(Alliance News) - Homeserve PLC on Tuesday reported a solid interim performance, with revenue rising on organic growth and contributions from acquisitions.
The FTSE 250 home repairs and improvements firm also announced the acquisition of a 79% stake in Home Experts business eLocal Holdings LLC for USD140 million on a debt-free, cash-free basis.
The payment will be satisfied through Homeserve's existing debt facilities, and the transaction is expected to close in December, subject to US competition clearance, namely the Hart-Scott Rodino antitrust improvements act.
For Homeserve's current financial year to the end of March, eLocal is expected to add around USD5 million to adjusted operating profit, rising to USD16 million in the 20201 financial year further investment.
Through the acquisition, Homeserve will have entry into the Home Experts market in North America, and the group holds the option to acquire the remaining 21% stake.
For the six months to the end of September, Homeserve reported pretax profit of GBP19.7 million, up 2% from GBP19.3 million the year before, mainly on one-off gains from the sale of its 49% stake in Homeserve's Italian associate.
On an adjusted basis however, pretax profit dropped by 10% to GBP28.6 million from GBP31.8 million, due to higher interest charges from fixed rate borrowings agreed the prior year, alongside net debt that rose by 55% as at September 30 to GBP451.4 million from GBP291.9 million.
Revenue grew by 13% to GBP457.7 million from GBP404.3 million, driven by organic growth from all regions, and contributions from acquisitions in the Heating, Ventilation & Air Conditioning business, including Gregg Mechanical and Fred's Home Services.
Homeserve declared an interim dividend of 5.8 pence per share, up 12% from 5.2p the year before.
"I am very pleased with our financial performance and strategic progress in the first half of this year. All of our Membership businesses performed well, with North America continuing to deliver strong growth, and interesting opportunities in all our European businesses to develop new partnerships, harness new technology and continue to improve customer service and efficiency. Our buy-and-build approach to HVAC added five profitable new acquisitions and will become a significant business line for us for the first time this year," said Chief Executive Richard Harpin.
Shares in Homeserve - which is headquartered in Walsall - were up 4.7% at 1,254.00 pence on Tuesday in London.
By Dayo Laniyan; dayolaniyan@alliancenews.com
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