D&G confident of future after 158% rise in profit

Domestic & General (D&G) said it was confident of future progress after it reported a 158% rise in pre-tax profits for the nine months ended 31 March 2004, reaching £17m.

The group has changed its year end to 31 March and so reported nine-month figures compared with pro forma accounts for the same period in the previous year.

Operating profit before goodwill increased by 55.2%, said the company, reaching £16.3m for the nine months.

Total turnover was up 6.4% to £174.1m from £163.6m, while UK warranty turnover increased by 9.4% from £142.4m to £155.8m for the nine months.

Operating profits for the group's UK warranty business helped push up overall figures with a 141% increase in the nine months. Operating profit for warranty operations rose from £4.6m in 2003 to £11.1m for the nine months in 2004.

D&G said warranty turnover had slowed after large increases in the last two years, which resulted from major account wins.

D&G said the Competition Commission inquiry into the UK warranty market, and the associated negative publicity, had generally affected the market. But it said its increase in turnover was satisfactory.

The group's support services activity, primarily the Inkfish call centre business, continued to experience a very competitive trading market, resulting in a small divisional loss of £100,000 in the period under review, the company reported.

Chairman Nicholas Rochez said the group expects to maintain growth in warranty turnover at the levels seen over the present accounting period, as the market adapts to the introduction of the remedies published by the Competition Commission.

“We expect our claims ratio to settle within our normal range of expectation through this period.”

He said the board intended to continue to review both complementary products and geographical areas, to experiment with the same and to seek further opportunities to develop its relationships with both customers and trade partners.