Homeserve’s woes continue

| February 8, 2012
Homeserve’s woes continue

Emergency household repairs company Homeserve is taking longer than expected to get back on track after its operations were suspended last October.

The company expected customer numbers to fall by 5% this year but it has increased this estimate to 8% and announced the loss of 200 jobs.

It estimates that renewal revenue in 2013 will be around £10 million lower, while adjusted pretax profit for the year to 31 March 2012 is expected be in line with market expectations of £127 million.

Homeserve, which calls itself “Britain’s fifth emergency service”, provides insurance cover against domestic emergencies such as burst pipes and boiler breakdowns.

It was unable to deal with the high volume of requests for boiler repairs during last year’s severe winter weather and a subsequent audit of its sales techniques by Deloitte revealed issues with standards and raised concern that it could be mis-selling products.

This led to Homeserve suspending it operations in order to retrain staff and overhaul its marketing techniques, but this is taking longer to complete than expected and costing significantly more than anticipated.

The company has restarted taking inbound calls in all but one region and has re-launched its mail marketing campaign.

Earlier this year Homeserve promoted its group chief financial officer, Martin Bennett, to the new position of group chief operating officer.

His new role gives him responsibility for best practice and risk management.

David Bower, HomeServe’s Financial Director is covering the interim CFO role while a permanent replacement is recruited.

Homeserve, which was created as a joint venture with South Staffordshire Water in 1993, operates in the US, France, Spain and Belgium as well as in the UK.

It has issued more than 10 million policies to 4.5 million customers.

South Staffordshire Water plc demerged from the group in 2004.

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