Milder than forecast winter aids acquisitive Homeserve
Tuesday 23 May 2006
The emergency repair group Homeserve unveiled a better than expected 28 per cent jump in its annual pre-tax profits yesterday, boosted by a milder than forecast UK winter.
Richard Harpin, the company's chief executive, said the group had cashed in following predictions of an unusually harsh winter in Britain at the end of last year, which encouraged many more people to take out home emergency cover.
However, the harsh weather conditions did not materialise, with claims staying at relatively normal levels for the period.
Shares in the company leapt 7 per cent on the news yesterday, unwinding some of the heavy price falls of the past few weeks. However, they gave up half of the gains later in the day to close at 1407p, giving the company a market value of £908m.
The company's strong growth in profits was underpinned by a 66 per cent rise in revenue to £367m for the year, helped along by a handful of small acquisitions over the year.
Mr Harpin said that the company planned to continue its acquisitive streak over the coming year, particularly outside of the UK.
Although the group has favoured smaller bolt-on acquisitions to date, he said the company could easily fund a deal of "a few hundred million pounds" by raising its debt levels, if the right opportunity came along.
Mr Harpin added that he believed the growth prospects in the UK remained strong, as people became increasingly concerned about cowboy tradesmen.
"The market is being driven by disaster stories of plumbing emergencies, cowboy plumbers and people not being able to get somebody out to do an emergency repair," he said.
Revenues and profits at Homeserve grew across all divisions over the year, with the exception of its furniture warranties business, which has struggled since Courts went bust at the end of 2004. The division made an operating loss of £1.5m over the year.
However, Mr Harpin said that the company had won several new key contracts over the past few months, including one with Debenhams, which he said would help restore the division to profitability.
- 1 President of Argentina adopts Jewish godson to 'stop him turning into a werewolf'
- 2 ALS ice bucket challenge co-founder Corey Griffin drowns, aged 27
- 4 Sir Winston Churchill’s family begged him not to convert to Islam, letter reveals
President of Argentina adopts Jewish godson to 'stop him turning into a werewolf'
Exclusive: Abusers using spyware apps to monitor partners reaches 'epidemic proportions'
UK weather: Warning for more snow and ice as freezing temperatures and gales hit Britain
Stoke-on-Trent becomes first British city to be classified as 'disaster resilient' by the United Nations
AirAsia flight QZ8501 missing: Search for plane carrying 162 passengers from Indonesia to Singapore suspended overnight
British actor Idris Elba cannot star as James Bond because he is black, says shock jock Rush Limbaugh
Millions of Britons struggling to feed themselves and facing malnourishment
Ukip member gets into Christmas spirit with Union Flag plea to Santa 'for our country back'
Germany anti-Islam protests: 17,000 march on Dresden against 'Islamification of the West'
Nigel Farage: Ukip leader named 'Briton of the year' by The Times
Immigrants make UK racist, says Ukip councillor Trevor Shonk
iJobs Money & Business
Not specified: Selby Jennings: VP/SVP Credit Quant Top tier investment bank i...
Not specified: Selby Jennings: Quantitative Research | Global Equity | New Yor...
Not specified: Selby Jennings: SVP Model Validation This top tiered investment...
Highly Competitive: Selby Jennings: Our client, a leading European Oil trading...