Home emergency insurer Homeserve is set to expand further out of its Walsall base into new countries within Europe, chief executive Richard Harpin said yesterday.
Together with expansion in existing markets, this will provide strong growth, Mr Harpin said as the company, spun out of South Staffs Water in 2004, announced its annual results.
A team has been set up to look at acquisitions in Germany, northern Italy and the Benelux countries and is talking to water and power utilities there.
Homeserve plans entering such countries either through acquisitions, like the takoever of Reperalia in Spain in August 2007, or by buying an existing book of policies and pursuing organic growth from there.
Mr Harpin emphasised however, that he will be sure to make the most out of countries Homeserve is in already, such as Spain, France and the United States.
Homeserve, which sells policies and deals with all types of home emergencies and which employs more than 5,200 people, including 1,200 tradesmen such as plumbers and electricians, yesterday reported that 58 per cent of "accessible households" - those it can target - are already outside of the UK, yet international business makes up only 19 per cent of its policies.
Mr Harpin said that Homeserve's US business would go into profit from January 2009 onwards and that it has three utility deals - or marketing agreements - in the pipeline at the moment.
Along with its full-year results yesterday, Homeserve announced a new ten-year marketing agreement with Spain's leading energy company, Endesa, which supplies 9.2 million households.
The chief executive said he expects strong growth to come out of the contract, as Homeserve will start marketing in the Autumn, with an additional net investment of at least £2 million this year.
Within France, Domeo, its 49 per cent joint venture with Veolia, will identify new channels and products to maintain growth rates achieved in recent years.
Homeserve, which has 8.1 million policies in force and which has access to 53 million households worldwide, announced an 18 per cent increase in full-year pretax profit to £71.8 million and increased its total dividend by 25 per cent to 31.25p per share.
Revenues for the 12 months to March 31 rose by 16 per cent to £555 million.
The company's largest business is still in the UK with UK Membership, which saw 30 per cent growth profits, and UK Emergency Services which recorded a 10 per cent increase in profits.
Operating margins in UK Emergency Services, however, were flat at 5.4 per cent, as the volatility of insurance claims over the past 12 months impacted its higher margin directly employed networks.
Mr Harpin said he expects margins to increase by between one and 1.5 per cent in 2008 after taking measures which will lower volumes but drive margins in that division. He said that he has seen no impact from the credit crunch so far, and added that he believes Homeserve to be a defensive business. Home-serve's average customer has lived in one property for over 15 years, has paid off the mortgage and hence has limited exposure to crisis.
Furthermore, Mr Harpin added, customers want more protection, in the form of policies, in a recession.
Executive chairman Brian Whitty said: "Whilst we are carefully monitoring the potential impacts of the current economic climate, our policy businesses continue to show resilience through stable take-up rates from our direct marketing, and retention rates remain high.
"Overall Homeserve is well positioned for future growth."
Yesterday's results received a generally positive response from analysts but did not satisfy investors who sold its shares sharply in early trading.