Contents
Homeserve plc
1 Highlights
2 Chairman’s Statement
6 Chief Executive’s Review
20 Financial Review
25 Corporate and Social Responsibility
30 Directors’ Biographical Details
34 Directors and Advisers
35 Directors’ Report
37 Corporate Governance
42 Remuneration Report
50 Statement of Directors’ Responsibilities
51 
52 Consolidated Proﬁ t and Loss Account
53 Consolidated Balance Sheet
54 Company Balance Sheet
55 Supplementary Statements
56 Consolidated Cash Flow Statement
57 Notes to the Cash Flow Statement
59 Notes to the Accounts
81  Five Y ear Summary
82 Shareholder Analysis
83 Shareholder Information
84 Homeserve at a Glance
Homeserve Contacts
Annual Report cover 2005 to print.indd   2 3/6/05   8:28:31 am
Independent Auditor Report s’
88  Homeserve plc 1
Continuing Operations 2005 2004 Increase  
Turnover
†
 £223.1m £169.2m 31.8%
Operating profit* £42.4m £32.4m 30.8% 
Profit before tax* £42.0m £32.5m 29.3% 
Earnings per share* 46.7p 36.0p
°
 29.7%  
Highlights of the Year
Total Group 2005 2004    
Turnover
†
 £283.3m £323.0m
Operating profit £31.0m £49.1m 
Basic (loss) / earnings per share (34.3p) 35.2p 
Earnings per share
*
 48.7p 51.0p  
•  Homeserve now focused on home emergency services following completion of 
disposal programme
•  29.3% increase in profit before tax
*
 from continuing operations to £42.0m
•  Underlying earnings per share
*
 increased by 29.7%
•  Record year for utility branded policy growth, up 32% to 3.88m
•  Further development of our repair network with the acquisition of Sergon and 
post year end acquisition of Chem-Dry
•  Strong profit performance from employed network
•  International progressing well with France in profit and policies of 0.3 million 
•  Acquisition of 41,000 United Water Leakguard policies in the USA
†
 including share of joint ventures (see note 2)
*
 excluding goodwill and exceptional costs (see profit & loss account and notes 2 and 10)
° adjusted to reflect the 4 for 5 share consolidation
HS Report_P ges 1-33.indd 1 1/6/05 4:46:10 pm Homeserve has made signiﬁ cant progress in 
its ﬁ rst 12 months following the demerger of 
its Water Supply operation. The core home 
emergency businesses have continued to deliver 
outstanding organic growth in both proﬁ tability 
and policy membership. T o support this, we have 
been investing in the depth of management we 
require to continue to deliver sustained growth 
both in the UK and overseas.
We have completed our programme of disposals 
relating to the Commercial Outsourcing 
businesses. These have been replaced in the year 
with investment in a number of complementary 
acquisitions, principally relating to our Emergency 
Repair businesses, broadening the range of 
skills that we offer to our Household Insurer 
customers. We have also recently rebranded our 
Emergency Repair businesses as Homeserve, to 
provide increased clarity of service delivery for 
our customers.
Results
Turnover from continuing operations, including 
share of joint ventures, increased by 31.8% 
to £223m (2004: £169m). Proﬁ t before tax
*
increased by 29.3% to £42.0m (2004: £32.5m) 
and earnings per share
*
 increased by 29.7% to 
46.7p (2004: 36.0p).
When the impact of the discontinued 
operations is included, turnover including 
share of joint ventures decreased by 12.3% to 
£283m (2004: £323m) and adjusted earnings 
per share
*
 decreased by 4.7% to 48.7p (2004: 
51.0p). Exceptional costs totaling £41.9m 
principally result from the execution of our 
strategic decision to dispose of our Commercial 
Outsourcing operations. These changes will 
enable us to focus on our Home Emergency 
businesses, where we see better opportunities 
for growth and higher operating margins. These 
exceptional costs combined with goodwill 
amortisation of £10.4m (2004: £7.2m) result in 
a statutory loss before tax for the year of £8.6m 
(2004: proﬁ t £37.8m).
The Board is proposing a ﬁ nal dividend of £6.8m 
(being 10.9p per share). This, combined with 
Homeserve’s interim dividend of £3.2m (being 
5.1p per share) brings the total for the year to 
£10.0m, representing a total dividend per share 
of 16.0p. In 2004, total dividends payable were 
£12.7m, of which the demerged Water Supply 
operation paid £5.9m. After taking into account 
the share consolidation on 6 April 2004 and the 
dividend paid by the Water Supply operation, 
the current year dividend per share of 16.0p 
represents a 19.4% increase compared to the 
prior year.
Chairman’s Statement
Brian Whitty, Executive Chairman
notes 2 and 10)
Report & Accounts 2005 2
Homeserve plc
HS Report_P ges 1-33.indd 2 1/6/05 4:46:11 pm
*  pre goodwill and exceptional items (see proﬁ t & loss account and  “The core home emergency businesses have 
continued to deliver outstanding organic growth 
in both proﬁ tability and policy membership.”
Net cash at 31 March 2005 amounted to 
£11.2m (2004: net debt of £93.5m, of which 
£94.1m related to the Water Supply operation).
In line with Homeserve’s current internal 
reporting structure, we have now analysed our 
core Home Emergency businesses between 
“Policy Membership” and “Emergency Repair”.
Policy Membership 
The Policy Membership business has increased 
turnover to £131m (2004: £100m), with 
operating proﬁ ts
*
 increasing by 26.3% to £37.5m 
(2004: £29.7m). This increase is principally the 
result of continued organic proﬁ t growth in the 
utility branded businesses.
International is progressing well, with France 
reporting a full year operating proﬁ t for the ﬁ rst 
time having achieved policy growth of 75% to 
0.28 million. In the US we have just signed our 
third partner, United Water, which included the 
acquisition of 41,000 existing service line policies.
As reported at the interim results, our furniture 
warranty business has been affected by the 
difﬁ cult trading conditions in that market. In 
particular, the appointment of an administrator 
to Courts Plc has resulted in an exceptional 
operating cost of £2.8m relating to provisions 
against amounts owing to Homeserve. We 
do however believe that there continue to be 
signiﬁ cant new business opportunities in both 
retail and manufacturer warranty schemes.
Emergency Repair 
The Emergency Repair business has increased 
turnover to £100m (2004: £73m), with 
operating proﬁ ts
*
 increasing by 80.7% to £4.8m 
(2004: £2.7m). This increase is principally due to 
the continuation of the improved performance 
in our directly employed network for glazing, 
locks, plumbing and drainage repairs, resulting 
in an operating proﬁ t
*
 in that business of £3.1m 
(2004: £0.3m). The improvement has been 
achieved by better branch management and 
engineer productivity, together with growth in 
the directly employed network of plumbing and 
drainage engineers working for our Household 
Insurer customers. 
We have made progress this year in extending 
our service offering to insurers through two 
key acquisitions. In December 2004 we invested 
£11.4m in the acquisition of Sergon BRM, one 
of the UK’s leading home insurance sub-contract 
repair networks for water, ﬁ re, storm and other 
accidental damage. 
Additionally, in April 2005, we acquired Chem-
Dry, one of the UK’s leading ﬁ re and ﬂ ood 
disaster restoration and carpet and upholstery 
franchise cleaning networks, for £18.9m. 
The integration of these trades into our overall 
service offering is progressing well.
Homeserve plc 3
HS Report_P ges 1-33.indd 3 1/6/05 4:46:12 pm Demerged and disposed businesses 
The Water Supply operation was demerged on 
6 April 2004, and in the period to demerger, 
contributed turnover of £1.0m (2004: £72m), 
and an operating proﬁ t
*
 of £0.2m (2004: 
£21.3m). The Commercial Outsourcing 
businesses contributed turnover of £59m (2004: 
£81m) and operating proﬁ t of £1.7m (2004: 
£5.0m). The sale proceeds from the disposal of 
the Commercial Outsourcing businesses amount 
to £22.4m.
Board Changes
On 30 November 2004 Ian Carlisle was 
appointed to the Board as an executive director, 
with responsibility for the Emergency Repair 
business. Ian joined Homeserve in 2003 as Chief 
Executive of the glazing and locks network 
and was previously the Managing Director of 
Autoglass Ltd.
Following the disposal of the Commercial 
Outsourcing businesses, Robert Harley stepped 
down as a director of Homeserve on 24 March 
2005. On behalf of the Board, I should like to 
thank Robert for his signiﬁ cant contribution to 
the business during his four years as a director.
Employees
The commitment of our employees has ensured 
that this has been a very successful year and I 
should like to thank them for their hard work 
and dedication.
Prospects
Homeserve is now focused on developing its 
Home Emergency businesses where we believe 
there are substantial opportunities for continued 
growth.
Our Policy Membership business is expected to 
continue to increase its market penetration in 
the UK and expand its international operations, 
particularly in the USA. This policy model 
continues to generate high levels of recurring 
revenue which provide good visibility of future 
proﬁ ts.
Our Emergency Repair business is continuing 
to generate improved margins. The broader 
range of services we now provide support both 
our Policy Membership operation and create 
a unique offering for our Household Insurer 
customers.
Over the coming year we will seek to 
complement our expected organic growth with 
strategic acquisitions both for Policy Membership 
and Emergency Repair operations. We will 
continue to invest in our International businesses 
and in strengthening our management teams to 
support sustained growth in the longer term.
Brian Whitty
Executive Chairman
23 May 2005
Chairman’s Statement
Report & Accounts 2005 4
Homeserve plc
HS Report_P ges 1-33.indd 4 1/6/05 4:46:13 pm Homeserve plc 5 Homeserve plc 5
HS Report_P ges 1-33.indd 5 1/6/05 4:46:14 pm Our vision is for Homeserve to be “Y our Home 
Emergency Service Worldwide”. This means 
selling policies to cover home emergencies and 
carrying out high quality repairs for a complete 
range of home emergencies. 
Having disposed of all of our Commercial 
Outsourcing operations in the year we are now 
focusing all of our resource on developing our 
core Home Emergency business. The acquisition 
of Sergon and, subsequent to the year end, 
of Chem-Dry, signiﬁ cantly enhance our repair 
service offering and place Homeserve in a 
unique position to provide a fully integrated 
service to our Household Insurance Business 
Partners.
