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Homeserve founder-CEO talks US expansion (and shares tips on how to make sales across the pond)

·3-min read
<p>Home repair and improvements business Homeserve was promoted to the FTSE100 last spring </p> (Homeserve)

Home repair and improvements business Homeserve was promoted to the FTSE100 last spring

(Homeserve)

Home repair and improvements business Homeserve was promoted to the FTSE100 last spring and on Tuesday reported significant revenue growth fuelled by its current US expansion.

Its founder and chief executive, Richard Harpin, founded the Walsall-based business 27 years ago. Now the firm runs the Checkatrade website alongside a round-the-clock repairs business, offering a service that guarantees someone will come round to your house and fix your boiler, heating or plumbing, in return for a monthly premium.

Harpin has said he always dreamed of taking the business global, and that making the FTSE 100 was "only the beginning for Homeserve".

This week the firm reported revenues up 15% to just over £1.3 billion in the year to April.

US revenues were up 22% to $665.8 million in the year, with operating profits up 27% to $138 million, and the firm said its new partner pipeline is at "its strongest ever". Its eLocal US offering alone delivered adjusted operating profit of $18 million, ahead of expectations.

Many British companies struggle to see success when they launch across the pond. What does Harpin believe firms need to do to make it stateside?

The founder told the Standard: "In North America our retention rate increased from 83% to 85% last year, and we are seeing big growth over there. We are getting towards our medium-term target of $238 million profit, and are now at 4.7 million customers.

"The key really [to growth in America] is to work with local companies, to have a big American team out there running the business, singing up more utilities, showing that it's a no-brainer [to partner]."

Harpin said it helps that the firm pays a risk-free commission to new US partners for every customer it signs up, and for every additional policy it upsells to partners' existing customers.

Over in the UK, Homeserve's customer numbers fell in the year. But Harpin said its online Checkatrade demand is showing no signs of stopping, as desk-based professionals expect to be working from home at least part time going forward.

Since the pandemic hit the company has also launched a new product for "responsible employers" to provide home assistance cover for remote workers to keep the home office running.

The company's latest survey of 2,000 homeowners showed they spent 15% more last year on doing up their homes, with 80% saying they are "planning a refresher" in the next 12 months.

Harpin said: "What's coming out of this pandemic is we are all using our homes more... We're seeing no let-up in consumer demand coming to the Checkatrade platform, and we are confident overall that we will see a big acceleration across the growth of the whole of Homeserve in the 2022 financial year."

Despite seeing rising revenues, the company's statutory pre-tax profit fell 66% to £47.2 million, which HomeServe said was due to a decision to write down its struggling UK customer relations management system at a cost of £84.8 million, and its "move to a more flexible cloud-based solution" in the UK.

Adjusted pre tax profits were up 6% to £191.3 million in the year, the company said, while net debt rose 1% in the period, to £513.7 million.

HomeServe said on Tuesday that supported by "business resilience, cash generation and strong future growth potential", its total annual dividend to shareholders would be 26p - up 10% on 2019.

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