit fell to £105.0m for the year ended March 31st 2013 from £126.0m before. Revenue rose to £546.5m from £534.7m from the same time a year earlier.

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"Our UK business has enhanced its controls and governance and significantly improved its customer service over the past year. We have clear Sales and Marketing plans for increasing both customer acquisition and retention and expect UK customer numbers to stabilise at around 1.9m from March 2014," Homeserve said in company statement.

UK customers haven fallen sharply amid an investigation into alleged mis-selling by the Financial Services Authority. The investigation is expected to take several more months to conclude.

"We remain confident that our plans for stable UK customer numbers together with continued strong growth in our International businesses will allow the group overall to return to modest growth in 2014/2015."

Chief Executive Richard Harpin added: "We have made very good progress in growing our International businesses over the past year and these now account for over 50% of our customers. We continue to increase the number of International affinity partners with 12 new agreements signed during the past year covering over 5m households."

Homeserve issued a profit warning in March and warned that falling UK customer numbers over the next two years mean would mean around 300 jobs will be cut. The cuts will lead to a £4.0m exceptional charge but also result in £10m of savings.

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