Our Policy Membership business provides 
underwritten cover for a range of domestic 
emergencies including plumbing and drains, 
electrical wiring, gas, central heating, electrical 
and other appliances and furniture. We also 
reinsure half of the risks underwritten for water 
and utilities branded policies, through our 
offshore captive insurance company to share in 
the insurance proﬁ ts from these policies. Our 
own membership policies are afﬁ nity branded 
to our Business Partners in the utilities, appliance 
manufacturing and retail sectors. 
Our Emergency Repair business is now a clear 
market leader in carrying out a broad range of 
claims repairs on behalf of Household Insurers, 
from ﬁ re and ﬂ ood restoration, glazing, locks, 
window and door frames, drainage repairs and 
permanent building repairs (plastering, painting 
and decorating). These trades are delivered 
through a combination of employed, subcontract 
and franchised repairers. In April 2005, we 
rebranded our directly employed Emergency 
Repair operation as Homeserve in order to 
increase awareness of our name for home 
emergency repairs.
Homeserve now has over 3,300 employees, 
including over 700 directly employed engineers 
and operates a network of over 4,600 
subcontract and franchised engineers providing a 
comprehensive range of trades nationally.
Homeserve has again delivered strong operating 
proﬁ t
*
 performance and record levels of new 
customer and policy membership growth with 
continuing operations generating turnover 
including share of joint ventures of £223m and 
operating proﬁ ts
*
 of £42.4m.
Chief Executive’s Review
Richard Harpin, Chief Executive
notes 2 and 10)
Report & Accounts 2005 6
Overview
HS Report_P ges 1-33.indd 6 1/6/05 4:46:15 pm
*  pre goodwill and exceptional items (see proﬁ t & loss account and  Homeserve plc 7
“Our vision is for Homeserve to be “Your Home 
Emergency Service Worldwide” . This means selling 
policies to cover home emergencies and carrying 
out high quality repairs for a complete range of 
home emergencies.”
“Our vision is for Homeserve to be “Your Home 
Emergency Service Worldwide” . This means selling 
policies to cover home emergencies and carrying 
out high quality repairs for a complete range of 
home emergencies.”
HS Report_P ges 1-33.indd 7 1/6/05 4:46:17 pm Policy Membership
Turnover including share of joint ventures 
and operating proﬁ t
*
 from these businesses 
increased by 30.1% and 30.8% to £131m and 
£42.4m respectively.
Homeserve GB 
Our utilities branded policy business is the 
market leader in the provision of plumbing 
and drainage cover as well as a range of other 
emergency policies, to customers of water 
and energy companies. This business had an 
outstanding year for policy, customer and proﬁ t 
growth, achieving excellent response rates for 
both direct mail and telesales operations. T otal 
UK policies increased by 32% from 2.93m to 
3.88m;
• 2.76m in plumbing and drains (2004: 2.10m)
• 0.60m in electrical (2004: 0.57m) and 
• 0.52m in other including gas supply pipe and 
domestic heating policies (2004: 0.26m).
The record level for new policies sold of 1.36m 
(2004: 0.93m) reﬂ ects a healthy increase in the 
number of customers of 21% to 2.36m and 
an improved average number of policies per 
customer of 1.65 compared with 1.50 last year. 
Successful new creative styles for our direct 
mailings were introduced during the year. 
These were one page mailings, containing an 
application form without a leaﬂ et, which cost 
less to produce but resulted in increased take 
up. In addition, our water supply pipe mailings 
performed well, bringing in new customers as 
well as being cross sold to existing plumbing 
and drains members, with 0.5m new policies 
added during the year. The recently expanded 
gas supply pipe cover, sold through our Energy 
Partners and as a cross sell product to water 
company customers, has also started well with 
0.1m new policies sold in the year.
Average acquisition costs per policy were lower 
reﬂ ecting the improved performance of the 
new mailings, particularly water supply pipe, 
and reduced mail pack prices. This has been 
combined with the continued cost effective use 
of outbound telesales where the number of 
agents has increased to 220 from 200 last year, 
achieving over 0.4m sales.
We have maintained our high policy retention 
rate at 88%, reﬂ ecting our focus on increasing 
the proportion of customers using continuous 
payment methods such as direct debit and the 
excellent performance of our repair networks. 
We continually monitor our repair performance 
and customer satisfaction using 48 hour call 
backs and achieved 96% customer satisfaction 
levels on the core plumbing product. 
During the year we successfully renewed 14 of 
the 17 long term marketing agreements with our 
water company afﬁ nity partners. The renewed 
agreements represent 92% of our water 
company policy customer base. The exceptions 
were Wessex Water, Bristol Water and Welsh 
Water (representing 0.27m policies in total), 
where contracts expire in June 2005, July 2005 
and November 2005, and will not be renewed. 
We will retain ownership and revenue for all of 
the existing policies and shall continue to renew 
these policies without paying a commission to 
these water companies. 
Chief Executive’s Review
Report & Accounts 2005 8
Policy Membership
HS Report_P ges 1-33.indd 8 1/6/05 4:46:20 pm Homeserve plc 9 Homeserve plc 9
“Our utilities branded policy business is the market 
leader in the provision of plumbing and drainage 
cover as well as a range of other emergency policies.”
“Our utilities branded policy business is the market 
leader in the provision of plumbing and drainage 
cover as well as a range of other emergency policies.”
HS Report_P ges 1-33.indd 9 1/6/05 4:46:21 pm International 
The development of Homeserve International is 
progressing well. Our strategy is to replicate the 
proven UK model of water company branded 
plumbing and drainage and water supply pipe 
cover offered via direct marketing, with fully 
underwritten policies. Our organic growth will 
be supplemented by the acquisition of home 
assistance policies which can be integrated 
into our existing operations. Turnover from the 
international operations increased by 124% to 
£3m with total policies of 0.3m.
Doméo, the joint venture in France with Veolia 
Water, in which our share increased to 49% 
from 40% in November 2004, made its ﬁ rst full 
year operating proﬁ t and grew the number of 
policies by 75% to 0.28m (2004: 0.16m). Doméo 
now employs 49 staff, including 12 outbound 
telesales agents. There are approximately 12 
million owner occupied houses in France of 
which Veolia provides water to 4.5 million using 
the Generale Des Eaux brand. During the year 
we sent out 11 million door to door and solus 
mailings across the whole of France, marketing 
to 8.3 million households of which 40% were in 
areas where water is supplied by Generale des 
Eaux, achieving satisfactory take up rates in all 
areas.  We have successfully cross sold the full 
plumbing and drains policy to existing supply 
pipe members and introduced an emergency 
electrical policy. Retention rates and customer 
satisfaction both remained at high levels. 
The US business, which is based in Miami with 
18 employees, completed its ﬁ rst full year of 
trading with 33,000 (2004: 13,000) policies 
and in the second half signed its second 
business partner, Connecticut Water Services 
Inc. Connecticut Water is relatively small with 
less than 0.1m households, but is nevertheless 
important at this early stage of development.  
The water supply pipe product has been 
complemented by the successful launch of the 
full plumbing and drains product as a cross sell 
and is achieving satisfactory take up rates. Our 
48 hour call backs are reporting similar levels of 
customer satisfaction to those achieved in the 
UK. 
In May 2005 we acquired United Water’s 
Leakguard business in New Jersey and Idaho, 
including 41,000 existing policies, similar to the 
water supply pipe product marketed in the UK. 
This acquisition includes a 10 year marketing 
agreement to use the United Water brand 
providing access to over 0.5 million households 
in eight States with the potential to extend the 
offer out of area and upsell plumbing and drains 
cover.
The US market offers enormous potential for 
Homeserve, with 57 million owner occupied 
houses and a general propensity to purchase 
insurance products. However, progress in 
signing up new water company partners has 
been slower than expected, although we are in 
discussions with a number of the larger water 
companies and interest from potential partners 
is high. The market is fragmented and our ability 
to sign up new water company partners will 
determine the speed of our success. We plan 
to signiﬁ cantly strengthen our management and 
resources in this business during the coming year. 
During the year we commenced test marketing 
in Australia with our ﬁ rst partner, South 
Australian Water, which provides access to 
almost 0.5 million households. This operation 
is still at an early stage and is dependent on 
reaching agreement with other Australian water 
companies.
Our ongoing objective is to test in one new 
country each year.
Chief Executive’s Review
Report & Accounts 2005 10
Policy Membership
HS Report_P ges 1-33.indd 10 1/6/05 4:46:24 pm Homeserve plc 11
“The development of Homeserve International is 
progressing well. Our ongoing objective is to test 
in one new country each year.”
“The development of Homeserve International is 
progressing well. Our ongoing objective is to test 
in one new country each year.”
HS Report_P ges 1-33.indd 11 1/6/05 4:46:26 pm Retail and Manufacturer Warranties
During the year we signiﬁ cantly strengthened 
our resource in this business, combining our 
small but developing appliance manufacturer 
warranty operation and the existing furniture 
warranty business, under a newly recruited and 
highly experienced CEO. These businesses share 
the same characteristics of longer-term policies 
(three to ﬁ ve years compared to annual) and 
signiﬁ cant potential for direct marketing to ‘in 
box’ registrations for manufacturer warranty and 
to customers who chose not to purchase retail 
furniture warranties at the point of sale. 
We have signiﬁ cantly strengthened our 
manufacturer appliance warranty operation, 
which operates out of our new London ofﬁ ce. 
Additional senior management has been 
appointed with speciﬁ c manufacturer warranty 
sales and marketing experience. In September, 
we won the business of The Vaillant Group, 
now the largest boiler manufacturer in the UK, 
and are due to begin marketing policies for 
Rangemaster, part of Aga Foodservice Group in 
June 2005. The services we provide include the 
marketing and administration of their ‘in box’ ﬁ rst 
year warranty scheme, direct mail campaigns 
and outbound telesales together with initial 
claim veriﬁ cation and out of hours call handling. 
Our existing clients include Ideal Boilers, Mira 
Showers, Creda Heating, Sime Boilers, Redring 
and Xpelair. We have now signed up 359,000 
(2004: 138,000) customers on our warranty 
programmes and now have 90,000 (2004: nil) 
extended warranty policies.
