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Business News

Homeserve sets £6m aside in FCA inquiry

Homeserve, the emergency repairs company at the centre of a long-running inquiry into alleged mis-selling, is bracing itself for a £6m fine from the City's watchdog.

The company, which insures customers against domestic mishaps such as broken boilers, made the provision for costs relating to the Financial Conduct Authority investigation launched last year. Shares in Homeserve have halved since October 2011 when it suspended its call-centre sales force after the claims emerged. Profits for the year to 31 March, down 51 per cent at £67m, were also hit by costs of 300 UK job losses earlier this year, write-offs on its French business and weaker trading.

The shares ticked 10 per cent higher to 250.2p, however. Andy Brown, an analyst at Panmure Gordon, said: "The provision for its costs and potential fine, if achieved, is lower than expected and removes a major uncertainty."

Richard Harpin, the chief executive, said complaints had fallen 40 per cent. But Homeserve lost 400,000 customers last year, leaving it with 2.3 million in the UK.