ServiceMaster Announces Full-Year 2019 Revenue Growth
ServiceMaster has announced a year-on-year increase in revenue to US $2,077 million (a rise of 9 per cent) with net income of $128 million which includes an 11 per cent increase over the final quarter of 2019.
Net income growth in the final quarter of the year was negatively impacted by a US $40 million increase in the group’s provision for litigated and settled termite damage claims, with the company also announcing it has completed a statistical analysis of its future exposure to historic claims for termite damage and is making exceptional provision of US $230 million to cover claims-related expenses until 2024 (after which it expects claims to revert to historic levels of between four and five per cent of revenue from termite and home services).
Announcing the results, ServiceMaster Chairman and interim CEO, Naren Gursahaney, said:
“Both the Terminix and ServiceMaster Brands segments delivered strong progress against our 2019 strategic initiatives.
“As we announced in January, we are conducting a strategic review of our ServiceMaster Brands business, including a possible sale of the business. This decision reflects our emphasis on driving long-term shareholder value.
“At Terminix, solid full-year gains in net promoter scores and retention led to 2.6 per cent organic revenue growth, meeting increased guidance estimates. We are continuing our progress transforming the Terminix business, and improved prioritization and alignment across the business on our key strategic priorities will drive continued retention improvements and margin expansion in 2020. We remain laser-focused on the termite business, including the execution of our termite damage claims mitigation program that will better protect our customers and manage our risks.
“I am encouraged by our progress and remain convinced we are on the right path towards delivering sustainable, profitable growth at or above industry levels.”