Our furniture warranty business provides fully 
underwritten furniture cover, supported by 
an employed network of 110 upholsterers 
and cleaners providing a service for furniture 
retailers and manufacturers. This business 
suffered a set back following the appointment 
of administrators to Courts, its largest customer, 
combined with the difﬁ cult furniture retail 
market. Our priority is to develop existing 
sales opportunities with our existing Retailer 
Business Partners and to secure new national 
and regional retailers to replace the lost business. 
We have appointed a new Sales Director with 
signiﬁ cant experience in selling to national 
retailers and are progressing discussions with a 
number of leading national retailers and larger 
independents for furniture warranty. In addition 
we are developing our range of warranty 
products to include cover for ﬁ tted kitchen 
cabinets and appliances.  The manufacturer 
and retail warranty markets are an important 
element of our overall warranty strategy, where 
we believe there are signiﬁ cant opportunities for 
growth.
Chief Executive’s Review
Report & Accounts 2005 12
Policy Membership
HS Report_P ges 1-33.indd 12 1/6/05 4:46:28 pm Homeserve plc 13
“The manufacturer and retail warranty markets 
are an important element of our overall warranty 
strategy, where we believe there are signiﬁ cant 
opportunities for growth.”
“The manufacturer and retail warranty markets 
are an important element of our overall warranty 
strategy, where we believe there are signiﬁ cant 
opportunities for growth.”
HS Report_P ges 1-33.indd 13 1/6/05 4:46:30 pm Emergency Repair
Turnover and operating proﬁ t
*
 from these 
businesses increased by 37.2% and 80.7% to 
£100m and £4.8m respectively, including £12.9m 
of turnover from Sergon, acquired in December 
2004.
Homeserve Emergency Services is now 
a market leader in providing repairs to 
homeowners relating to insurance claims paid 
for by Household Insurers. The Household 
Insurance repairs market is worth an estimated 
£2bn and is highly fragmented with most 
claims still being carried out by local jobbing 
builders with a long cycle time from start to 
ﬁ nish. Homeserve’s ability to offer ﬁ re and 
ﬂ ood restoration followed by permanent 
repair puts us in a unique position to provide a 
complete repair service to Household Insurers. 
We operate a combination of employed, sub 
contract and franchised networks which enables 
us to achieve optimum efﬁ ciency and provide 
capacity for exceptional peaks in insurance 
claims.
Glazing, Locks, Plumbing and Drains
Homeserve’s glazing and locks network is the 
UK’s largest national directly employed repair 
network working for Household Insurers, 
providing a range of services including the 
repair and replacement of glass, frames, locks, 
garage doors, greenhouses and conservatories. 
This business has over 500 directly employed 
engineers operating from 37 branches 
nationally and has continued to achieve a strong 
turnaround in operating and proﬁ t performance 
despite the continued industry wide reduction in 
claims, particularly for crime and weather related 
damage. The conversion of insurance leads to 
invoiced sales has increased from 80% to 85% 
reﬂ ecting improved workﬂ ow management 
systems following the successful implementation 
of major IT system changes. This has resulted in 
better job tracking, taking over one million pieces 
of paper out of the business together with 
more efﬁ cient branch management and reduced 
administration. Eleven of the branches now have 
new branch managers and this is reﬂ ected in 
the improvement in all aspects of branch and 
engineer performance. 
Our business model is local branches with 
managers controlling an average of 12 engineers 
and three deployment staff for a single trade 
with national coverage and consistency of quality 
and pricing for insurers. 
Chief Executive’s Review
Report & Accounts 2005 14
Emergency Repair
HS Report_P ges 1-33.indd 14 1/6/05 4:46:34 pm “Homeserve Emergency Services is now a market 
leader in providing repairs to homeowners following 
insurance claims paid for by Household Insurers.”
Homeserve plc 15
“Homeserve Emergency Services is now a market 
leader in providing repairs to homeowners following 
insurance claims paid for by Household Insurers.”
HS Report_P ges 1-33.indd 15 1/6/05 4:46:36 pm The glazing and locks operation has won a 
number of important new accounts during 
the year with potential turnover of up to £9m 
once the accounts reach their full run-rate. We 
were recently awarded 75% of the Royal Bank 
of Scotland Insurance glazing volumes, having 
previously serviced one third; this additional 
work will commence in June 2005. In addition, 
we secured further volumes from Royal and 
Sun Alliance for small scale commercial glazing 
repairs, where we already provide services for 
domestic emergencies.
The directly employed plumbing and drainage 
network working for Household Insurers, 
established two years ago, is now one of the 
market leaders, performing work last year for 
Norwich Union, Royal and Sun Alliance and 
Royal Bank of Scotland Insurance as well as 
our own plumbing and drainage policy base. 
In February 2005 we were awarded one third 
of the volume for Royal Bank of Scotland 
Insurance Group’s account, including Direct Line, 
Nationwide and Churchill, as well as securing 
half of Zurich Insurance’s volumes in this market, 
which began in March 2005. 
We plan to increase the productivity and 
quality of our employed network through the 
introduction of ‘Fitter Package’, our engineer 
incentive scheme, which is currently being 
trialled in a number of glazing and locks 
branches. The scheme continues to pay a 
basic salary but with signiﬁ cant additional 
payments, calculated on a fortnightly basis, for 
improved productivity and provides excellent 
remuneration packages for higher ﬁ rst time ﬁ x 
rates and reduced reattends. The trial results are 
encouraging and demonstrate that signiﬁ cant 
increases in productivity combined with higher 
customer satisfaction are achievable. Our 
intention is to roll this scheme out to all glazing 
and locks branches during the coming year, 
and for plumbing and drains, ﬁ re and ﬂ ood and 
permanent repair over the next 18 months. In 
December 2004 we opened our new engineer 
training and assessment centre in Birmingham 
for glazing and associated skills and this is already 
having a signiﬁ cant impact on improving the 
quality of the work that we perform. Customer 
satisfaction has also reached record levels, 
improving signiﬁ cantly during the year, from 94% 
to 96%.
Chief Executive’s Review
Report & Accounts 2005 16
Emergency Repair
HS Report_P ges 1-33.indd 16 1/6/05 4:46:39 pm Homeserve plc 17
“Homeserve’s glazing and locks network is the UK’s 
largest national directly employed repair network 
working for Household Insurers.”
“Homeserve’s glazing and locks network is the UK’s 
largest national directly employed repair network 
working for Household Insurers.”
HS Report_P ges 1-33.indd 17 1/6/05 4:46:40 pm Claims Management
Homeserve Claims Management provides 
claims handling for our own policyholders 
and a home assistance helpline for emergency 
repairs for Household Insurers and other 
ﬁ nancial sector customers. Homeserve Claims 
Management operates a high quality national 
subcontract network across a broad range of 
trades. Last year we received over two million 
inbound emergency calls, an increase of 20% 
and managed over 520,000 claims. In order 
to manage the increase in activity, the planned 
move to a purpose built call centre close to the 
original operation in Preston, was completed in 
July 2004, more than doubling our operational 
capacity. During the year, we introduced a 
number of new initiatives to improve further the 
already high levels of customer service, including 
performance league tables for individual 
engineers together with a trial of electronic job 
tracking to enable better engineer management 
and customer communication. 
Permanent Repair
In December 2004 we acquired Sergon, one 
of the UK’s leading permanent repair networks 
working for Household Insurers, with over 280 
independent contractors completing 5,000 
repairs per month. Sergon provides emergency 
and permanent repairs, such as plastering and 
decorating, arising from the escape of water, 
storm, ﬁ re and accidental damage. Sergon has 
established relationships with seven Household 
Insurers and as part of Homeserve now has 
access to customer relationships with the 
majority of Household Insurers. 
Sergon currently has 90 employees working 
from its national control centre near 
Nottingham. Since its acquisition, we have 
appointed a new Managing Director and an 
Operations Director with experience of running 
a national building trades business. As a result, 
the number of completed claims by the network 
have increased signiﬁ cantly, customer service has 
improved and the average claims cycle time has 
reduced from 78 to 61 days.  
Fire and Flood Restoration
Our range of disaster restoration trades was 
further complemented by the acquisition of 
Chem-Dry in April 2005. Chem-Dry is a market 
leader in the ﬁ re and ﬂ ood restoration market 
with an estimated 30% share of a market worth 
£100m. Chem-Dry has 230 franchisees providing 
national coverage for eight leading Household 
Insurers for ﬁ re and ﬂ ood restoration and carpet 
and upholstery cleaning, with the potential to 
expand the number of insurers Chem-Dry is 
working with. The ability to deal with ﬁ re and 
ﬂ ood emergencies enables Homeserve to be 
one of the ﬁ rst businesses into a customer’s 
home following an emergency. This places us 
in a unique position to offer a fully integrated 
service to insurers, from the answering of the 
initial claim right through to completion of the 
permanent repair.
Richard Harpin
Chief Executive 
23 May 2005
Chief Executive’s Review
Report & Accounts 2005 18
Emergency Repair
HS Report_P ges 1-33.indd 18 1/6/05 4:46:42 pm Homeserve plc 19 Homeserve plc 19
“Homeserve is in the unique position of offering 
a fully integrated service to insurers, from the 
answering of the initial claim right through to 
completion of the permanent repair.”
“Homeserve is in the unique position of offering 
a fully integrated service to insurers, from the 
answering of the initial claim right through to 
completion of the permanent repair.”
HS Report_P ges 1-33.indd 19 1/6/05 4:46:44 pm notes 2 and 10)
On 6 April 2004, Homeserve completed the 
demerger of its Water Supply operation. In 
addition, during the year we have completed 
the programme of disposals in respect of 
our Commercial Outsourcing businesses. 
Consequently, the results for the current year 
are analysed between “continuing” operations, 
representing those operations still held at 31 
March 2005, and “discontinued” operations, 
being those demerged and disposed of during 
the year.
As the demerger and the acquisition of the 
minority interest were completed during the 
current ﬁ nancial year, the assets and liabilities of 
the demerged Water Supply operation and the 
amount attributable to the minority interests are 
included in the balance sheet of Homeserve at 
31 March 2004.
Group Results
Turnover from continuing operations including 
share of joint ventures was £223m (2004: 
£169m), an increase of 31.8%. This principally 
reﬂ ects strong growth in the number of policies 
sold and high retention rates which generate 
signiﬁ cant renewals income within our utility 
branded policy membership business. Turnover 
for the year, including share of joint ventures and 
discontinued operations, decreased by 12.3% to 
£283m (2004: £323m) reﬂ ecting the fact that 
the prior year results include the discontinued 
operations for a full year.
