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Indeed, I find myself in agreement with g3orge on this. The profit warning is regarding UK business only, which they've been steadily diversifying away from for last few years regardless. Also, though they warned on profits, nothing specific about the div, which is still one of the better reasons to hold HSV in the long run - the yield is solid. Also, i'd rather pump money in to shares than leave it in the bank now that Dijsselbloem has mentioned the Cyprus bailout may be the model to use in the future...... The FSA thing is REALLY starting to bug me though.
Sell? Really , profits written down until 2014/15 and yet share price bumps only about 5%...still awaiting result of the the longest FSA conclusion ever. UK jobs binned , restructured to more overseas where there is less regulation...and more profit and bigger markets. Hold I think makes more sense not panic selling as IMII would suggest. Also as money flees the banks in fear of being taxed some will end up in equities including this one.
Looking to the web for new businessUK retention rates increased slightly from the reported 78% for the first half of the year and HomeServe reported that it was expanding its channels for attracting new customers including through using the internet. "Direct mail and outbound telephony sales channels have historically provided the majority of our new customers in the UK. Whilst direct mail will continue to be a key channel going forward, take up rates from current campaigns are still lower than historic levels and we are currently focusing outbound telephony channel on sales to existing customers only. "We are therefore developing additional ways of acquiring new customers through a broader range of channels including the internet and sales through our partners' call centres. The effectiveness of our marketing campaigns and our retention rate will help to determine the future shape and size of the UK business," the management statement reported. In the US, the group reported its business had secured two new affinity partnerships representing 224,000 affinity partner households and in France and Spain, the group reported "good financial performance" and "strong growth in customer and policy numbers", respectively.
FTSE 250-listed international home emergency business HomeServe has said that adjusted profit before tax for the year ending March 31st would be 'in line with market expectations'. The group stated that it is continuing to grow its international businesses with new affinity partnerships and growing customer numbers and earnings. In the UK, it reported that it was continuing its transition to a smaller, more focused business. Customer numbers in the fiscal year 2013 were reported to be around 2.25m, within the lower end of the target range previously outlined by the company of between 2.2 and 2.4m. Less positively, the group reported that it expects its New Markets segment to report a fiscal year 2013 operating loss of approximately 5.5m, representing a 61.8 increase compared to the fiscal year 2012, when the business reported a 3.4m loss.
Homeserve: UBS raises target price from 200p to 250p, while its neutral rating remains unchanged.
Anyone see the article in the ES recently? I am sure it was the ES correct me if I am wrong....suggesting HSV to be arrogant for making no provision for a fine from the FSA...Do the ES know that there is a fine pending or if HSV did make a provision would that not appear to be presumtuous and therefore also arrogant? Also how much of a provision should be made? Anything between 50p and £50m would be a fair bet surely. Any opinions?
Typically I took a little profit out of this on Thursday , I should have waited another day....still it has financed the purchase of new car , a massive turkey (the bird variety not the car) , a little holiday for me and the girlfriend ( of the bird variety but not a massive turkey either,,,,). Many festive treats to you all
:) Though I agree whole heartedly with the sentiment. Mind you the upcoming div is probably helping us hold steady for the time being. Now if only they'd finalise the FSA thing.......
but I still have a generally good feeling about this , just keeps creeping up ever so quietly...now watch it crash as i have posted...sorry
Homeserve: Jefferies raises target price from 160p to 225p, hold recommendation unchanged. Numis raises target price from 176p to 260p, hold rating kept.
oh and The interim dividend was maintained at 3.63p per share.
Nevertheless, in the International business customers numbers have grown rapidly, up 20% and 42% in the US and Spain, respectively. As for the FSA issue, the regulator is continuing to gather and review information and HomeServe does not yet know of any findings. "Therefore, at this stage no provisions have been made for a fine, should one arise, or the costs of the FSA investigation. We expect the costs of the actions we are taking to address the sales and marketing, controls and governance and complaints handling issues in our UK business to remain in line with our previous expectations." The company reported free cash flow of £10.3m for the period, up from just £2.3m last year. Net debt increased from £66.0m at the end of the previous year to £78.1m.
Strong growth internationally saw home emergency repairs group HomeServe achieve a decent increase in revenue and profit in the first half despite a slight fall in customer numbers over the period, as it continues to refocus its UK business. Revenue during the six months to September 30th totalled £229.6m, up 8% on the £213.1m reported last year. Meanwhile, adjusted profit before tax rose 9% from £23.5m to £25.6m. Customer numbers were 2.5m at the end of the period, down from 3.0m at the half-year stage last year, while policy numbers fell from 7.5m to 6.0m. The company, which is still subject to a Financial Services Authority (FSA) investigation into so-called "certain historic issues", said that it is making progress in transitioning its UK business to a "smaller, more customer-focused operation". Chief Executive Officer Richard Harpin said: "In the UK we are currently testing a number of new marketing and product propositions, the effectiveness of which will determine the future shape and size of our UK business. Our business improvement initiatives are delivering increased customer satisfaction, significantly reduced complaint numbers and strengthened governance and control processes in the UK."
Think this will remain strong for a while yet.......and a great dividend to boot!
these in as in nearly 5 mths holding these and a bit of cash flow in december is needed for family and co. 60% rise cant be ignored. gla
anyone any thoughts? seems to be tracking sideways for now...still feel positive though
Homeserve advanced 12 to 235.2p, with one dealer suggesting hedge funds were closing positions following new shorting rules. Homeserve shares have risen for three consecutive days, after credit card insurer CPP revealed on Wednesday that US group Affinion had made a preliminary takeover approach. Both CPP and Homeserve, itself the subject of summer bid rumours, are being investigated by the Financial Services Authority. Liberum Capital said this week that the news from CPP “challenges the assumption” that a potential buyer would not look at Homeserve with the uncertainty from an FSA investigation hanging over it.
I would be 5.38% up on the day.....not me for one. Just goes to show how unpedictable HSV is.
I'm not complainng of course but I have no idea...maybe storm damage equals lots of insurance work or something , lots of volume
Interesting article in local paper. http://www.expressandstar.com/business/2012/10/30/walsall-based-homeserve-now-set-to-grow-again/ Any connection?
any ideas? if anything i'd expect us to have dropped as a result of US storms via insurance payouts......
well almost, still 2.23% up. This share just seems to fall back every time it rises. If it were not for the major investors who have built up big stakes I think I would dump HSV - but if they have confidence then so do I.
Please tell me these storms in the USA mean lots of work for the US business and therefore increased profits....
Jarcon , thank you for that observation , I tried to keep quiet but I can't it is bl**dy typical when we get warm and fuzzy about this stock it reminds us who is in charge. So I shall try to be positive but as quiet as a chuch mouse