Profits fell at Domestic & General after the warranty insurer was hit by high claims, low interest rates and high expenses and the poor performance of its Inkfish call centres.

Operating profit for the year ended 30 June was down by 18.6% to £14.9m from £18.3m in the year before.

Profit before tax fell by 14.3% to £12.6m from £14.7m.

Domestic & General specialises in insuring domestic appliance warranties. It covers five million appliances and handled 1.4 million claims last year.

The fall in bottom line results came despite total turnover being increased in the period by 28.3%, reflecting new account wins.

Like for like turnover increased by 27% to £218.7m.

But managing director Tim Scrivener warned that the growth rates would not last.

"The rate of top-line growth is slowing," he reported, "and will tend over time to go back to the growth rates of the late 1990s."

He added: "Growth in our support services division has been disappointing and the overall results for the year fell short of expectations."

Revenue from support services - including the Inkfish subsidiary - was almost stagnant, at 1% growth, compared to 38% growth in EU warranty business outside the UK and 30% growth in UK warranty business.

Results box

  • Profit before tax down 14.3% to £12.6m from £14.7m
  • Total turnover up 28.3% to £220.9m from £172.2m
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