T otal operating proﬁ t
*
 for the continuing 
operations increased by 30.8% to £42.4m 
(2004: £32.4m), which substantially resulted 
from organic growth in the policy membership 
businesses and improved performance in the 
glazing and locks operation. 
As a result of the demerger and disposals, 
total operating proﬁ t
*
, which includes these 
discontinued operations, decreased by 
24.7% to £44.2m (2004: £58.7m). In line 
with Homeserve’s current internal reporting 
structure, we have now analysed our core 
Home Emergency business between “Policy 
Membership” and “Emergency Repair”.
The Policy Membership business achieved 
operating proﬁ t
*
 growth of 26.3% to £37.5m 
(2004: £29.7m), principally as a result of 
continued growth of our utility branded policy 
sales. 
The expansion of our afﬁ nity branded business 
model overseas is progressing well, with our ﬁ rst 
venture in France reporting a full year operating 
proﬁ t
*
 only three years after its commencement. 
Financial Review
Andrew Belk, Group Finance Director
Report & Accounts 2005 20
Homeserve plc
HS Report_P ges 1-33.indd 20 1/6/05 4:46:47 pm
*  pre goodwill and exceptional items (see proﬁ t & loss account and  The Emergency Repair business achieved 
operating proﬁ t
*
 growth of 80.7% to £4.8m 
(2004: £2.7m). This follows the successful 
turnaround of the glazing, locks, plumbing 
and drains directly employed business, which 
contributed an operating proﬁ t
*
 of £3.1m (2004: 
£0.3m), and the continued growth in proﬁ ts at 
our claims management business. 
The disposed businesses, including the demerged 
Water Supply and Commercial Outsourcing 
operation, contributed turnover, excluding inter-
divisional turnover, of £60.2m (2004: £153.7m) 
and operating proﬁ t
*
 of £1.8m (2004: £26.3m) 
prior to their disposal.
Adjusted proﬁ t before tax
*
, including 
discontinued operations, was £43.7m (2004: 
£51.7m), a decrease of 15.4% reﬂ ecting the 
demerger and disposals. The net interest charge 
decreased to £0.5m (2004: £7.0m), reﬂ ecting 
the demerger of the Water Supply operation 
that included an index linked bond amounting to 
£87.9m at 31 March 2004.
The goodwill charge increased to £10.4m (2004: 
£7.2m) principally due to the amortisation 
of goodwill arising on the acquisition of the 
minority interests on 6 April 2004.
During the year, exceptional operating costs of 
£2.8m were incurred relating to the provision 
of amounts due from Courts Plc following the 
appointment of an administrator in November 
2004. In addition, exceptional costs of £39.1m 
relating to the disposal of the Commercial 
Outsourcing businesses have been incurred. 
The total proceeds received in respect of the 
disposals amounted to £22.4m. The net book 
value of assets, excluding goodwill, was £19.7m. 
In addition, goodwill amounting to £37.9m was 
attributable to the businesses disposed of during 
the year.
The carrying value of the goodwill related to the 
continuing operations has been reviewed based 
on the current budgets and business plans. No 
impairment is considered necessary.
After taking account of goodwill amortisation 
and these exceptional costs, the statutory loss 
before taxation for the year was £8.6m (2004: 
proﬁ t £37.8m).
Taxation
The effective rate of tax for the year, based on 
proﬁ ts excluding goodwill and exceptional costs, 
was 30.9%. In the prior year, the effective tax 
rate for the Group, excluding the demerged 
Water Supply operations, was 30.6%. The 
increase in the current year reﬂ ects the losses 
experienced in our overseas businesses, which 
can only be utilised against future proﬁ ts in those 
businesses.
Earnings per Share
Earnings per share
*
 after adjusting for the four 
for ﬁ ve share consolidation, for the continuing 
operations increased by 29.7%, from 36.0p to 
46.7p. Basic earnings per share, which includes 
the discontinued operations and exceptional 
costs, was a loss of 34.3p (2004: earnings of 
35.2p).
Homeserve plc 21
HS Report_P ges 1-33.indd 21 1/6/05 4:46:48 pm Dividends
The Board is proposing a ﬁ nal dividend of 
£6.8m being 10.9p per share. This, combined 
with the Group’s interim dividend of £3.2m 
(being 5.1p per share) brings the total for the 
year to £10.0m, giving a total dividend per share 
of 16.0p. After adjusting for the four for ﬁ ve 
share consolidation and minority dividend, this 
represents an increase in dividend per share 
of 19.4% in the year. In 2004, total dividends 
payable were £12.7m, of which the demerged 
Water Supply operation paid £5.9m. 
Acquisitions
The Group has completed a number of 
incremental acquisitions during the year, investing 
£14.1m, net of cash acquired of £1.0m, together 
with estimated deferred consideration of £0.2m.
As reported in the prior year, on 6 April 2004, 
we acquired the minority interests in the 
original Homeserve business through a share 
for share exchange. We issued 11.6m shares to 
the minority interest shareholders in return for 
their 24.98% shareholdings in those businesses. 
Goodwill amounting to £66.9m arose as a result 
of this acquisition.
Principal Choice was acquired on 28 May 2004 
for cash consideration of £1.3m, net of cash 
acquired of £0.1m, plus estimated deferred 
consideration of £0.2m. Goodwill amounting to 
£1.5m arose as a result of this acquisition.
Disaster Restoration Limited was acquired on 
29 July 2004 for cash consideration of £0.8m 
including expenses. Goodwill amounting to 
£0.3m arose as a result of this acquisition, which 
has been fully provided in the current year due 
to its proposed integration with Chem-Dry.
On 29 November 2004, we acquired a further 
9% of the issued share capital of Doméo SA, 
from our Joint Venture partner in France, for 
cash consideration of £0.9m. This increases our 
shareholding to 49%. Goodwill amounting to 
£1.0m arose as a result of this acquisition.
Sergon BRM Limited was acquired on 21 
December 2004 for cash consideration of 
£10.5m, net of cash acquired of £0.9m. Goodwill 
amounting to £11.7m arose as a result of this 
acquisition.
Goodwill in respect of these acquisitions is 
currently being amortised over its estimated 
useful economic life, of up to 20 years. As noted 
below, under International Financial Reporting 
Standards, goodwill will no longer be amortised, 
but rather will be tested for impairment every 
year.
After the year-end, on 14 April 2005, Chem 
-Dry UK Limited and its related businesses 
were acquired for cash consideration of £18.9m. 
Goodwill amounting to an estimated £14.1m 
arose as a result of this acquisition.
Disposals
On 6 April 2004, the Water Supply operation 
and closely related businesses were disposed 
of to the Group’s existing shareholders. 
This transaction resulted in a distribution to 
shareholders and has been treated as a dividend 
in specie amounting to £28.5m.
The remaining Commercial Outsourcing 
businesses were disposed of during the year 
for cash consideration of £22.4m, less net cash 
balances of £4.2m, resulting in a total loss on 
disposal of £37.0m.
Financial Review
Report & Accounts 2005 22
Homeserve plc
HS Report_P ges 1-33.indd 22 1/6/05 4:46:49 pm Capital Expenditure
Capital expenditure in the year totalled £9.8m 
(2004: £34.4m). The signiﬁ cant reduction 
compared to the prior year follows the 
demerger of the Water Supply operation, which 
required signiﬁ cant investment in ﬁ xed assets. 
Cash Flow and Borrowings
Homeserve generated cash of £43.4m in the 
year from operating activities, £42.9m of which 
was generated by the continuing operations. 
The Group achieved a net cash inﬂ ow of 
£9.3m, compared to a cash inﬂ ow of £10.3m 
in the previous year. This was after net capital 
expenditure of £8.9m, interest, tax and dividends 
totaling £20.8m, investment in subsidiaries and 
joint ventures of £20.3m, disposal of subsidiaries 
of £19.0m, purchase of own shares of £8.4m 
and ﬁ nancing inﬂ ows of £5.3m. Net debt 
decreased signiﬁ cantly following the demerger of 
the Water Supply operations, which included the 
index-linked bond amounting to £87.9m. At 31 
March 2005, the Group had net cash of £11.2m. 
Share capital
As part of the demerger of the Water 
Supply operation on 6 April 2004, the Group 
undertook a share consolidation of four shares 
for every ﬁ ve held, in order to maintain the 
existing share price to enable the comparability 
of historic and future per share data and to 
preserve the value of employee share options. 
As noted above the Group also acquired the 
minority shareholding in the original Homeserve 
business, in a share for share exchange involving 
the issue of 11.6m shares by the Group, 
equivalent to approximately 18.6% of the 
enlarged share capital of Homeserve plc.
Homeserve plc 23
Pensions
Pension costs relating to the Group’s deﬁ ned 
beneﬁ t pension scheme continue to be 
accounted for in accordance with SSAP 24. 
The actuarial valuation of the scheme at 1 April 
2002 showed a surplus of £4.9m. Following 
the demerger of the Water Supply operation, 
a separate sub fund was established for 
Homeserve, replicating the rules and the beneﬁ t 
basis for employees. Active members employed 
by Homeserve together with the relevant 
deferred members have been transferred into 
the new sub fund.
The additional disclosures presented under the 
transitional arrangements for FRS 17, Retirement 
Beneﬁ ts, show a pension deﬁ cit net of deferred 
tax, of £1.8m (2004: £1.6m) in respect of the 
Homeserve sub fund.
 Financial Reporting
We have assessed the impact of International 
Financial Reporting Standards (“IFRS”) on the 
Group. There are four main impacts:
•  Share Based Payments will result in a charge 
to the proﬁ t and loss account over the 
vesting period, based on the fair value of the 
awards at grant date;
•  The expense of the Group’s deﬁ ned beneﬁ t 
pension scheme on Homeserve’s proﬁ t and 
loss account will be similar to that using 
current accounting standards. However, any 
pension surplus or deﬁ cit will be shown on 
the balance sheet, with actuarial gains and 
losses being recognised immediately through 
reserves;
HS Report_P ges 1-33.indd 23 1/6/05 4:46:49 pm •  The routine amortisation of goodwill arising 
from acquisitions will cease, but will be held 
on the balance sheet subject to an annual 
impairment test; and
•  Proﬁ ts arising from Doméo will only be 
recognised once that business achieves a 
positive net asset position. 
