HomeServe insurance income dips
BRITISH home insurance firm HomeServe said a prolonged marketing delay – prompted by concerns it may be mis-selling products – would hit customer numbers and renewal revenues harder than expected.
The group said yesterday total customer numbers could fall eight per cent in 2012, worse than its previous estimate of a five per cent decrease.
This means renewal revenue in 2013 will be around £10m lower than expectations. However, adjusted pretax profit for the year ending in March will still meet market expectations of £127m.
HomeServe also announced it will sack 200 UK staff after suspending its telesales operations in October.
The firm is reviewing marketing techniques, retraining sales staff and has reopened thousands of customer complaints.
The one-off cost of the restructuring, which also includes outsourcing its customer complaints division to a third party, are now expected to cost around £20m this year, compared to the £10m the firm estimated in November.
The group’s telephone sales unit, which will retain 100 staff, remains closed without a restart date.
Shares in the FTSE 250 firm – which have dropped 42 per cent since it suspended its UK sales activities – slipped a further 12 per cent yesterday to 240p.