Tuesday 17 November 2020 10:30 am

Homeserve boosts profit forecasts as lockdown buoys firm

Homeserve said it would beat current full year profit expectations after a strong first half saw the home repairs firm increase its revenue by nearly a fifth.

The FTSE 100 company posted £536.7m in turnover for the first six months of the year, up 17 per cent on last year’s take.

It said that the increase was due to a combination of growth in its North American business and additional revenue streams from recent purchase Elocal.

However, statutory profit before tax fell 49 per cent in the same period to £10.1m, which Homeserve said was the result of an absence of exceptional gains in the period.

The firm is one of few to have benefited from the impact of the pandemic, with the rise in home working encouraging people to spend more money fixing up their homes.

As a result of its impressive performance, Homeserve was admitted to London’s premier FTSE 100 index back in March.

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It has been helped by the fact that its 6,000 tradesmen have been able to continue working all the way through the pandemic, despite lockdown restrictions.

Chief executive Richard Halpin told City A.M. that he thought the change in consumer behaviour would be permanent.

“Home working is not going to go away. People will get a balance between home and office, and that is going to mean that houses need permanently adapting for home working. If people are in their homes more, then more is going to go wrong.”

He added that searches for Checkatrade, Homeserve’s subsidiary for finding tradesmen, were up 38 per cent in October year-on-year.

The company spent £47m on buying nine companies during the period, and Halpin added that it would continue to pursue the acquisition strategy.

Homeserve said it would hike its interim dividend seven per cent to 6.2p on the back of its impressive performance.

For the full year, it added that it expected to grow profit “slightly ahead of current consensus earnings estimates”.

Chief executive Richard Halpin said: “What HomeServe stands for – making home repairs and improvements easy – has never been more important. The stresses of living and working through a pandemic mean that we are all more aware than ever of the value of home comforts.

“As we go into the busy winter months, our focus continues to be on delivering great service for our customers and a secure livelihood to our teams and trades. 

“The latest wave of lockdowns has made no fundamental difference to our operations, and the good news for us and our customers is that engineers can continue to work in peoples’ homes.”