We have completed the restatement of our 
opening reserves at 1 April 2004. These will form 
the comparative results that we will disclose in 
our interim announcement in respect of the 
six months ending 30 September 2005 and the 
annual report in respect of the year ending 31 
March 2006. For internal reporting purposes, we 
have been reporting under IFRS since 1 April 
2005.
In respect of current UK GAAP , there have been 
no new accounting standards that have had 
an impact on the Group’s ﬁ nancial statements 
for the year, except for the adoption of UITF 
38. The impact of UITF 38 on Homeserve is 
the requirement to reclassify the investment in 
own shares from ﬁ xed assets, to a reduction in 
shareholders’ funds.
Andrew Belk
Group Finance Director
23 May 2005
Financial Review
Report & Accounts 2005 24
Homeserve plc
Turnover - Continuing Operations
Operating Profit* - Continuing Operations
0
50
100
150
200
250
01 02 03 04 05
0
10
20
30
40
50
01 02 03 04 05
Y ear
Y ear
£m £m
HS Report_P ges 1-33.indd 24 1/6/05 4:46:49 pm Homeserve plc 25
Corporate and Social Responsibility
It is recognised that part of Homeserve’s future 
success will depend on taking into account 
the interests of all of the stakeholders in our 
business including employees, customers, 
shareholders and the wider community. 
Homeserve is committed to improving its 
corporate responsibility activities and will 
continue to report on them. 
Employees
Our employees are key to our success. 
Homeserve has a policy of equal opportunities 
and non-discrimination. Every reasonable effort 
is made to provide disabled people with equal 
opportunities for employment, training and 
promotion, taking into account their particular 
aptitudes and abilities. 
Communication is extremely important, 
particularly as Homeserve grows. Team 
brieﬁ ngs are held monthly in the majority of 
Homeserve’s businesses to keep employees 
informed about new developments. Newsletters 
and special publications are also used to 
communicate within the businesses and across 
Homeserve, these were particularly important in 
communicating the important messages arising 
from the demerger and the rebranding of the 
businesses under the Homeserve brand.
A Savings Related Share Option Scheme is 
operated across Homeserve and is highly 
successful in involving employees in the Group’s 
performance. As a further means of involving 
employees in share ownership, a Share Incentive 
Plan was launched in the year under which 
employees had the opportunity to apply for 
£250 worth of free shares.  
All employees are offered membership of a 
pension scheme with staff presentations being 
used where operationally possible to encourage 
full discussion of this important issue. Access is 
also provided to independent ﬁ nancial advice 
where required.
The majority of employees have regular 
performance and development reviews. 
Training continues to be of great importance 
to ensure that all employees have the right 
skills to perform to their maximum ability. We 
aim to attract, develop, retain and motivate the 
best people to ensure we meet our business 
objectives.
Homeserve GB featured for the fourth year in 
a row in the Sunday Times 100 Best Companies 
to work for. They ranked 57th this year which 
is an excellent result in a business where a 
high proportion of staff work in a call-centre 
environment which traditionally has a poor 
reputation for employee satisfaction. 70% of 
the marks awarded came from anonymous 
staff responses to a survey and the feedback 
collected is used to improve the working 
experience in the business.
HS Report_P ges 1-33.indd 25 1/6/05 4:46:49 pm Health & Safety
Homeserve remains committed to high 
standards of health and safety across all its 
business activities. A good safety record is 
achieved through strong leadership at board 
level, robust health and safety management 
systems, the active involvement of employees, 
and the routine monitoring and audit of safety 
performance. The positive beneﬁ ts to the 
business from reduced risks and liabilities and 
fewer lost time injuries are self-evident.
Corporate objectives and standards
Homeserve’s full time Health and Safety 
Adviser provides support in setting corporate 
objectives and formulating Group policy 
and minimum standards, assisting directors 
and senior managers with the development 
and implementation of health and safety 
management systems to protect the health and 
safety of employees and ensure consistency with 
statutory requirements. 
Homeserve’s subsidiaries operate autonomously 
with their own local health and safety policies 
and procedures. Each business has appointed 
a board member to act as champion for 
health and safety at board level, overseeing 
arrangements for the effective co-ordination 
and implementation of consistent practices 
which meet or exceed minimum statutory 
requirements. Andrew Belk is the nominated 
Main Board director for reporting on health 
and safety. Compliance throughout the whole 
Group is monitored against minimum corporate 
standards through routine internal health and 
safety audits, which assess business performance 
in 15 key areas:
• Health and safety management
• Risk assessment and control
• Plant and equipment
• Employee information and consultation
• Use of hazardous substances
• Personal protective equipment
• Fire and security
• Incidents and injuries
• Monitoring and reporting
• Welfare and the working environment
• Training and competence
• Safety of the public and special risks
• Occupational health
• Working time
• Control of contractors
This ongoing programme of comprehensive 
health and safety audits at Group level helps 
ensure minimum standards of compliance are 
met, and identiﬁ es areas where improvement is 
desirable. Agreed priority action programmes 
are developed for each business, against which 
progress is monitored and reported to individual 
boards for implementation. 
Good health and safety performance requires 
both the commitment and competence of 
managers and the responsible engagement of 
employees. There has continued to be good 
progress in training operational managers in 
health and safety management systems and 
techniques, with the programme set to continue 
for the coming year. The establishment of 
local health and safety committees to prompt 
employee involvement and ‘buy-in’ has helped 
raise the proﬁ le and commitment to health and 
safety throughout Homeserve.
Corporate and Social Responsibility
Report & Accounts 2005 26
Homeserve plc
HS Report_P ges 1-33.indd 26 1/6/05 4:46:50 pm Homeserve plc 27
Performance
Homeserve has continued to maintain a good 
health and safety record. During the year, there 
were 159 recorded incidents requiring ﬁ rst aid, 
hospital treatment or time lost from work, most 
involving cuts, bruises or muscular strains. Of this 
total, 51 were formally reported to HSE under 
the statutory RIDDOR requirements, with none 
resulting in life-threatening or disabling injuries. 
No formal health and safety enforcement action 
was taken, and no statutory notices were served 
against any of Homeserve’s businesses during 
the year. 
In total, 656 working days were lost through 
absence, slightly up on the previous year but 
down as a rate per employee at 0.07% of 
working days available. Homeserve’s overall 
Reportable Incident Rate compares favourably 
with an aggregated statistical average from the 
relevant industry sectors (see chart).
The disposal of Homeserve’s remaining 
Commercial Outsourcing businesses at the end 
of the year has reduced its exposure to their 
inherently higher risk activities but the increasing 
use of sub-contractors and franchisees will 
continue to be a risk. The reﬁ nement of existing 
management systems and the development of 
local health and safety expertise within each 
business remain priorities, to ensure that the 
current high standards are maintained.
Health and safety is fundamental to the 
continued success of Homeserve. The 
development and promotion of good working 
practices consistent with cost-effective 
measures to ensure compliance with statutory 
requirements remains a key focus for future 
activity. 
Notes to chart:
Aggregated Industry Sector Average based on statistical data from the service, utility and construction sectors aggregated in 
proportions similar to those represented across the range of Homeserve business activities.
Homeserve statistics for the years prior to the demerger in April 2004 include Commercial Outsourcing which remained part of 
Homeserve until March 2005.
0
5
10
15
20
95 96 97 98 99 00 01 02 03 04
Reportable Incidents per 1,000 employees over the past 10 years
HS Report_P ges 1-33.indd 27 1/6/05 4:46:50 pm Customers
Excellent customer service is key to 
Homeserve’s success. We aim to ensure that 
all customers enjoy a high quality service. 
Homeserve GB, for example, attempts to call 
all customers within 48 hours of the use of 
the service to ensure they were fully satisﬁ ed. 
Satisfaction rates consistently run at above 90% 
and any dissatisfaction expressed on these calls 
is followed up with both the customer and the 
engineer where appropriate. A noteworthy 
measure of satisfaction is that customer 
retention, already high, is higher amongst those 
customers who have recently made a claim 
than those who have not. We recognise that 
our customers have diverse needs and are 
committed to developing procedures to meet 
them. One initiative is the development of 
documentation in alternative formats, such as 
braille and large print. We are committed to 
maintaining and improving customer service 
levels across Homeserve and procedures are 
constantly reviewed and reﬁ ned.
We use a variety of channels to sell our 
products and services and seek to apply the 
same high standard of care to all of them. 
Particular care is taken in outbound sales to 
ensure that customers gain a full understanding 
of the service being provided and all outbound 
calls are recorded and the recordings retained. 
Environment
Homeserve and its businesses are committed 
to environmental sustainability. The demerger 
of the water supply operation and the sale 
of the commercial businesses means that 
the environmental impact of Homeserve has 
changed signiﬁ cantly over the year.
The continuing businesses within Homeserve 
are largely service based and therefore 
their exposure to environmental risk is low. 
However, we recognise that Homeserve has a 
responsibility to act in a way that respects the 
environment and as such, all our businesses 
are encouraged to incorporate an awareness 
of environmental issues into decision-making 
processes.
Recycling of ofﬁ ce materials is encouraged in 
Homeserve’s businesses and local initiatives are 
devised to help staff take a more responsible 
view of resources such as the recycling of toner 
cartridges. Where the business is not exclusively 
ofﬁ ce based for example at Homeserve 
Emergency Services, efforts are undertaken to 
manage and recycle waste such as PVC and 
glass.
Corporate and Social Responsibility
Report & Accounts 2005 28
Homeserve plc
HS Report_P ges 1-33.indd 28 1/6/05 4:46:50 pm Homeserve plc 29
Community & Charitable Giving
Homeserve is committed to assisting charities 
that have a direct impact on the communities in 
which its businesses operate. 
We encourage employees to support charities 
of their choice and they can contribute to those 
charities in a tax efﬁ cient manner through the 
Give As Y ou Earn Scheme. 
