Share price drops 10% as £10m charge revealed
Home repair insurer Homeserve’s shares dropped 9.8% in yesterday’s trading after the company revealed that it would cost millions of pounds to rectify its mis-selling error.
Homeserve’s share price closed yesterday at 225.10p, compared with Monday’s close of 249.50p. The company revealed in its results for the six months to September 2011 that it would pay £10m of restructuring costs in the second half of the year, plus a further £10m a year for “reinvigorating our customer focus and processes”.
The company was forced to suspend mail marketing and taking new customer calls in October after an internal review found it had been mis-selling policies.
The company said in its results announcements that it was taking “decisive and corrective action” over the mis-selling discovery and was making progress in developing new sales scripts and re-training call centre agents.
The share price fall came despite Homeserve announcing a 25% increase in revenue to £213.1m for the six months to September 2011 and a 2% increase in profit before tax to £18.2m.
Hosted by comedian and actor Tom Allen, 34 Gold, 23 Silver and 22 Bronze awards were handed out across an amazing 34 categories recognising brilliance and innovation right across the breadth of UK general insurance.
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