2015: No.18 - £200m
2014: No.20 - £150m
Richard Harpin’s HomeServe, the Walsall-based home maintenance and insurance firm, is busy building up its overseas business – in particular the United States.
HomeServe is seeing its policy of targeting the US market paying off. In November the group announced a £5 million investment in its US operation and has reported strong growth in customer numbers. These have increased by more than 20 per cent to 1.7 million following the signing of six utility partners, including an agreement with AARP, one of the largest membership organisations in the US.
International customers are up by 31 per cent to 3.8 million, with a strong performance in Spain.
In the six months to September 30, 2014, HomeServe reported revenue at £241.7m, broadly in line with the previous year. Pre-tax profits were slightly up at £26 million. In the full year to March 2014 HomeServe reported a rise in revenue to £568.3m.
However, profits took a hit, largely due to a £30.6 million fine handed out by the Financial Conduct Authority following a long-running inquiry into mis-selling. It was the largest ever retail fine handed out by watchdog, after the FCA found that HomeServe had “serious, systemic and long-running failings”.
The group is still rebuilding after more than £450 million was wiped off its share value in November 2011 when it suspended its telesales activities following an independent inquiry into its selling practices. HomeServe reacted quickly, suspending marketing calls, changing its marketing processes and launching into a retraining process for almost 500 call centre staff. Sales scripts were rewritten. Business-generated calls were suspended. A further £19 million was set aside to reimburse customers. More recently, the company set up a new telephone-based review service in which customers are encouraged to “rant and rave” about the service they receive.
Despite selling five per cent of his stake in the company in 2010, reaping a reported £66 million, Richard Harpin is still a significant shareholder with a stake worth around £127 million.
He remains chief executive at HomeServe and still commutes from his home in North Yorkshire, getting up at 5am to make sure he gets a swimming session in before starting work.
With HomeServe, Richard Harpin has turned an emergency plumbing business backed by South Staffordshire Water into a multinational company. Aged 50, he graduated from the University of York and joined Procter & Gamble’s marketing department. He became a brand manager but left after three and half years to become a management consultant with Deloitte. He stayed there a year before setting up his own management consultancy.
It was when he saw how difficult it was to get a reliable plumber in an emergency that he formulated his business model; an insurance product which would ensure a fast and efficient plumbing emergency service.
After several let-downs, he managed to sell the idea to South Staffordshire Water who gave him £100,000 for 52 per cent of the company. In 1993 HomeServe was born, offering plumbing and drains insurance to water company customers.
Within two years HomeServe was turning in profits and Harpin successfully marketed the idea to other water companies , giving him total UK coverage.
Having access to a large customer base through the water companies, he was able to offer other services. HomeServe now covers electrical wiring, pest control, home decorating, central heating boilers and glazing.
The focus in recent times has been on stabilising the UK business while going for growth overseas.