Employee support for high proﬁ le charity 
campaigns is also encouraged and in late 2004 
the children’s charity Childline declared Weston 
Super Mare based Homeserve Retail Warranties 
as its Best Supporting Company for the Bristol 
and North Somerset region. 
It is also important for staff that they have 
the opportunity to support national or 
international disasters such as the Boxing Day 
Tsunami.  In addition to fundraising, including 
a sponsored dress-down week during January 
2005, Homeserve sponsored a member of 
staff in assisting the emergency efforts and paid 
expenses for the ﬂ ight to South East Asia. 
As a large employer, Homeserve’s businesses 
can offer a great contribution to the efforts of 
the Blood Donor campaigns and this is regularly 
promoted to staff. 
Being a responsible corporate citizen within 
our communities is valued by our staff and by 
potential recruits to the company. Homeserve 
and its businesses operate a generous local 
sponsorship programme offering ﬁ nancial 
support to school, sports or charity projects 
that beneﬁ t the community in areas of either 
education, health or issues of well being. In 
addition, funds were made available to a number 
of community sports teams nominated by 
employees of Homeserve.
HS Report_P ges 1-33.indd 29 1/6/05 4:46:50 pm Directors’ Biographical Details
Brian Whitty (51), FCA •
Executive Chairman since April 2004 following 
six years as chief executive and three years as 
ﬁ nance director. Previously ﬁ nance director of 
ACT Group plc.
Richard Harpin (40), BA (Hons) CdipAF
Chief executive since April 2004. Appointed 
to the Board in May 2001 and previously chief 
executive of the original Homeserve business 
having founded Home Service in conjunction 
with South Staffordshire Group in 1993. 
Previously a brand manager with Procter & 
Gamble, followed by management consultancy 
with Deloitte and his own company.
Andrew Belk (41), BSc (Hons) ACA
Group ﬁ nance director since September 2002, 
having previously been commercial director of 
the original Homeserve business. Previously 
chief executive ofﬁ cer of a UK telecoms 
company and a corporate ﬁ nance director with 
Andersen.
Ian Carlisle (43) 
Appointed to the Board in November 2004. 
Joined the executive team in June 2003 as chief 
operating ofﬁ cer of Homeserve Assistance and 
chief executive ofﬁ cer of Highway. Previously 
managing director of Autoglass Ltd, prior to 
which he was divisional commercial director at 
Marks & Spencer plc. 
30
Main Board 
Report & Accounts 2005
HS Report_P ges 1-33.indd 30 1/6/05 4:46:51 pm Justin Jewitt (51), BA (Hons) †*•✧ Appointed to the Board in 2003. Senior non-
executive director of NHS Shared Business 
Services and a director of a number of private 
companies. Previously chief executive of Nestor 
Healthcare Group plc and managing director of 
two of BET’s business services companies. He 
is visiting professor of healthcare at Glamorgan 
University.
John Maxwell (60), CA, CCMI †*•✧ Appointed as senior independent director in 
April 2004. Previously director general/chief 
executive of The Automobile Association and 
an executive director of Prudential Corporation 
plc. Currently a non-executive director of a 
number of companies including Royal & Sun 
Alliance plc and Provident Financial plc. He is 
also chairman of DX Services plc.
Barry Gibson (53) †*•✧ Appointed to the Board in April 2004. 
Currently senior non-executive director of 
William Hill plc and a non-executive director 
of National Express plc and Somerﬁ eld plc. 
Previously group retailing director at BAA plc 
and group chief executive of Littlewoods plc.
Emma Thomas (38), MA
Appointed Group company secretary in March 
2005. A solicitor, she was previously Group 
company secretary of Nestor Healthcare 
Group plc, assistant secretary of Kingﬁ sher plc 
and company secretary of Hazlewood Foods 
plc.
Homeserve plc 31
HS Report_P ges 1-33.indd 31 1/6/05 4:46:54 pm Directors’ Biographical Details
Jonathan King (44), BSc (Hons) Managing director of Homeserve GB since 
October 2001 having joined in October 2000 
as business development director. Previously 
he worked in retail marketing with the Boots 
Company as group brand manager for No.7 
Cosmetics.
Rachael Hughes (34), BA (Hons) Managing director of Doméo, Homeserve’s 
joint venture with Generale des Eaux Services 
in France since launch in June 2001. Previously 
managing director of CHEP Argentina SA 
following a total of seven years with CHEP 
Equipment Pooling Systems in North and South 
America and GKN Group in the UK.
Edward Fitzmaurice (42), MBA, BE (Hons) Joined the executive team in April 2005 as 
chief executive of Homeserve Warranties from 
Dixons Store Group PLC where he was the 
managing director of Mastercare. Previously he 
worked in consultancy and engineering.
Simon Hancox (38), BA (Hons) Managing director of Homeserve Claims 
Management since November 2001 having 
joined from AXA where he worked in 
Assistance. Previously at CGU in London, 
having joined Commercial Union as a graduate 
management trainee where he subsequently 
moved through many of the functional 
disciplines.
Report & Accounts 2005 32
Executive Board
HS Report_P ges 1-33.indd 32 1/6/05 4:46:57 pm Homeserve plc
 Appointed as managing director of Homeserve 
director of Courts Worldwide International. Spent 
2 years on the UK Board as operations & sales 
director and commercial director. Prior to this 
he was group buying and marketing manager at 
Comet Plc following a number of years at Thorn 
EMI in various senior operational and marketing 
roles.
Martin Bennett (36), BCom (Hons) Commercial director of Homeserve since 
November 2003 having joined from Clarity 
Group where he was ﬁ nance director. 
Previously a senior manager with Corporate 
Finance at Andersen.
Jeremy Middleton (44), BA (Hons) Non executive director of the original 
Homeserve business since set up in 1993. 
director of the Marketing Department Ltd since 
1991, a management consultancy specialising in 
new business development.
Key:
† Non executive
* Audit Committee (Chairman: John Maxwell)
• Nomination Committee (Chairman: Brian Whitty)
✧ Remuneration Committee (Chairman: Justin Jewitt)
 Executive Board only
33
HS Report_P ges 1-33.indd 33 1/6/05 4:47:00 pm
Retail Warranties in July 2004. Previously managing 
Ged Dempsey (53), DMS MSc  Report & Accounts 2005 34
Directors and Advisers
Directors Brian Howard Whitty, FCA, Executive Chairman
  Richard David Harpin, BA (Hons), CdipAF
  John Hunter Maxwell, CA, CCMI
  Andrew John Belk, BSc (Hons), ACA
  Ian Carlisle
  John Michael Barry Gibson  
  Justin Allen Spaven Jewitt, BA (Hons)
 Secretary Caroline Emma Roberts Thomas, MA
 Registered Office Cable Drive, Walsall WS2 7BN
  Telephone: 01922 426262
  Registered in England, Number 2648297
 Stockbrokers JPMorgan Cazenove Ltd
  20 Moorgate, London EC2R 6DA
 Financial Advisers N M Rothschild & Sons Ltd
  New Court, St Swithins Lane, London EC4P 4DU
 Financial PR Advisers Tulchan Communications Group Ltd
  6th Floor, Kildare House, 3 Dorset Rise, London EC4Y 8EN
Auditors Deloitte & T ouche LLP  
  Four Brindleyplace, Birmingham B1 2HZ
 Legal Advisers Martineau Johnson
  No. 1 Colmore Square, Birmingham B4 6AA
Wragge & Co LLP
  55 Colmore Row, Birmingham B3 2AS
Bankers HSBC Bank plc
  130 New Street, PO Box 68, Birmingham B2 4JU
Royal Bank of Scotland plc
  2 St Philips Place, Birmingham B3 2RB
Registrars Computershare Investor Services PLC
  PO Box 82, The Pavilions, Bridgwater Road, 
  Bristol BS99 7NH
24539 HS Report 2005_p ges 34-83_2 col.indd 34 1/6/05 5:06:20 pm Homeserve plc 35
The Directors have pleasure in presenting their Report and Accounts 
for the year ended 31 March 2005.
Principal Activities and Review of Business
During the year the Group was engaged in the provision of insured 
repair solutions and emergency services to the home. Details of Group 
activities are set out in the Chairman’s Statement and Chief Executive’s 
Review on pages 2 to 18. On 6 April 2004 South Staffordshire Plc, 
comprising the Regulated Water Supply business and the closely related 
Echo, Rapid, Underground Pipeline Services and Aqua Direct businesses, 
was demerged from the Group.  During the year the Commercial 
Outsourcing businesses were disposed of. The results of the demerged 
Group and the businesses disposed in the year have therefore been 
shown as discontinued operations.
On 5 April 2004 the Company changed its name from South 
Staffordshire Group Plc to Homeserve plc.
Financial Results and Dividends
The Group’s results are shown in the consolidated proﬁ t and loss 
account on page 52. The directors are recommending the payment on 
5 August 2005 of a ﬁ nal dividend of 10.9 pence per ordinary share to 
shareholders on the register at the close of business on 3 June 2005. 
For further details of the dividend see note 9 to the accounts.
Demerger
At an Extraordinary General Meeting of the Company held on 5 April 
2004 shareholders approved the demerger of South Staffordshire Plc 
by means of a dividend in specie whereby each shareholder received 
1 ordinary share in South Staffordshire Plc for every 5 ordinary shares 
held in the Company.  Approval was also given for the acquisition of 
the 24.98% minority shareholding in the original Homeserve business 
held by Richard Harpin and Jeremy Middleton.  Consideration for the 
acquisition of the minority shareholding was the issue of 11,600,000 
ordinary shares in the Company. The new shares issued in respect of 
this transaction did not qualify for the dividend in specie or the ﬁ nal 
dividend in respect of the Company for the year ended 31 March 2004. 
In addition, a one-off payment of £150,000 each was paid to Messrs 
Harpin and Middleton in compensation for the loss of certain enhanced 
dividend rights that they held in respect of the original Homeserve 
business.
Share Capital
Following approval by shareholders at an Extraordinary General 
Meeting on 5 April 2004 each ordinary share of 10 pence each in the 
capital of the Company was sub-divided into 4 ordinary shares of 2½ 
pence each and then every 5 ordinary shares of 2½ pence each were 
consolidated into 1 ordinary share of 12½ pence each.  Immediately 
following this, Richard Harpin was allotted 9,050,550 ordinary shares of 
12½ pence each and Jeremy Middleton was allotted 2,549,450 ordinary 
shares of 12½ pence each in the capital of the Company in connection 
with the acquisition of their minority shareholding in the original 
Homeserve business.
