Interim Results 19 November 2019
Highlights – financial and strategic progress Revenue up 13% and adjusted operating profit up 2% • All Membership businesses performed well • Progress on HVAC buy and build strategy: becoming a meaningful business line this year • Home Experts revenue up 31%: progress in Checkatrade, Habitissimo and Home Experts France • Agreement to acquire eLocal to enter the Home Experts market in North America. • homeserveplc.com 1
Group financial summary Δ % Δ % CC¹ £million HY20 HY19 Total revenue 457.7 404.3 13% 11% Adjusted operating profit² 37.7 37.1 2% (2)% Interest (9.1) (5.3) +71% Adjusted profit before tax² 28.6 31.8 (10)% Net Debt 451.4 291.9 55% Adjusted EBITDA² 70.9 60.5 17% Net Debt : Last 12 months adjusted EBITDA² 1.9x 1.4x Adjusted earnings per share² 6.5 7.5 (13)% Ordinary dividend per share 5.8 5.2 12% Currency benefit of c. £1.3m to adjusted operating profit: no further significant impact this year if current rates prevail • Statutory PBT of £19.7m (up 2%) reflects £7.4m exceptional net gain; £3.8m on exit from Italy and £3.6m on • acquisition of remaining 30% of Habitissimo Business remains second half weighted: investments more evenly phased. • 1 Constant currency $1.33 : £1, €1.13 : £1 ² Adjusted items are calculated excluding exceptional items, the amortisation of acquisition intangibles and the associated tax impacts homeserveplc.com 2
Divisional financial performance Revenue Adjusted operating profit/ (loss) £million HY20 HY19 Δ % Δ % CC¹ HY20 HY19 Δ % Δ % CC¹ UK 155.7 (5)% (5)% 10.2 38% 38% 147.7 14.0 North America 179.6 130.5 38% 30% 18.5 14.0 32% 24% France 40.4 36.8 10% 9% 7.9 7.5 6% 4% Spain 69.2 65.8 5% 5% 7.6 8.6 (12)% (13)% New Markets² – – N/A N/A (2.3) 0.3 N/A N/A Home Experts² 23.8 18.2 31% 31% (8.0) (3.5) N/A N/A Inter-segment (3.0) (2.7) 8% 8% – – N/A N/A Group 457.7 404.3 13% 11% 37.7 37.1 2% (2)% 1 Constant currency $1.33 : £1, €1.13 : £1 2 Home Experts split out from New Markets in FY19 as a new segment homeserveplc.com 3
Cash flow £m Free cash flow £37.5m 57.4 (HY19 £44.1m) 8.9 5.7 54.1 8.4 22.5 6.9 70.9 37.1 451.4 8.0 15.9 394.0 393.9 385.1 15.2 5.7 304.7 Net Debt 31 Adjust ed Non Cash Working Tax Net Interest Capex - Capex - policy M&A Italy sale Ordinary Foreign Other Net Debt Pre IFRS 16 Net Debt 30 Net Debt 30 March 2019 EBITDA Items Capital ordinary book M&A Dividend Exchange IFRS 16 September 2019 September Inflow Outflow 0.1x impact on leverage due to £57.4m effect of IFRS 16 • Net debt: adjusted EBITDA of 1.9x within target of 1.0x to 2.0x. • homeserveplc.com 4
Capital investments £m 22.5 22.4 19.0 17.6 8.2 7.7 6.9 7.0 0.1 3.2 Membership Partner Payments Acquisitions of policy books Home Experts Other M&A HY19 HY20 Total investment of £66.5m (HY19: £48.1m) • Statutory capital investment of £44.0m (HY19: £30.5m). • homeserveplc.com 5
Guidance We continue to expect to deliver strong growth across the Group in FY20 • – Strong Membership and HVAC performance will fund increased investment in Home Experts and New Markets – Net investment in Home Experts and New Markets to increase towards £19m Outlook remains unchanged with one exception – agreement to acquire eLocal will deliver incremental adjusted • operating profit – Expect to add c.$5m adjusted operating profit in FY20 (PBTA £2m); $16m in FY21 (PBTA £6m) – High single digit profit growth from FY22 onwards, reflecting further investment Full year interest charge of c.£18m (including impact of IFRS 16) • Effective tax rate c. 22% - 23% • No material change to working capital absorption (FY18 £40m; FY19 £30m) • Underlying / technology capex for FY20 expected to be in line with FY19 at £50m, and trend down over time • Cash conversion¹ > 100% and good growth in free cash flow • Net Debt : EBITDA towards the top of 1.0x to 2.0x target range following recent M&A. • ¹ Cash conversion defined as cash generated from operations as a % of adjusted operating profit homeserveplc.com 6
Global Membership & HVAC Good first half for all our Membership businesses Proven and scalable • Strong delivery funds investment in Home Experts • Continuous improvements being implemented globally. • HVAC buy and build strategy working well Five acquisitions in H1, bringing our global total to 12 • Cross sell opportunities with Membership; cost synergies from • better engineer utilisation. homeserveplc.com 7
