Broker snap: 'Excellent' year for Homeserve

25th May 2011 09:38

UBS has hiked up its target price at home emergency repairs group Homeserve, after an "excellent operational performance" in the year ended 31 March.Revenue came in ahead of the broker's forecasts at £467.1m (UBS: £464m), representing a growth of 27%. Earnings per share (EPS) was 25.9p, above estimates of 25.1p."4% UK customer growth and an unchanged group retention rate of 83.6% are the highlights in our view. Profit disclosure...shows the company hitting its £6m US profit target and beating our expectations in France and Spain," UBS said.The broker expects that, with a more comfortable net cash position anticipated in the current year, the most likely use is it is for the group to make further policy book acquisitions in the US.UBS raises its EPS estimates over the next few years by up to 2%, and increases the target price to 560p, from 510p. A 'buy' is retained.---BC