Memorandum & Articles of Association
At an Extraordinary General Meeting held on 5 April 2004 shareholders 
approved the amendment of the Memorandum of Association to 
take account of the change in activities following the demerger.  The 
adoption of new Articles of Association was also approved.
Directors
Details of the directors who held ofﬁ ce at 23 May 2005 are given on 
page 34. Messrs Whitty, Belk, Harpin and Jewitt served throughout the 
ﬁ nancial year. On 6 April 2004 Lindsay Bury, David Sankey, John Harris 
and Panton Corbett resigned as directors of the Company.  On the 
same date, Barry Gibson and John Maxwell were appointed to the 
Board. Ian Carlisle was appointed on 30 November 2004 and Robert 
Harley resigned on 24 March 2005.
Ian Carlisle, having been appointed since the last Annual General 
Meeting, will retire from the Board in accordance with the Articles of 
Association and, being eligible, will offer himself for election. Brian Whitty 
and Andrew Belk retire by rotation and, being eligible, offer themselves 
for re-election. Messrs Whitty, Belk and Carlisle have one year rolling 
service contracts terminable on 12 months’ notice by either party. 
The beneﬁ cial interests of the directors in the shares of the Company 
and the options held as at 31 March 2005 and 23 May 2005 are 
set out in the Remuneration Report. None of the directors serving 
at the year end had a beneﬁ cial interest in the share capital of any 
subsidiary company save for Mr Harpin who, at 31 March 2004, held 
21,300 ordinary shares of £1 each in Homeserve Assistance plc which 
represented 19.48% of the share capital of that company. On 5 April 
2004 these shares were exchanged for shares in the Company.  
Directors’ Report
24539 HS Report 2005_p ges 34-83_2 col.indd 35 1/6/05 5:06:21 pm Report & Accounts 2005 36
Annual General Meeting
The following special business will be transacted at the Annual General 
Meeting of the Company, to be held at 30 Old Broad Street, London, 
EC2N 1HQ on 29 July 2005 at 10.00am.
Allotment of Shares and Pre-emption Rights
There will be proposed at the Annual General Meeting a renewal of the 
directors’ general authority to allot shares up to a maximum nominal 
amount (“the Section 80 Amount”) and the directors’ authority to issue 
shares for cash without applying the statutory pre-emption rights up to 
a maximum nominal amount (“the Section 89 Amount”).
Authority to Purchase Own Shares
Approval is being sought for the Company to renew the authority 
contained in the Articles of Association to purchase its own ordinary 
shares. The Board has no ﬁ rm intention that the Company should make 
purchases of its own shares if the proposed authority becomes effective, 
but would like to be able to act quickly if circumstances arise in which 
such a purchase would be desirable. Purchases will only be made on 
the London Stock Exchange and only in circumstances where the Board 
believes that they are in the best interests of the shareholders generally 
and would result in an increase in EPS. Any shares purchased would be 
cancelled.
Further detail on the resolutions to be proposed at the Annual General 
Meeting can be found in the Shareholder Circular.
Auditors
A resolution proposing the reappointment of Deloitte & T ouche LLP as 
auditors and authorising the Board to ﬁ x their remuneration will be put 
to the Annual General Meeting.
Fixed Assets
Capital expenditure on tangible ﬁ xed assets amounted to £9.8m during 
the year. 
Donations
Charitable donations of £37,000 (2004: £89,000) were made during the 
year. No political contributions were made in either year.
Payment of Creditors
The Group’s policy is to pay suppliers in line with the terms of payment 
agreed with each of them when contracting for their products or 
services. Trade creditors at 31 March 2005 represent 63 days of 
purchases during the year (2004: 84 days) for the Group and nil for the 
Company. 
Substantial Shareholdings
As far as the directors are aware, no person had a beneﬁ cial interest in 
3% or more of the voting share capital at 23 May 2005, except for the 
following:
Ordinary 
 Shares Percentage
Richard Harpin 10,827,697 16.9%
Jeremy Middleton 2,913,397 4.6%
By Order of the Board
Emma Thomas
Company Secretary
23 May 2005
Directors’ Report
24539 HS Report 2005_p ges 34-83_2 col.indd 36 1/6/05 5:06:21 pm Homeserve plc 37
Introduction
The Company complied throughout the year with the provisions set 
out in the Combined Code published by the UK Financial Reporting 
Council in July 2003 (“the Code”) except where indicated on page 38.
The manner in which the Group applies the principles of good 
governance contained in the Code is described in the appropriate parts 
of this Report and Accounts. Thus the application by the Company of 
the Code’s principles to remuneration matters at pages 42 to 49 should 
be read in conjunction with the statement below. A review of the 
Group’s position and prospects is set out in the Chairman’s Statement, 
the Chief Executive’s Review and Financial Review on pages 2 to 25.
The Board
The Board of directors leads and controls the Company by holding 
at least eight meetings a year at which its current and forecast 
performance is monitored and reviewed. Regular reports on monthly 
performance and other matters of importance to the Company ensure 
that the Board is supplied in a timely manner with the information 
necessary to make an informed judgement. In addition, the Board 
holds regular meetings to discuss and devise the Company’s medium 
and long-term strategic focus and management development strategy. 
Regular informal presentations are given and meetings held in order to 
apprise directors of issues of importance affecting the Group. 
In accordance with the provisions of its Articles of Association and 
with the Code, each director is subject to election by the Company’s 
shareholders at the Annual General Meeting immediately following 
appointment and subject to re-election at least every three years 
thereafter.
The Board has a Schedule of Matters speciﬁ cally reserved to it for 
decision and has approved the written terms of reference for the 
various committees to which it has delegated its authority in certain 
matters. Matters reserved to the Board include the recommendation 
or approval of dividends, the approval of ﬁ nal and interim ﬁ nancial 
statements, major ﬁ nancial commitments, the acquisition of companies 
or businesses, appointments to the Board and its committees, the 
Group’s future strategy and the Group’s internal controls. It also 
provides that the Board receive regular reports from chairmen of its 
committees. The Schedule is kept under regular review. 
During the year, the Board was led by Brian Whitty, the Executive 
Chairman.  He also served as a member of the Board’s Nomination 
Committee. 
The Chairman’s responsibilities are clearly deﬁ ned in a written 
speciﬁ cation agreed by the Board during the year and which makes 
clear the division of responsibilities between the Executive Chairman 
and the Chief Executive. They include the smooth running of the 
Board, effective communication between executive and non-executive 
directors and the general progress and long-term development of 
the Group.  His executive responsibilities include major strategic 
acquisitions, relations with shareholders and those relating to property, 
legal and governance matters. The Board has established a formal 
procedure for directors wishing to seek independent legal and other 
professional advice and all members of the Board have access to the 
advice and services of the Company Secretary.
The day-to-day running of the Company’s business is delegated to an 
Executive Board, also led by Brian Whitty, and which includes Richard 
Harpin, Chief Executive, Andrew Belk, Group Finance Director, and Ian 
Carlisle, Chief Executive of Homeserve Emergency Services, who was 
appointed as a director in November 2004. Other members of the 
Executive Board, together with autobiographical details, are listed on 
pages 30 to 33. 
Richard Harpin, the Chief Executive, is responsible for leading business 
development, operational issues and marketing. He is also responsible 
for all operational public relations and tactical acquisitions.
During the year, three independent non-executive directors with 
extensive business, ﬁ nance and marketing backgrounds provided the 
Board with a breadth of experience and with independent judgement. 
John Maxwell and Barry Gibson were appointed as independent 
non-executive directors on 6 April 2004. Justin Jewitt served as an 
independent non-executive director throughout the year.
John Maxwell served as the Company’s independent senior non-
executive director and Chairman of the Audit Committee from the 
date of his appointment. 
Corporate Governance
24539 HS Report 2005_p ges 34-83_2 col.indd 37 1/6/05 5:06:21 pm Report & Accounts 2005 38
Corporate Governance
From 30 November 2004, the date of Ian Carlisle’s appointment to 
the Board until 24 March 2005, the date of Robert Harley’s resignation 
as a director, the composition of the Board was not compliant with 
the Code, since it comprised four executive directors and three 
independent non-executive directors. From 1 April until 6 April 2004, 
the date of the demerger of the Company’s Water Supply operation, 
the Board did not have a senior independent director, as it had an 
experienced independent non-executive Chairman. During the same 
period, the composition of the Remuneration Committee was not 
compliant with the Code, since John Harris, who resigned on 6 April 
2004, was not considered by the Board to be independent. The 
constitution of the Board and its committees is now fully compliant and 
it is the Board’s intention that they remain so.
The Board actively encourages all directors to deepen their knowledge 
of their roles and responsibilities and to gain a clear understanding of the 
Company and the environment in which it operates; and has recently 
adopted a formal policy on the induction and training of directors. Newly 
appointed Board members have undergone an induction programme and 
have received the opportunity to receive formal training. During the year, 
the Group’s non-executive directors have met with various members of 
the Group’s management teams and have visited several of the operating 
businesses. Further training for directors is available and offered as 
appropriate.
During the year, the Board adopted a formal process for reviewing 
its own effectiveness and that of its individual members. In addition, it 
continued to ensure that regular meetings of the non-executive directors 
were held without the executive directors, and at least once a year, 
without the Chairman present, in order to evaluate his performance. 
The evaluation process, which was facilitated by external advisers, was 
completed during the year, comprising one-on-one meetings to discuss 
the existing and future needs of the Board, its composition and the skills 
of its members. The results of the process were reviewed by the whole 
Board in April 2005.
Committees
The Board operates a number of committees to which it has delegated 
certain speciﬁ c responsibilities and each of which has formally adopted 
terms of reference. These comprise the Nomination, Audit and 
Remuneration Committees. 
Nomination Committee
The Nomination Committee, which makes recommendations to the 
Board on the appointment of directors, is chaired by Brian Whitty and also 
comprises Barry Gibson, Justin Jewitt and John Maxwell.  The Committee 
draws on the advice of such professional advisers as it considers necessary 
and, during the year, met to consider the appointment of Ian Carlisle as a 
further executive director to the Board. 
