Trading Statement

Pre-Close Trading Statement

HomeServe plc, the international home emergency business, today publishes the following trading update prior to entering its close period for the 6 months ending 30 September 2012.

Summary and Outlook

HomeServe is continuing to grow and develop its International operations and in the UK is making progress in simplifying and refocusing its business.

As in previous periods, revenue and profit will be weighted towards the second half of our financial year reflecting the seasonality of our marketing activity and associated renewals profile.

Adjusted pre-tax profit1 for the six months ending 30 September 2012 is expected to be higher than the prior period (HY12: £23.5m) principally due to the benefits of 100% ownership of Doméo (HY12: 49%), combined with a strong financial performance from that business.

Our outlook for the full year remains unchanged.

United Kingdom

In the UK we are on track to achieve our full year customer number target of between 2.2m and 2.4m and a policy retention rate of around 80%. Customer numbers at the end of September 2012 are expected to be around 2.5m (HY12: 3.0m) and the policy retention rate is expected to be around 78%.

We are making progress in implementing our plans to reshape our UK business and restore its customer focus. Our affinity partners remain supportive of our actions and in the past two months, we have successfully renewed two of our larger water company relationships. We are continuing to develop and implement our marketing plans, focusing on different creative propositions, with the next phase of testing expected to begin in the next few weeks.

We are continuing to implement our business improvement initiatives relating to governance and controls, sales and marketing and customer service all of which are consistent with the feedback received from our Supervisory team at the Financial Services Authority (FSA). We are already beginning to see benefits of these initiatives with increasing customer satisfaction and reduced complaints being received. We have also started our customer recontact exercise. The FSA's investigation into our past issues has commenced but will, as previously reported, take a number of months to complete.

UK operating profit is expected to be similar to the prior period (HY12: £25.8m) with lower revenue and the increased costs of improved governance and control being offset by reduced marketing activity and other efficiency savings.

USA

Our USA business is achieving strong growth in customer and policy numbers with both expected to be around 20% higher at the end of September 2012 compared to September 2011. The growth in customer numbers is being driven by increased marketing spend which is expected to result in higher revenues and an operating loss in the first half of the current financial year (HY12: £0.8m loss). The retention rate remains high at around 79%.

France

In France, Doméo has maintained a high retention rate of around 87% and this, together with an increase in income per customer, is expected to result in a strong financial performance in the period. Customer and policy growth in the first half of the year is expected to be lower than in previous periods reflecting the timing and number of marketing campaigns undertaken.

Spain

In Spain, we expect the number of customers and policies at the end of September 2012 to be over 35% higher compared to 30 September 2011. We expect the operating loss in Spain in the first half of the year to be lower than in the same period last year (HY12: £1.0m loss), reflecting both the growth in the membership business and improved operating efficiency in the claims handling operation.

New markets

We are continuing to invest in marketing in Italy and have also sent out our first test marketing campaigns in Germany. This activity together with our continued development of SFG, our French warranty business, is expected to result in our New Markets segment reporting an operating loss of around £2.5m in the first half of the year (HY12: £1.0m loss).

Financial position

HomeServe's financial position remains strong with net debt at 30 September 2012 expected to be around £75m (31 March 2012: £66.0m), providing significant headroom against our committed facility of £250m.

Conference Call

A conference call for analysts and investors will take place at 8.30am this morning. The conference call can be accessed by dialling +44 (0)20 3140 0668 and pin code 783771#. A replay of this call can be heard by dialling +44 (0)20 3140 0698 and pin code 387063# later in the day for a period of 2 weeks.

Contacts

HomeServe plc Tel: 01922 427979

Richard Harpin, Chief Executive

David Bower, Interim Chief Financial Officer

Mark Jones, Head of Investor Relations

Tulchan Group Tel: 0207 353 4200

Christian Cowley

Ed Orlebar

HomeServe will publish its interim results for the 6 months ended 30 September 2012 on 20 November 2012. More information on HomeServe plc can be found on our corporate website: www.HomeServeplc.com

Notes

1. Adjusted pre-tax profit excludes the amortisation of acquisition intangibles, joint venture taxation and exceptional expenditure.