Emergency repair group Homeserve has reported higher profits but warned current conditions could reduce the full-year haul by up to £3 million.
The Walsall-based firm, which sells repair insurance and warranties, also announced an overhaul of its UK operations in an effort to improve efficiency and service. The reorganisation will cost around £3 million, with Homeserve chief executive Richard Harpin expecting "a small reduction" in headcount.
Homeserve reported a 10% rise in operating profits to £23.8 million for the six months to September 30, helped by further growth in its UK membership business after policy numbers rose 530,000 to 6.6 million. The retention rate reduced by one percentage point to 84% during the first half.
As the company moves into its busiest period of the year, it said it hoped its army of older, risk-averse customers would help protect the business from a consumer spending slowdown.
"However, if the poor retail environment persists and the recent fall in retention is maintained through our final quarter, this could reduce full year operating profit by some £2 million to £3 million," it added.
The reduced profits guidance caused Homeserve shares to open 14% lower, despite half-year results meeting expectations.
Kevin Lapwood, an analyst at Seymour Pierce stockbrokers, said he remained positive towards the stock: "There are some signs of a slowing of growth in the UK but we do not believe this to be seriously damaging to this year and is offset by strong growth overseas."
Homeserve employs around 5,500 people, of which some 1,250 are UK-based directly employed engineers. They operate from six sites.
The reorganisation will enable one division - UK Membership - to deliver and control service for the company's policy customers, from customer acquisition through claims handling to job completion.
The company said: "The new structure will improve efficiency and control over service delivery."
Homeserve is currently consulting with staff about the changes, which are expected to result in a small reduction in headcount.
It said the £5 million a year cost savings will provide additional resources to pursue potential future growth opportunities.