Falling customer numbers and an FCA investigation take their toll
Homeserve has posted UK operating profits of £78.3m for the 12 months to 31 March 2013, down 24.1% on the previous year (2012: £103.1m).
The troubled home emergency business has seen a further drop in customer numbers, with 2.3 million customers as at 31 March 2013, down from 2.7 million the previous year. The company expects its UK customer numbers to stabilise at 1.9 million in March 2014 and then return to growth.
This fall in the number of customers has seen revenues decrease by £45m to £309m (2012: £354m), although earnings per customer have increased by 7% to £106 (2012: £99).
The company is targeting new customers of 0.2 million over the next year, with increased sales and marketing activity aimed at achieving this target. Homeserve had a total of 0.1 million new customers in the past 12 months, compared to 0.6 million in the previous year.
Homeserve is still being investigated by the Financial Conduct Authority (FCA) for alleged mis-selling and poor customer service. The company has set aside £6m to cover the expected costs and fine from the investigation and has already seen a 40% reduction in the number of complaints over the last financial year.
A further £4m of extraordinary costs was also included in the most recent set of results, relating to the loss of 300 jobs that were announced in March.
Chief executive Richard Harpin said: “Our UK 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 customer acquisition and retention and expect UK customer numbers to stabilise at around 1.9 million from March 2014.
“We remain confident that our plans for stable UK customer numbers together with continued strong growth in our international businesses will allow the group overall to return to modest growth in 2014-15.”
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