British home-insurance group HomeServe Plc posted a higher first-half profit from core operations, aided by growth in customer and policy numbers, and said it would not be affected by the recent floods in north west England.
HomeServe, which provides cover for a range of emergencies such as broken boilers and overflowing washing machines, also said it was confident of meeting market estimates for a full-year pretax profit of 98.0 million pounds ($162 million).
HomeServe’s Chief Executive Richard Harpin said: “The flooding in the UK won’t have an effect on our business”
The Association of British Insurers had said on Monday the UK insurance industry faced a hit of up to 100 million pounds from last week’s floods in northern England.
“We used to carry out fire and flood restoration, which was a part of the emergency services business that we recently sold to enable us to focus on our high-margin, recurring-income membership business,” Harpin said.
HomeServe, which raised its interim dividend by 9.5 percent, said it continued to see good levels of new policy sales and high levels of renewals in the second half.
It expects margins to remain on the “similar sort of levels as the first half,” the CEO said.
Seymour Pierce said the group was heavily geared towards the second half and reiterated its “outperform” rating on the stock.
For the six months ended Sept. 30, adjusted pretax profit from core operations rose to 18.9 million pounds from 16.5 million pounds last year. Revenue grew 25 percent to 135.0 million pounds.
Including a loss of 24.6 million pounds from the sale of its Emergency Services business, HomeServe slipped to a net loss of 12.3 million pounds, compared with a profit of 10.1 million pounds last year.
The company declared an interim dividend of 11.5 pence, up from last year’s 10.5 pence.
Acquisitions to boost growth
The company said it would focus on organic growth, but continue to look at acquisitions.
“That (organic growth) will be supplemented by acquisitions of home assistance policy businesses particularly focused on the United States, where there are a number of utilities running their own programmes,” CEO Harpin said.
HomeServe said it was currently in advanced negotiations with six U.S. utilities.
Revenue from the U.S. business grew 29 percent in local currency during the first six months, it said.
