LONDON -- Homeserve (HSV +0.00%) -- the domestic-emergency maintenance company that operates in the U.K., France, Spain, and the U.S. -- is up more than 10% as of 9:10 a.m. EDT following the release of its preliminary results for the year to March 31.
Revenue was up more than 2% to £546.4 million, adjusted operating profit was down 16% to £107.6 million, and adjusted pre-tax profit was 17% lower at £105 million. Following exceptional items totaling £25 million -- relating to the costs of reorganization in the U.K., the costs of the ongoing Financial Conduct Authority investigation (including provision for a potential fine), and a writedown relating to its French subsidiary, Societe Francaise de Garantie -- statutory pre-tax profit was just £67 million, down 52% from 2012's £138 million.
However, although they seemed quite disappointing, the results were not so bad as they could have been, given the profit warning issued in March. And the company says it's making "good progress" in international growth -- customer numbers are up 50% in Spain (albeit from a low base) and 25% in the US.
Commenting on the results, Homeserve chief executive Richard Harpin commented:
We have made very good progress in growing our International businesses over the past year and these now account for over 50% of our customers. We continue to increase the number of International affinity partners with 12 new agreements signed during the past year covering over 5 million households. Our U.K. business has enhanced its controls and governance and significantly improved its customer service over the past year. We have clear Sales and Marketing plans for increasing both customer acquisition and retention and expect U.K. customer numbers to stabilize at around 1.9 million from March 2014. We remain confident that our plans for stable U.K. customer numbers together with continued strong growth in our International businesses will allow the Group overall to return to modest growth in 2014/2015.
At 249 pence, Homeserve's share price has now made good progress in climbing out of the hole it found itself in after March's profit warning, and it's up more than 30% from a low of 185 pence in early April. But it's still down 6% year to date, has barely moved over the past 12 months, and remains a painful 57% down from a high of 530 pence in June 2011. And the company is still under the shadow of an investigation announced by the FSA (now the FCA) last year regarding what were described as "certain historic issues."
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