Homeserve Share Discussion Threads

[pamjim12] 31/10/2011 14:40

Couldn't get in using TDW at share price 310p early on. Eventually in at 346 :-| Hello to all, Jim.

[deanroberthunt] 31/10/2011 14:02

people and hence the market have short term memories....

[deanroberthunt] 31/10/2011 13:59

I reckon its a storm in a teacup, short term the share price will be under fire, but like BP. with the Gulf disaster, medium/long term they are cheaper than chips.

Investec had a price target of 630p prior to this hiccup.

[masurenguy] 31/10/2011 13:55

Homeserve shares plunge on mis-selling claims

Shares in Homeserve (HSV.L) plunged over 50% this morning after the home maintenance firm suspended all telephone sales and marketing amid claims of mis-selling. An independent investigation by accountants at Deloitte into the company, which provides some 5 million customers with cover against home emergencies such as broken boilers and burst pipes, found that in many cases its UK telephone sales processes were sub-standard. Following Deloitte's findings, Homeserve immediately suspended all telephone sales and marketing activity until some 500 staff have undergone retraining.

Homeserve said customers making a claim or renewing their policy will be unaffected by the decision, and added that it will be able to start taking 'inbound calls' again from tomorrow. However, the company will not recommence 'outbound' sales calls to customers until it is confident staff have been retrained and that sales procedures have improved. Richard Harpin, chief executive of Homeserve, said: 'We are determined to ensure customers receive the highest standards of service and we have therefore taken swift action to address the issues identified by our review'. 'We have commenced a programme to re-train staff. We will resume marketing once we are confident that our sales processes meet the standards that we and our customers expect,' he added.

Homeserve's results for the six months ending 30 September 2011 will be announced on 22 November. The firm assured investors that it 'remains on track to achieve the consensus market forecast profit' for the full year ending 31 March 2012. Homeserve added that it has informed the FSA, which could fine the company if it has breached sales regulations, of the measures it has taken.

In July Ofcom accused energy giant Npower and Homeserve of breaching the rules around silent and abandoned calls, warning them that they could each face a fine of up to £2 million. Ofcom said it has reasonable grounds to believe the pair 'persistently misused' electronic communications, making an excessive number of abandoned calls to customers between 1 February and 21 March 2011. Homeserve shares have since pulled back, and after hitting a low of 328p earlier in the day, are now sitting at around 341p – a loss of 30% or 144p

[deanroberthunt] 31/10/2011 11:53

a minor drop stitch on the tapestry of life...

[mj19] 31/10/2011 11:45

Broker snap: Peel Hunt downgrades Homeserve after telesales suspension

Date: Monday 31 Oct 2011
Broker snap: Peel Hunt downgrades Homeserve after telesales suspension

Peel Hunt downgraded emergency repair services firm Homeserve from hold to sell, after the group announced that it is to suspend its telesales operation after an independent review.

Homeserve saw its shares plummet by over a quarter on Monday after audit firm Deloitte found "processes that did not meet the company's required standards." The firm responded by saying it has started "an immediate re-training programme for its telephone sales staff and is developing new scripts."

Peel Hunt said that it has put its forecasts (and 450p target) under review but expects to cut profit forecasts for the year ending 2013 by around 10%.

"This adds to concerns we already have about international growth expectations and we believe reputational knock-on could affect US and international progress further," said analyst Henry Carver.

Investec also published a note this morning, saying that it has put its buy rating and 630p target price under review following the news.

"We suspect the price fall will prove to be an overreaction, but until there is greater visibility on the extent of the issue and the risk, if any, of adverse publicity affecting other parts of the business and its ability to gain new partners, the shares are unlikely to rebound," said analyst Wayne Gerry.

By 10:58, shares were down 29.61% at 341.6p.

BC

[the ballcock] 31/10/2011 11:22

Thanks Masurenguy: could their be litigation cases on the way?

[was mejmillys] 31/10/2011 11:18

This news warrants about -10% at worst -15% fall which equates to between 440-420p. Way way overdone at this price that's for sure.

[masurenguy] 31/10/2011 11:07

The reason was that they reported a strong trading performance.

This fall seems overdone to me but the big unknown is the nature and extent of the mis-selling activity, the potential fine and reorganisation costs and the possible customer fall out from the negative publicity. The market hates uncertainty and therefore the reaction is probably overdone.

Their major competitor, D&G, is owned by private equity so you can't take advantage of any possible benefit that might subsequently accrue to them.

[the ballcock] 31/10/2011 10:55

how did HSV avoid the recent slump in the stock market until today?

[deanroberthunt] 31/10/2011 10:46

similar thing happened to CHTR, then there was a bid a few days later....just quessing but seen it before...

[deanroberthunt] 31/10/2011 10:41

quiet, just the way I like it :)

[was mejmillys] 31/10/2011 10:18

an absolute gift under 400p steam in.

[deanroberthunt] 31/10/2011 10:18

typical British service imo Gilly, they are not alone....

[gilly9] 31/10/2011 10:13

I dont hold here, but i was a customer of h/serve for a no of years and had to call them out in August, the service was absolutley third rate, the telephone help line was a complete waste of time, and they promised to get back to me regarding the poor service, needless to say they never did!!i have now gone to a competitor

[captain_kurt] 31/10/2011 09:18

This business is all about customer perceived trustworthiness.

Homeserve have none. Their name will be all over the media.

Plus none of their overseas business are making any money, and they won't
for the foreseeable future imo

These shares will head alot lower in the coming weeks imo

[deanroberthunt] 31/10/2011 09:12

The investigation is for not following company procedures, so they'll lose a few weeks sales and may get a fine if the issues are serious enough.

[grahamburn] 31/10/2011 09:03

captain_kurt. Though you are right to be concerned/suspicious of directors selling, think you may be over-egging your comments: it's not unusual, indeed it's very common, for directors to sell shares which are acquired as a result of options. You'll also note that they all still hold very substantial amounts.

[miked500] 31/10/2011 08:58

what is the mis-selling involved?

[captain_kurt] 31/10/2011 08:46

Do you see the pattern?
LOL

[captain_kurt] 31/10/2011 08:45

Miss Hughes sold 6,164 of the shares exercised on 18 July 2011 at a price of GBP4.885 and now holds 253,470 shares (0.07% of the issued shares).


It is announced that Jon Florsheim, a Director has sold 220,765 ordinary shares of 2.5 pence each in the capital of the Company (0.07% of the issued shares).

The shares were sold on 13 July 2011 at a price of GBP4.91 per share.

[dusseldorf] 31/10/2011 08:44

fairly safe to say deloitte found illegal practices and assumed this would lead to a fairly sizable fine and suggested immediate action to mitigate risk. The market hates unknowns