Home repairs outfit HomeServe has been forced to set aside an extra £19 million to pay out to customers affected by its mis-selling scandal.
The Walsall firm said in its half-year statement that it was set to complete payments by next March but the final compensation total was expected to be higher than originally forecast.
In the UK, revenue reduced by £7.3 million to £127.2 million from a reduction in customer numbers.
Adjusted operating profit was £22 million with the reduction in revenue being partially offset by lower costs.It added that 250,000 jobs were completed in the UK during the first half of the year with 60 per cent of these completed by the Homeserve network of tradesmen.
It added: “Income per customer was £106, up £1 compared to the prior period reflecting the mix and price of policies as well as the tenure of customers. Income per customer in the second half of the year is expected to reduce as we increase the proportion of new customers, who typically pay a lower price in the first year.”
The interim statement went on: “While our peak marketing and renewal months are in the second half of the year, our performance in the first six months has given us increased confidence and we now expect customer numbers in March to be around two million.The number of complaints received was 47 per cent lower than a year ago. The improvements in customer service, as well as the tenure of customers, have contributed to the policy retention rate increasing to 81 per cent in the first half of the year.”
Richard Harpin, HomeServe plc chief, said: “Our UK business has made good operational progress, our retention rate is improving and we now expect customer numbers to stabilise at a slightly higher level during 2014 than previously anticipated.
“We have made a good start, however our peak marketing and renewal period lies ahead of us in the second half of the year and we expect our full year performance to be in line with our previous expectations.”
