0R15 8884.0068 1.4156% 0R1E 9171.0 0.0% 0M69 None None% 0R2V 255.5 0.3929% 0QYR 1619.0 0.0% 0QYP 434.5 -0.344% 0RUK None None% 0RYA 1600.0 4.5752% 0RIH 195.2 1.3763% 0RIH 195.2 1.3763% 0R1O 225.5 9877.8761% 0R1O None None% 0QFP None None% 0M2Z 255.0 0.2457% 0VSO 33.3 -6.4738% 0R1I None None% 0QZI 596.0 0.0% 0QZ0 220.0 0.0% 0NZF None None% 0YXG 236.3943 1.5483%
HomeServe PLC (LON: HSV)
HomeServe PLC is an FTSE 250 index listed United Kingdom-based company. It is engaged in providing repair, home emergency and heating installation services. The Company operates in UK, North America, Spain, France, and other emerging Markets. HSV is engaged in the design of a range of water, heating and electrical related home assistance products and offers connected home solutions.
Recent trend of Dividend Payments
HSV had paid an interim dividend of 6.80 pence per share attributable for H1 FY22 on 07 January 2022 with an ex-dividend date of 09 December 2021, driven by excellent bottom-line profitability growth achieved during the period. In comparison, the Company had paid an interim dividend of 6.20 pence per share for the prior year. Thus, the interim dividend growth came out to be around 10%.
(Source: LSE; Analysis done by Kalkine Group)
Growth Prospects
Key Risks
Key Fundamental Statistics & Shareholding Pattern of HomeServe PLC.
Harpin (Richard David) is the most significant shareholder as it holds nearly 40.94 million shares as of 31 December 2021.
Financial Highlights (for the six months ended 30 September 2021, as of 16 November 2021)
(Source: Company Filings)
Financial Ratios (H1 FY22)
Share Price Performance Analysis
(Source: Refinitiv; Analysis done by Kalkine Group)
On 28 February 2022, at 09:27 AM GMT, HSV’s shares were trading at GBX 660.00, down by around 1.71% from the previous day closing price. Stock 52-week High and Low were GBX 1,218.00 and GBX 659.00, respectively.
From a technical standpoint, HSV is hovering around the lower Bollinger band, indicating an upside potential in the stock price. Moreover, the 14-days RSI of ~23.24 confirms an oversold position.
Valuation Methodology: Price/Earnings Approach (FY22E)
Business Outlook
HSV has produced a stellar H1 FY22 business performance with significant growth in top-line revenue and bottom-line profitability. The Home Experts division remained on track to achieve profitability during FY22. The Board remained confident to deliver an acceleration in performance in FY22 compared to FY21. Moreover, the increase in the interim dividend was underpinned by business resilience, strong future growth potential, and robust cash generation. In a nutshell, the Company would keep generating long term returns for the shareholders with an increased focus on sustainable growth in North America, market-leading Home Experts platform and broadening of the UK business.
Markets are trading in a highly volatile zone currently due to certain macro-economic and geopolitical tensions prevailing. Therefore, it is prudent to follow a cautious approach while investing.
Considering the expansion opportunities, robust profitability, regular dividend payments, decent financial performance during H1 FY22, and support from the valuation as done using the above method, we have given a “BUY” recommendation on HomeServe PLC at the current market price of GBX 660.00 (as of 28 February 2022 at 09:27 AM GMT), with lower-double digit upside potential based on 16.64x Price/NTM Earnings (approx.) on FY22E earnings per share (approx.).
Note 1: The reference data in this report has been partly sourced from REFINITIV.
Note 2: Investment decision should be made depending on the investors’ appetite on upside potential, risks, holding duration, and any previous holdings. Investors can consider exiting from the stock if the Target Price mentioned as per the Valuation has been achieved and subject to the factors discussed above.
Note 3: Dividend Yield may vary as per the stock price movement.
Note 4: Target Price refers to a price level which the stock is expected to reach as per the relative valuation method and or technical analysis taking into consideration both short-term and long-term scenarios.
Technical Indicators Defined: -
Support: A level where-in the stock prices tend to find support if they are falling, and downtrend may take a pause backed by demand or buying interest.
Resistance: A level where-in the stock prices tend to find resistance when they are rising, and uptrend may take a pause due to profit booking or selling interest.
Stop-loss: It is a level to protect further losses in case of unfavorable movement in the stock prices.
Disclaimer
References to ‘Kalkine’, ‘we’, ‘our’ and ‘us’ refer to Kalkine Limited.
This website is a service of Kalkine Limited. Kalkine Limited is a private limited company, incorporated in England and Wales with registration number 07903332. Kalkine Limited is authorised and regulated by the Financial Conduct Authority under reference number 579414.
The article has been prepared for informational purposes only and is not intended to be used as a complete source of information on any particular company. No advice or information, whether oral or written, obtained by you from Kalkine or through or from the service shall create any warranty not expressly stated. Kalkine does not intend to exclude any liability which it is not permitted to exclude under applicable law or regulation.
Kalkine does not offer financial advice based upon your personal financial situation or goals, and we shall NOT be held liable for any investment or trading losses you may incur by using the opinions expressed in our publications, market updates, news alerts and corporate profiles. Kalkine does not intend to exclude any liability which it is not permitted to exclude under applicable law or regulation. Kalkine’s non-personalised advice does not in any way endorse or recommend individuals, investment products or services for your personal financial situation. You should discuss your portfolios and the risk tolerance level appropriate for your personal financial situation, with a professional authorised financial planner and adviser. You should be aware that the value of any investment and the income from it can go down as well as up and you may not get back the amount invested.
Kalkine Media Limited, an affiliate of Kalkine Limited, may have received, or be entitled to receive, financial consideration in connection with providing information about certain entity(s) covered on its website.