Homeserve warns of increased losses in new markets

29th Sep 2011 12:32

Emergency home repairs outfit HomeServe expects to report a higher operating loss in its new markets division for the half year to the end of September.The firm blames the loss on increased investment in marketing in Italy and said its financial position remains strong with net debt on 30 September expected to be lower than at the same date a year ago (£61.5m).The firm said: "In the UK, gross new policy sales are expected to be similar to the same period last year (HY2011: 0.7m). In addition, we are currently testing an initiative offering existing customers additional cover as part of an enhanced renewal offer. This initiative is expected to deliver an additional 0.25m new policies in the first half of the year.""Customer numbers at 30 September are expected to be around 5% higher than a year ago, with total policies expected to be around 8% higher. The retention rate remains high at around 82.5%."In Spain, the firm expects to more than double the number of customers and policies compared to a year ago. The division has seen good revenue growth in both the membership and claims handling businesses, although the increased marketing activity is expected to result in Spain continuing to make a small operating loss in the first half of the year.The group added: "We now have over 5m customers and 11.7m policies across the group. We expect profits in the first half of the year to be ahead of the same period last year and in line with our expectations.The share price 1.78% to 473.5p by 12:50.NR