HomeServe expects £10m profit hike amid US expansion

6 April 2021, 10:04

HomeServe's London-listed shares fell after the news
Rise from recession stronger than predicted. Picture: PA

The business said it had added another 300,000 customers in North America.

Home repair and improvements business HomeServe expects to see profit rise by around £10 million when it publishes full-year results next month.

The business said that profit before tax will likely hit around £191 million on an adjusted basis in the 12 months to the end of March.

It is up from £181 million a year earlier, in line with expectations, as the business expanded its customer base in North America.

The membership part of the business added approximately 300,000 customers on the continent over the year, growing to 4.7 million.

It also reaches considerably more customers through partnerships that have access to 66 million homes.

Although the business lost around 200,000 membership customers in the UK, they spent more money on average, the company said.

HomeServe bought 22 other companies during the year, up from 15 acquisitions the year before. It is investing in its heating, ventilation and air conditioning unit.

“The pre-close does not guide to organic growth but we still expect an improvement over the first half. Headline estimates are unchanged, but once again the UK is worse and other membership businesses better,” said Liberum analyst Joe Brent.

He added that the business is losing UK customers, dropping from 1.8 million to 1.6 million, but that the fall is expected to trough at around 1.5 million customers.

Checkatrade, HomeServe’s business which lets customers find tradespeople, gained another 5,000 paying trades, to 44,000.

However while demand is strong, the growth is “lower than we might hope”, Mr Brent said.

Net debt hit around £530 million by the end of March, up from £509 million a year earlier.

Shares in the company fell by 1.7% as markets opened on Tuesday morning.

By Press Association