LONDON – 20 June 2019 – HomeServe plc (“HomeServe”,”the Group”), the international home repairs and improvements business held an investor day at Checkatrade’s offices in Portsmouth. The investor day set out HomeServe’s growth aspirations for Checkatrade and confirmed 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.”
For Checkatrade, CEO Mike Fairman 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 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 announced 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 described 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.
HomeServe announced 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 confirmed 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, 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 are posted on https://www.homeserveplc.com/investors/results-events-and-presentations/2019.aspx.
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HomeServe Investor Relations
Miriam McKay – Group Communications and IR Director
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Simon Lewis – Head of Investor Relations
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HomeServe is an international home repairs and improvements business which provides people with access to tradespeople and technology to make home repairs and improvements easy. HomeServe is listed on the London Stock Exchange, with a market capitalisation of £4.1 billion.
Forward Looking Statements
This document contains certain forward looking statements, which have been made in good faith, with respect to the financial condition, results of operations, and businesses of HomeServe plc. These statements and forecasts involve risk and uncertainty because they relate to events and depend upon circumstances that will occur in the future. There are a number of factors which could cause actual results or developments to differ materially from those expressed or implied by these forward looking statements and forecasts. The statements have been made with reference to forecast price changes, economic conditions, the current regulatory environment and the current interpretations of IFRS applicable to past, current and future periods. Nothing in this announcement should be construed as a profit forecast.
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