22 Oct 2003

Egg plc Results for the Nine Months to 30 September 2003

“Egg UK has delivered another impressive performance this quarter with strong growth in customer numbers, lending balances and profits. Egg now has over 3 million customers in the UK. In France our new management team has developed a strong, value-creating business plan based on both our experience since launch and further research with consumers. However having regard to our previously announced appetite for investment, execution of this revised plan will take longer and requires a greater level of investment than Egg is prepared to undertake on a stand-alone basis. We believe it is in the best interests of Egg’s shareholders to form an alliance with a strategic partner and accordingly, we are in negotiations which may lead to a joint venture or other transaction. We anticipate that these negotiations will be concluded by the end of this year.”

Paul Gratton, CEO, Egg plc

Highlights:

Analysis of Group Profit and Loss Account

Group

• Group operating income up 32% to £310.6 million (30 Sep 2002: £235.6 million)
• Group loss before tax of £24.9 million (30 Sep 2002: £3.9 million)
• Group loss per share 3.1p (30 Sep 2002: 1.1p)
• Total group assets of £11.5 billion (30 Sep 2002: £10.4 billion)

UK

• Egg UK delivered a profit before tax for the nine months to September of £56.7 million (30 Sep 2002: £21.0 million)
• Q3 2003 profit before tax was £20.0 million up from £19.4 million in Q2 2003
• Egg customer base now over 3 million with 145,000 net new customers acquired in the third quarter (Q3 2002: 107,000)
• Unsecured lending balances grew by £1.13 billion (30 Sep 2002: £0.70 billion) leading to period end balances of £4.43 billion (30 Sep 2002: £3.06 billion)
• Strong sales growth in personal loans with drawdowns of £1.2 billion year to date, more than double the levels achieved in equivalent period in 2002 (£535 million)
• Credit quality remains strong with card delinquency levels still well below industry average

France

• Balances growing strongly to €126 million (Q2 2003: €68 million)
• 58,000 cards in issue with 76% of card balances now revolving (up from 70% in Q2)
• Loss before tax of £69.5 million (€100.5 million) for period to 30 September 2003

Chief Executive Paul Gratton said:

“The UK business is growing strongly, and delivered a profit before tax of £20 million in the period taking the year to date total to £57 million. Sales performance remained strong on a seasonally adjusted basis in the third quarter with 145,000 customers acquired compared to 107,000 in the same period last year. It is particularly pleasing given the variety of new competitor offers during the quarter, that our marketing efficiency has been maintained at approximately £24 unit marketing cost per card acquired which we believe is about half the industry average.

“Unsecured lending balances have increased by over £1.1 billion year to date, up 61% on the same period last year. Personal loans performed especially well with disbursements of £1.2 billion and net balance growth of £569 million. Egg’s market share in cards is growing robustly and we now account for approximately 10% of the net growth in UK credit card balances.

“We confirmed at our last set of results that progress in France had not been as rapid as we had anticipated or wished and as a result we were monitoring the business closely. Business performance has improved during the third quarter with balances increasing some 85% on the half-year position and 76% of balances are now revolving. Our new French management team has developed a strong, value-creating business plan based on both our experience since launch and further research with consumers. We therefore remain confident that there is an opportunity in France for a brand such as Egg to develop a valuable business and at the same time consistently provide French consumers with a better deal in banking than they have been used to.

“However having regard to our previously announced appetite for investment, execution of this revised plan will take longer and should be given a greater level of investment than Egg is prepared to undertake on a stand-alone basis. We believe it is in the best interests of Egg’s shareholders to form an alliance with a strategic partner and accordingly, we are in negotiations which may lead to a joint venture or other transaction. We anticipate that these negotiations will be concluded by the end of this year.”

To download the full results in PDF format click here.

For further information:

There will be a conference call for investors and analysts at 10.00 am today, Wednesday 22 October 2003.

The phone number is 020-89963920

The access code is C226405

For those who cannot attend the call at that time a replay will be available for up to one week afterwards by dialling 01296-618700 with pin number 762277

Notes to Editors:

1. Egg plc is the world’s largest online bank, providing financial services products through its Internet site and other distribution channels.
2. Egg plc floated on 12 June 2000 raising proceeds of approximately £150 million and is listed on the London Stock Exchange. Prudential plc continues to hold 79% of the share capital.