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Disposal

24th Sep 2009 07:00

RNS Number : 5850Z

Homeserve Plc

24 September 2009

HomeServe plc

Sale of Emergency Services Division

HomeServe plc today announces the sale of its Emergency Services Division (excluding the HomeServe Property Repairs businesses) (the "HES Disposal Division") to a newly incorporated company backed by Lloyds TSB Development Capital Limited and management. The total consideration will be up to £11 million (before transaction costs) of which £7.3 million was paid in cash on completion.

The HES Disposal Division consists of the businesses operated by HomeServe Glass & Locks, HomeServe Contents Services and Chem-Dry. These businesses provide repair and replacement services primarily to the end customer/ policyholder of general insurers in the United Kingdom through a network of directly employed, franchised and sub-contract engineers.

In its last reported financial year to 31 March 2009, the HES Disposal Division generated a statutory profit before tax of £2.4 million and had gross assets of £54 million. We expect that this transaction will result in a loss on disposal of up to £25m and that the net cash proceeds will be used to reduce the Group’s net debt.

The sale of the HES Disposal Division is consistent with HomeServe plc's previously announced strategic objectives enabling it to focus on the Group's higher margin, higher growth membership businesses.

The Board continues to explore a range of options for the HomeServe Property Repairs businesses which are experiencing challenging market conditions. A further announcement will be made in due course.

Richard Harpin, Chief Executive commented:

“Following the successful reorganisation of our UK business and the decision to exit from the Emergency Services activities, today’s announcement is a major step forward in the execution of our strategy. HomeServe is now focused on building a worldwide membership business from which we are well placed to deliver growth this financial year and into the future.”

24 September 2009

Enquiries:

HomeServe plc Tel: 01922 655 332

Richard Harpin, Chief Executive

Martin Bennett, Chief Financial Officer

Mathew Wootton, Investor Relations Director

Tulchan Group Tel: 020 7353 4200

Andrew Honnor

Stephen Malthouse

This information is provided by RNS

The company news service from the London Stock Exchange

END

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