Homeserve chief makes £66m after decision to sell shares

Mr Harpin, who commutes by helicopter from his office in the Midlands to his home near York, is selling almost a third of his stake to diversify his financial portfolio.

Homeserve said this is the first time Mr Harpin has sold shares in the company and he will retain around 12 per cent of the stock, a shareholding worth 175m, which he has pledged to keep for the next 12 months.

Mr Harpin told the Yorkshire Post he has no plans to sell any more shares, but 12 months was the maximum period he could sign up for.

"I've still got a 175m stake and I expect to see the value of that stake grow significantly," he said.

Asked whether he plans to buy a yacht in the Bahamas or indulge himself in any other way, he said absolutely not.

"Nothing gets in the way of the day job," he said, adding that he is absolutely committed to the group he founded. "The opportunities ahead for us are fantastic, both in the countries that we are already in and opportunities to open up additional geographies. I absolutely love it and am committed for the long term with Homeserve."

He said he had "no idea" what investments he will spend the 66.4m proceeds on, but said it was all about prudent financial planning.

Homeserve's shares fell almost five per cent following the announcement, but rallied to close down one per cent at 422p once it became evident that Mr Harpin is committed to the group.

The share sell-off, which was heavily oversubscribed, coincided with the news that the group is on track to meet its full-year targets.

Policies in Homeserve's core UK market increased to 7.2 million in the first six months of the year from 6.8 million a year earlier.

The group reported another half-year of strong growth and said it should benefit from the impending cold snap as it receives more calls to repair broken boilers and burst pipes.

The home maintenance and insurance firm is expecting an increase in emergency call-outs caused by this weekend's wintry weather, which is predicted to see temperatures drop below freezing in many parts of the UK.

Mr Harpin said: "Cold winters are good for us. They prove to customers the benefits of signing up for our membership. It will also bring in more customers who are not members, but who ring up and say they have an emergency."

More than two thirds of the people who call up in an emergency decide to become members.

The company reported a 19 per cent increase in global sales to 171m in the six months to September 30, with adjusted pre-tax profits up 13 per cent to 21.3m.

It is on target to expand its UK customer base by three or four per cent in the current year.

Homeserve signs up the majority of new home insurance policies in the winter.

In the UK, sales increased by 21 per cent to 132.3m in the half-year, and operating profits increased by nine per cent to 24.1m, which the company attributed to strong customer retention. Analysts at Panmure Gordon said the results were in line with its expectations, but downgraded its share recommendation from 'buy' to 'hold' following Mr Harpin's share sell-off, which it said was likely to dampen immediate investor enthusiasm.

Homeserve was originally set up in Walsall with 100,000 investment from water company South Staffs Water, who also provided a brand and set up support in return for 52 per cent of the joint venture.

Mr Harpin's ambitious plan was for the company to break even in the first year and be making 1m profit by year five. However, there were losses of 500,000 in the first year and South Staffs tried to close the business.

Mr Harpin persuaded the water company to come back on board with a proposition to sell the plumbing and drainage emergency service for an annual membership fee in return for sending out the plumber in two hours and covering the full repair bill.

By year five, Mr Harpin had signed up five other water companies and the business was making 7m a year.

But in 1999, the Government instructed all water companies to offer free underground water supply pipe repairs to customers. This could have destroyed the business, but Mr Harpin persuaded the water companies to offer a limited free service and let him market 'Gold Standard' cover, offering a two-hour response, up to 2,000 to cover an underground pipe repair or replacement, and covering reinstatement works.

The road to the top

Richard Harpin was born in Huddersfield and graduated with a degree in economics from York University.

He began his career as a marketing assistant with Proctor & Gamble before becoming a management consultant for Deloitte and later set up his own consultancy business.

In the early 1990s he came into contact with South Staffs Water and set up Homeserve with a 100,000 investment from the water company.

In 2003 the water company and Homeserve, which had a combined value of 300m, were split up.