12 Dec 2002
Egg plc Pre Close Trading Statement
UK business on track to deliver further growth in quarterly profits
Egg France launches successfully
Egg plc ("Egg") will shortly commence briefings with analysts ahead of its close period for the year ending 31 December 2002.
The UK business continues to grow strongly and profitably. Customer acquisition is on plan in Q4 with Egg Card remaining the lead product. In addition, cross sales of loan products into the card customer base continues to build on the record performance seen in our third quarter results. The combination of new card acquisition and personal loan volume increases has resulted in strong growth in unsecured lending balances this quarter.
The core UK business is on track to deliver further growth in quarterly profits with increasing card margins and fee income from the loans business being the main contributors. The underlying credit quality of the unsecured lending book remains strong and independent benchmarking continues to show that the arrears levels on our card book are significantly lower than the industry average.
We are pleased with the launch of Egg in France. While it is still too soon to reach any firm conclusions, our advertising has had an immediate impact with Egg achieving 40% brand awareness in our target market by the end of November; we have had 28,000 card accepts in the first month and early indicators suggest that we are attracting a higher quality of applications than expected. The average salary of our card customers is €50,000, which is 30% higher than the French average and is indicative that our brand is appealing to a more upmarket base consistent with our experience in the UK.
At Group level, in addition to the results from the UK and France, Egg has made a one-off exceptional profit of approximately £3.4 million in Q4 from the sale of 15% of Funds Direct to Prudential plc, which was noted in our third quarter results announcement.
This has been another important year in the development of Egg. We have proven that the UK business is sustainably profitable and continued to grow the customer base strongly. We have also launched la Carte Egg in France, our first major product launch outside the UK. We are pleased to announce that Egg is now officially the largest pure online bank in the world with a 1.5m unique audience based on the October figures from Nielsen/Netratings. We remain well positioned to drive the business even further forward in 2003.
Egg's preliminary results for the year ending 31 December 2002 will be released to the London Stock Exchange on 24 February 2003.
For further information:
- Egg plc is Europe's leading e-commerce financial services company, providing banking, insurance, investments, mortgages and a shopping portal through its Internet site and other distribution channels.
- Egg.com is the World's largest pure online bank with a unique audience of 1,507,000 in October, according to the latest Nielsen/Netratings UK Audience measurement data.
- 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.