Homeserve has opted to return additional cash to shareholders by announcing a special dividend payment of £97m, but chief executive Richard Harpin said he had money left for more acquisitions this year.
The repair and insurance company will pay shareholders a special dividend of 30 pence per share in July on top of a rise in payouts for its 2014-15 financial year, opting to return money to shareholders instead of a share buyback, which some analysts had expected, or making large acquisitions.
“We believe today’s special dividend could become a regular feature with little of magnitude to acquire,” said analysts at RBC.
Although the outlook for large deals is scant, Mr Harpin expects a few smaller transactions this year, mainly in the United States, to grow customer numbers.
“In terms of big deals, we still have the firepower to grow by one or two policy books in the U.S.,” Mr Harpin said.
The company signed 800,000 new customers in its financial year ending March 31, helping it book a 3.8 percent rise in revenue to £584.2m. This led to adjusted pre-tax profits of £85.4m, slightly ahead of analyst consensus.
Homeserve said it expected strong growth in the U.S. and Spain this year to offset currency and investment spending in France.