HomeServe plc Pre-close trading statement
April 20, 2011 (PRLEAP.COM) Lifestyle NewsApril 20, 2011 -HomeServe plc, the international home emergency business, today publishes the following trading update prior to entering its close period for the year ending 31 March 2011.
Summary and Outlook
HomeServe has seen a good finish to the financial year and we expect to report another year of strong growth in profit in line with expectations. We continue to see good customer and policy numbers and an excellent performance on retention across all our businesses.
In the UK we have continued to invest in our marketing activity with the campaigns delivering strong customer and policy growth. Customer numbers at the end of February 2011 were 3% higher than at the same period in 2010 and we are confident of achieving towards the top end of our 3-4% customer growth target for the full year. The UK retention rate has also remained high and we expect the full year rate to be at least 82.5% (FY10: 83.0%).
UK policy numbers are expected to be around 6% higher than a year ago with both Plumbing & drains and water supply pipe policies and Gas and gas supply pipe policies growing during the year.
Our US business is continuing to perform strongly. We expect to deliver customer growth of over 50% compared to a year ago with policy numbers increasing by over 70%.
We continue to build momentum in the US with the acquisition of the 135,000 South Jersey Energy Service Plus (SJESP) policies on renewal and the additional 0.9m affinity partner households with SJESP and Millennium Energy announced earlier this month. We now have 21.3m affinity partner households with 17 partners in the US and discussions are ongoing with a number of other potential future partners.
Domeo's new marketing campaigns introduced at the end of the first half of the year have continued to gain momentum during the final quarter of the year and we expect gross new policies for the full year to be around 0.5m (FY10: 0.5m). Total customer numbers are expected to be around 9% higher with policy numbers up around 12% compared to 31 March 2010.
In Spain, we have continued to achieve strong growth in both customer and policy numbers and will exceed our target of doubling the number of customers and policies during the year.
Our test marketing activity in Italy and the development of a manufacturer warranty business within SFG in France have continued to make good progress with marketing take-up rates in line with our expectations. The 'new markets' segment is expected to report an operating loss reflecting our investment in marketing and additional country infrastructure costs.
The business continues to be highly cash generative with net debt expected to be around £20m at the 31 March 2011 (FY10: £52.9m).
Richard Harpin, Chief Executive
Martin Bennett, Chief Financial Officer
Mark Jones, Head of Investor Relations Tel: 01922 427979
Andrew Honnor Tel: 020 7353 4200
More information on HomeServe plc can be found on our corporate website: www.HomeServeplc.com
HomeServe's Preliminary Results for the 12 months ended 31March 2011 will be announced on Tuesday 24 May 2011.
Analyst forecasts for Profit before tax* currently range from £112.0m to £117.7m based on 15 forecasts, with an average of £116.2m. Profit before tax* is defined as profit before tax excluding amortisation of acquisition intangibles, joint venture taxation and exceptional operating items.
This information is provided by RNS
The company news service from the London Stock Exchange