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Homeserve Plc

Homeserve plc Investor Day

HomeServe plc (LON:HSV), the international home repairs and improvements business, is holding an investor day today at Checkatrade’s offices in Portsmouth.

The investor day will set out HomeServe’s growth aspirations for Checkatrade and confirm the next milestone for Membership growth in North America.

Richard Harpin, Founder and CEO of HomeServe, said: “After 26 years of leading the HomeServe business, I have never been more excited by our growth prospects. We have made great strides forward in the development of Checkatrade and we have much more growth to come in our North American Membership business. I look forward to introducing the investment community to key members of our leadership team today, so that they can hear about our plans first hand.”

For Checkatrade, CEO Mike Fairman will set out his plans to accelerate growth in the number of trades on the Checkatrade platform, increase consumer usage, create a market-leading user experience and scale the business through technology upgrades and automation, while maintaining Checkatrade’s unrivalled reputation for checking, vetting and monitoring trades. Milestones set out today are to attract 150,000 – 200,000 trades onto the platform, achieve revenue per trade of £1200-£1300, achieve operating margins of 25-35% and generate medium to long-term adjusted operating profits of £45-90m in the UK.

HomeServe also announces today that it has completed the acquisition of the remaining 30% of Habitissimo, its Spanish Home Experts business for €8.6m, and appointed Sarah Harmon to lead the business from September 2019. Sarah is currently the Country Manager of LinkedIn in Spain and Portugal.

In Membership, Global Membership CEO Tom Rusin will describe the additional growth potential of the North American business. North America is now HomeServe’s biggest Membership business, but with c.70% of the potential market for home assistance policies still unserved, there remains considerable room for growth. The first growth milestone, set in 2016, to achieve adjusted operating profits of $160m, is now firmly in sight. Today HomeServe announces a new medium to long-term adjusted operating profit milestone of $230m, based on recruiting 6-7m customers, achieving income per customer of $120-125, building margins to 24-26% and adding $30-45m of profit from Heating, Ventilation and Air Conditioning (HVAC).

HomeServe today confirms its entry into the whole home warranty market in North America, with the launch of its Total Home Protection product drawing on HomeServe’s customer service expertise to differentiate itself in a large, attractive and fragmented market. The organic launch of Total Home Protection will be supported by the acquisition of American Home Guardian, also announced today, which adds marketing expertise in the real estate channel to HomeServe’s well established distribution via utility partnerships.

At its full year results on 21 May 2019, HomeServe stated that it expects to deliver further strong growth in FY20, with increased P&L investment in Home Experts offset by strong performance in Membership, particularly in North America. The net operating investment in Home Experts in FY20 is expected to be £10-12m, plus £2-3m in New Markets. Capital investment across all business lines in FY20 is expected to be c.£50m (excluding partner payments). The new financial year has started well, and performance is in line with expectations and the guidance given in May.

Slides from the Investor Day will be posted on www.homeserveplc.com this afternoon, followed by a full transcript of the keynote speeches.