Preliminary Results 2005 HighlightsoftheYear Earningspershare * - PowerPoint PPT Presentation

Preliminary Results 2005

Highlights฀of฀the฀Year ฀ Earnings฀per฀share * ฀ 46.7p ฀ 36.0p ° ฀ 29.7% ฀ ฀ ฀ ฀ ฀ ฀ £32.5m฀ ฀ ฀ ฀ °Taking฀account฀of฀the฀share฀consolidation฀ ฀ ฀ *Excluding฀goodwill฀and฀exceptional฀costs ฀ ฀ 29.3%฀ £42.0m฀ 1 ฀ Continuing฀Operations฀ 2005฀ 2004฀ Increase฀ ฀ ฀ ฀ ฀ ฀ Profit฀before฀tax * ฀ Turnover฀ £223.1m฀ £169.2m฀ 31.8% Operating฀profit * ฀ £42.4m฀ £32.4m฀ 30.8%฀ ฀

Achievements฀in฀2005 2 Emergency businesses growth plans ● Completion of Water Company demerger ● Disposal of Commercial Outsourcing operations for £22m ● £34m invested in expanding core Home ● Investment in depth of management to support ● Rebranding Emergency Repair business as Homeserve ● Developing fully integrated service to insurers

Highlights฀of฀2005 24.0 2004 2003 2002 2001 2000 7.4 10.8 14.1 32.4 42.4 Operating฀Profit฀Growth 3 for continuing operations 2005 ● 31% increase in operating profit to £42.4m ● 32% UK policy growth to 3.88m ● France operating profitably ● Signed 3rd Partner in USA with 41,000 policies ● Efficiency gains in UK employed networks ● Downturn in retail furniture market

Profit฀and฀Loss฀-฀Continuing฀Operations 29.0 29.3 Tax (13.0) (10.1) 28.6 Earnings 22.4 42.0 29.6 EPS* 46.7p 36.0p 29.7 4 All figures before goodwill and exceptional items *Taking account of share consolidation - Exceptional operating cost of £2.8m re Courts - Exceptional non-operating costs of £39.1m re loss on disposals 32.5 Year Ended 31 March 2005 31.8 £’million 2005 2004 % Turnover 223.1 169.2 Operating Profit 42.4 32.4 30.8 Interest (0.4) 0.1 - Profit Before Tax - Goodwill of £10.4m (2004: £7.2m)

Turnover฀and฀Operating฀Profit - Emergency Repair 100.2 37.2 4.9 80.7 73.1 2.7 Inter-Division (7.7) - - 100.3 (4.2) - 223.1 31.8 42.4 30.8 169.2 32.4 29.7 26.3 £’million % 2005 2004 Turnover % Operating Turnover 37.5 Operating Profit Profit Policy Membership 130.6 30.1 5

Policy฀Membership - Small profit in Doméo - Losses of £1.1m - Retention maintained at 88% - Cost of acquisition reduced 6 29.7 100.3 26.3 37.5 30.1 130.6 Policy Membership Profit Turnover % Profit 2005 2004 % Operating Operating £’million Turnover - Profit £1.6m including repair ● Homeserve GB ● International ● Retail Warranty

Emergency฀Repair % - Conversion increased from 80% to 85% - Turnover £56m (2004: £48m), Profit £3.1m (2004: £0.3m) 7 2.7 73.1 80.7 4.9 37.2 100.2 Emergency Repair Profit Turnover % Profit Turnover £’million 2005 2004 Operating Operating ● Margins improved to 5% ● Highway ● Sergon turnover £13m ● Good performance from Claims Management

Cash฀Flow฀-฀Continuing฀Operations (4.4) Equity Dividends - 19.0 Disposals (20.2) Acquisitions (3.9) (7.8) (7.7) Capital Expenditure 12.3 8 0.6 11.2 Net Funds 5.2 (11.7) Increase in Cash (0.6) (2.1) Financing (8.5) Year ended 31 March 2005 (Increase)/Decrease in working capital and loss in JV 3.2 4.7 Depreciation and profit on disposal 32.4 42.4 (1.0) Operating Profit* 2004 2005 £’million 1.1 (10.2) Net interest/dividends to minority Taxation (1.4) (1.6) 35.7 Exceptional Costs 42.9 Net Cash inflow from operating activities (1.0) (3.2) *Pre goodwill and exceptional costs

Balance฀Sheet (18) Deferred Consideration (5) (10) Deferred Income (15) (20) Net Funds/(Debt) 11 (93) Provisions for Liabilities and Charges (1) (10) Net฀Assets฀ ฀ ฀ 160฀ 143฀ (7) Year ended 31 March 2005 £’million 2005 2004 Fixed Assets Net Current Liabilities - Goodwill 154 108 - Tangible 23 186 9

Acquisitions 1.5 14.6 18.9 1.0 Net Assets - 0.5 (0.1) (0.2) 0.2 4.8 - Goodwill 0.3 0.9 1.0 11.6 14.4 14.1 1.0 Excluding acquisition of minority interests in April 2004 *Turnover £22m, operating profit £0.7m, six months ending June 2004 **Turnover £37m, operating profit £2.6m, year ending April 2004 10 11.4 0.8 Acquisitions: Restoration Principal Disaster Doméo Total United Choice 1.5 Sergon For Year Chem-Dry Water May 2004 Jul 2004 Nov 2004 Dec 2004 * April 2005 ** May 2005 Consideration 9%

IFRS - Charge expected to be in the region of 5% of operating profit - No routine amortisation - Annual impairment test - Actuarial gain/loss to reserves - Defined benefit scheme not significant - First £0.4m Doméo profits cannot be recognised in 2005/06 - No effect 11 ● IFRS 2 Share Based Payments ● IFRS 3 Business Combinations ● IAS 19 Pension Accounting ● IAS 31 Interests in Joint Ventures ● IAS 18 Income Recognition ● Impact on opening Balance Sheet not material