Shares in home repair and improvement firm Homeserve (HSV) hit a new all-time high of £13.58, up 4.3%, after it reported that trading from 1 April to 16 July had been ‘in line with historic trends with no impact from the Covid-19 pandemic.’
Policy renewal and mid-term cancellation rates were in line with previous years, and its re-launched marketing campaign to win new customers is producing ‘better results than expected, notably in the UK and North America.’
Although lockdown restrictions meant the firm could only carry out emergency repairs, all claims were met and customer satisfaction is at record highs ‘reflecting strong service levels during the pandemic.’
Its Home Expert business saw a strong recovery in consumer demand for home improvements, call volumes at eLocal hit record levels and the Checkatrade service registered the largest ever number of web visits in June at 2.76 million.
Of the 43,000 member firms on Checkatrade, 87% are paying monthly fees, which generate recurring revenue for Homeserve, while the remaining firms are free of charge ‘affiliate’ members.
In heating, ventilation and air conditioning (HVAC), the firm has been busy making four small acquisitions, one of which has brought in 38,000 new customers in Spain, and has a ‘strong pipeline of attractive targets.’
Shore Capital analyst David Brockton is positive on Homeserve and has maintained his £14.50 price target although he hasn’t raised his forecasts for the moment.
‘While early performance appears just ahead of expectation we make no change to our forecasts. We remain positive on the group’s substantial long-term growth opportunity, as it grows Membership activity internationally and builds its currently loss-making Home Experts platforms.’