Customers (m) and retention rate (%) UK – operational efficiencies 80 79 78 Adjusted operating profit up 38% to £14.0m • 2.2 2.1 1.9 Improvements in operating efficiency driven by organisational change • and better use of technology Focusing on a smaller core client base • HY18 HY19 HY20 18% increase in income per customer to £129 • Customer satisfaction around all time highs • Adjusted operating profit (£m) – Reevoo 96% and Trustpilot 4.4. 14.0 10.2 9.1 656 customer reviews AS OF 8/11/2019 HY18 HY19 HY20 homeserveplc.com 8
Transformation with technology “The customers are “The app has really really happy with the helped me out quick responses – I’ve because I’ve recently had nothing but good HomeServe Now gone self-employed.” feedback.” Potential to transform the way we serve customers • Lewis Gidney Chris Power Gidney Plumbing & Heating Haughley Power Plumbing & Heating Bury St Edmunds Automated voice and ‘fastest finger first’ model uses technology to • directly connect a homeowner with an available, hyper-local engineer Great way for trades to reduce their travel and downtime • Thousands of jobs successfully trialled for plumbing, electrics and • heating in the UK 2 7 6 4 b o J – Exceeding testing expectations c k s r o a y o r o d H r t r B f o M e n t m n t p o i A p 0 8 : 0 1 0 - 2 : 0 1 Soon to launch in North America. • Smart IVR and Intelligent Call Handling Hundreds of thousands of calls managed intelligently • – Exceeding testing expectations. Accept & Call Decline homeserveplc.com 9
France – increased momentum Customers (m) and retention rate (%) 89 89 88 Customers up 5% to 1.1m – the best growth for four years • Highest retention in the Group at 89% • 1.1 1.1 1.0 Strong partnerships • – Marketing activity with France’s top three water utilities; Veolia, Suez and Saur is performing well HY18 HY19 HY20 Strong business development • – Successful launches with online aggregators and retail Adjusted operating profit (€m) energy providers. 10.3 8.9 8.6 HY18 HY19 HY20 homeserveplc.com 10
Spain – strong operating performance Customers (m) and retention rate (%) 81 80 78 Relationship with Endesa remains productive • – Secured ongoing billing arrangement for a further five years – Re-activation marketing under Endesa brand 1.3 1.2 1.0 Active business development pipeline in Membership and Claims • – New Claims partnership with Bansabadell Seguros Generales HY18 HY19 HY20 On demand to policy, in partnership with Habitissimo. • Adjusted operating profit (€m) 9.8 9.0 8.6 HY18 HY19 HY20 homeserveplc.com 11
North America – further strong growth Customers (m) and retention rate (%) 83 82 82 Continued progress towards future profit target of $230m • Customers up 13% to 4.2m and total policies now exceed 7.0m • 4.2 3.7 – Integration of Tranche 2 of the Dominion Products & Services 3.1 policy book added c. 150k customers – Organic customer growth of 9% HY18 HY19 HY20 Signing 2-3 new affinity partners per week • Adjusted operating profit ($m) Strong acquisition-driven HVAC revenue growth – up 83% to $15.6m. • 23.4 18.9 14.7 HY18 HY19 HY20 homeserveplc.com 12
TotalHome Warranty North America – TotalHome Warranty Launch of a best-in-class whole home warranty plan in the US • – Large fragmented market with high price point and patchy levels of customer service – Marketing via our unique utility network Acquisitions of American Home Guardian in June 2019 and Nations • Home Warranty in November 2019 bring product and channel expertise Signed Mike Rowe as a spokesman • Supported by roll out of HomeServe app downloaded by c.30k users. • homeserveplc.com 13
International business development Japan Roll out with Hiscox in the UK to their high net worth • client base HomeServe Japan established in February 2019 • via Mitusbishi JV “Black box” for home insurance with iGo4 • Mitsubishi successfully facilitating introductions • Testing in the US • to energy utilities. Seeking a strategic partner to scale the business in the • US and other new markets. Italy Sale of our Italian JV to our partner Edison • Energia. homeserveplc.com 14
Recommend
More recommend
