Domestic & General's operating profits dropped 23.2% to £7.3m in the six months up to 31 December 2002, with a decrease on a like-for-like basis of 21.1%.

This was despite turnover increasing 39.1% to £107.4m.

Meanwhile, the value of Domestic & General's equity portfolio decreased by £2m, resulting in a 40% drop in total profits to £4.8m.

Despite the losses, Domestic & General hiked its interim dividend by 10.1% to 6.78p per ordinary share.

Turnover in the group's warranty division climbed 42.6% to £96.1m.

The warranty division's earned income increased by 33.8% to £72.9m, but the rise was offset by the increase in new business, which led to both higher claims ratios and higher expenses.

As a result, the overall contribution from the group's warranty division dropped to £3.6m.

The group's support services reported a 5.5% increase in turnover.

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