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HomeServe warns on profit as UK customer numbers fall

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(Globalpost/GlobalPost)

LONDON (Reuters) - HomeServe <HSV.L> warned its profit in 2014 and 2015 would be below expectations as it forecast falling numbers of customers in Britain for its repair and insurance services.

Shares in the firm, which is being investigated by regulators over policy mis-selling concerns, fell 10 percent at the market open on Friday.

HomeServe, which sells cover for and fixes boilers and burst pipes, said that it expects its UK business to contribute 35 million pounds less than expected in 2014, with customer numbers bottoming out at 1.9 million by March 2014.

It expects to partially offset the fall in business by cutting 300 jobs.

The job losses are on top of 300 announced after the Financial Services Authority launched an investigation in May last year into alleged mis-selling of HomeServe policies, almost halving its share price.

"It has become clear that new marketing is not sufficiently effective to deliver gross adds which offset annual policy losses," David Brockton, an analyst from Espirito Santo, said.

HomeServe is trying to offset the shrinkage of its British business by looking abroad for growth, and said that it is aiming for roughly a 50/50 profit split between British and international business in the medium term.

Shares in HomeServe were down 9 percent to 202 pence by 0844 GMT.

(Reporting By Christine Murray, Editing by Rosalba O'Brien)

http://www.globalpost.com/dispatch/news/thomson-reuters/130322/homeserve-warns-profit-uk-customer-numbers-fall