The T erms of Reference of the Nomination Committee, which were 
reviewed and updated by the Board during the year, are available on the 
Company’s website. 
Audit Committee
The Audit Committee is chaired by John Maxwell, a chartered accountant 
and the senior independent non-executive director. It comprises only 
independent non-executive directors; Barry Gibson and Justin Jewitt being 
its other members.
The Committee meets regularly to review the preliminary and interim 
results before they are presented to the Board, to receive reports 
from the Company’s internal and external auditors and to make 
recommendations to the Board on accounting policies. Its primary duties 
include the monitoring, on behalf of the Board, of compliance with and the 
effectiveness of the Company’s accounting and internal control systems. 
The Committee’s duties also include agreeing audit strategy, monitoring the 
scope and results of the Company’s annual audit and the independence 
and objectivity of its auditors. The external auditors and the Group Finance 
Director are invited but are not entitled to attend all meetings.
The Committee has implemented a policy relating to the use of the 
external auditors for non-audit services and monitors fees paid in respect 
of such services. The external and internal auditors are provided with the 
opportunity to raise any matters or concerns that they may have, in the 
absence of the executive directors.
The T erms of Reference of the Audit Committee, which were reviewed 
and updated during the year by the Board are available on the Company’s 
website. The Committee has also agreed and implemented a procedure 
for reviewing and assessing its own effectiveness and that of the external 
audit process. 
24539 HS Report 2005_p ges 34-83_2 col.indd 38 1/6/05 5:06:21 pm Homeserve plc 39
Remuneration Committee
The Remuneration Committee’s responsibilities include determining the 
Group’s overall remuneration strategy and the remuneration packages 
of the executive directors and other senior executives, after having 
consulted with the Chairman and Chief Executive and having received 
professional advice from remuneration consultants. The Committee 
is also responsible for approving the grant and exercise of executive 
long-term incentive arrangements. In determining remuneration policy, 
the Committee is free to obtain such professional advice as it sees ﬁ t, 
and regularly monitors both the policies of comparator companies and 
current market practice, in order to ensure that the packages provided 
are sufﬁ cient to attract and retain executive directors of the necessary 
quality. The Committee’s Terms of Reference, which were reviewed and 
updated during the year, are available on the Company’s website.
From his appointment as a director on 6 April 2004 until 13 August 
2004 John Maxwell acted as Chairman of the Remuneration 
Committee. The Committee has been chaired by Justin Jewitt since 13 
August 2004. Barry Gibson and John Maxwell also serve as members of 
the Committee.
The remuneration of non-executive directors is a matter for the 
Company’s Board.
Short biographies of each of the directors, including their membership 
of the Board’s Committees outlined above, may be found on pages 30 
to 33.
Attendance at Meetings
The table below sets out the attendance at meetings of the Board and 
its Committees by each member during the year.
  
Messrs Bury, Harris, Sankey and Corbett resigned on 6 April 2004, before 
the date of the ﬁ rst meeting in the year.
*
 Mr Carlisle was appointed on 30 November 2004, between this date and the year end only two Board meetings were held.
 Board Audit Committee Remuneration Committee
Number of meetings held 9 4 7
Meetings attended
B H Whitty 9 — —
R D Harpin 8 — —
A J Belk 9 — —
R I Harley 8 — —
I Carlisle
*
 2 — —
J H Maxwell 8 4 6
J A S Jewitt 9 4 7
J M B Gibson 8 4 6
24539 HS Report 2005_p ges 34-83_2 col.indd   39 3/6/05   10:46:36  m Report & Accounts 2005 40
Corporate Governance
Relationships with Shareholders
The Board, on the Company’s behalf, recognises the need to maintain an 
active dialogue with its shareholders. The Chairman and Group Finance 
Director meet regularly with institutional investors and analysts to discuss 
the Company’s performance and all shareholders have access to the 
senior independent non-executive director, who is available to discuss 
any questions which investors may have in relation to the running of 
the Company. The Board encourages shareholders to attend the Annual 
General Meeting and is always willing to answer questions, either in the 
meeting itself or, more informally, afterwards. In addition, shareholders may 
contact the Company direct, either through its website or by telephoning 
its ofﬁ ces.
The Board also recognises the need to ensure that all directors are 
fully aware of the views of major shareholders about the Company. 
Copies of all analysts’ research relating to the Company are circulated 
to all directors upon publication, monthly analyses of the Company’s 
shareholder register are made available to the Board and written 
feedback from shareholders and analysts, prepared by the Company’s 
brokers and public relations advisers is provided to all directors after 
every signiﬁ cant corporate event and at least twice a year.
Going Concern
The directors conﬁ rm that, after reviewing the Group’s budget for 
2005/6, the three year operating plan and projected cash ﬂ ows, they 
have a reasonable expectation that the Group has adequate resources 
to continue in operational existence for the foreseeable future. For this 
reason, they continue to adopt the going concern basis in preparing the 
accounts.
Internal Controls
As required by the UK Listing Authority, the Company has complied 
throughout the year with the provisions of the Code relating to internal 
controls, having implemented the procedures necessary to comply 
with the guidance issued in September 1999 (the Turnbull Committee 
Report) and to report in line with that guidance.
The Board is responsible for the Group’s system of internal control 
and for reviewing its effectiveness. Such a system is designed to manage 
rather than eliminate the risk of failure to achieve business objectives 
and can only provide reasonable and not absolute assurance against 
material misstatement or loss.
There is an established internal control framework in place, which is 
continually reviewed and updated taking into account the changing nature 
of the Group’s operations. This process has been in place for the whole 
of the year and up to the date of approval of the Annual Report and 
Accounts. 
The key elements of the system operated by the Group to identify, 
evaluate and manage signiﬁ cant risks include the following:
•  The Group’s management operates a formal process for identifying, 
managing and reporting on operational and ﬁ nancial risks faced by 
each of the Group’s businesses, whereby each of the risks identiﬁ ed 
is reviewed in detail by the executive directors on a regular basis. 
Executive Board meetings are held on a monthly basis at which the 
Group’s senior managers report on the progress of the companies 
or discipline for which they are responsible and share best practice. 
•  A clearly deﬁ ned organisation structure is in place with clear lines 
of accountability and appropriate division of duties. The Group’s 
ﬁ nancial regulations specify authorisation limits for individual 
managers, with all material transactions being approved by the Board.
24539 HS Report 2005_p ges 34-83_2 col.indd 40 1/6/05 5:06:22 pm Homeserve plc 41
•  Three year business plans, annual budgets and investment proposals 
for each business are formally prepared, reviewed and approved by 
the Board.
•  The Group has a dedicated Internal Audit function which reports 
directly to the Audit Committee and a formal audit plan is in place 
to address the key risks across the Group.
•  Financial results and cash ﬂ ows, including a comparison with budgets 
and forecasts, are reported to the Board on a monthly basis, with 
variances being identiﬁ ed to initiate action to mitigate them.
•  Appropriate treasury policies are in place.
•  During the year, the Committee adopted a formal “whistleblowing” 
policy for employees who wish to raise any issues of concern relating 
to the Company’s activities on a conﬁ dential basis.
•  A mechanism exists to extend the Group’s formal risk management 
processes to any signiﬁ cant new business acquired or begun by 
the Company immediately upon acquisition or start-up. In this way, 
the Board is able to conﬁ rm that the necessary process has been 
operated by the Group for the whole of the year.
•  At least twice a year, the Audit Committee reviews a register 
summarising the signiﬁ cant risks faced by the businesses or the 
Group as a whole, the likelihood of those risks occurring and the 
steps being taken to minimise or otherwise manage those risks.
As required by the Turnbull Guidance, the Board has carried out an 
annual assessment of the effectiveness of the system of internal controls. 
The processes applied by the Board include:
•  At the end of the year, the executive directors compile a report 
identifying the key risks faced by the Group. This report is considered 
by the Audit Committee and the Board before the Annual Report 
and Accounts is approved.
•  The Group has an independent Internal Audit function which 
reviews the overall effectiveness of the risk management process for 
the key risks and reports independently to the Audit Committee.
•  At each meeting the Audit Committee reviews reports of the 
executive directors and the internal and external auditors, on any 
issues identiﬁ ed as having a potentially substantial impact on the 
results of the Group, or areas of control weakness.
•  The Audit Committee reviews the effectiveness of the Group’s 
system of managing ﬁ nancial risk and refers any risks it considers 
signiﬁ cant to the Board for its consideration.
•  At least twice a year, the Audit Committee reviews the work plans 
and results of each of the internal and external auditors.
•  The Audit Committee Chairman reports the outcome of all Audit 
Committee meetings to the Board, which also receives minutes of all 
such meetings.
24539 HS Report 2005_p ges 34-83_2 col.indd 41 1/6/05 5:06:22 pm Report & Accounts 2005 42
Remuneration Report
This report has been prepared in accordance with Schedule 7A to the 
Companies Act 1985.  The report also meets the relevant requirements 
of the Listing Rules of the Financial Services Authority and describes 
how the Board has applied the Principles of Good Governance relating 
to directors’ remuneration.  A resolution to approve the report will be 
proposed at the Annual General Meeting.
The Act requires the auditors to report on certain parts of the report 
and to state whether, in their opinion, those parts of the report have 
been properly prepared in accordance with the Companies Act 1985.  
The report has therefore been divided into separate sections for 
audited and unaudited information.
Unaudited information
Remuneration Committee
Role
The Remuneration Committee is responsible for determining the pay, 
beneﬁ ts and contractual arrangements for the executive directors 
of the Company and the Executive Board.  It aims to develop and 
recommend remuneration strategies that drive performance and reward 
it appropriately. In determining its policy, the Committee has paid regard 
to the principles and provisions of good governance contained in the 
Combined Code published in July 2003 by the UK Financial Reporting 
Council (“the Code”). The Committee operates under the delegated 
authority of the Board and its Terms of Reference are available on the 
Company’s website – www.homeserve.com.
Membership
During the year, the Committee comprised each of the Board’s 
independent non-executive directors. Justin Jewitt served throughout 
the year and Messrs Maxwell and Gibson were appointed on 6 April 
2004.  Justin Jewitt was appointed as Chairman on 13 August 2004 
replacing John Maxwell who served as Chairman from 6 April 2004 
until 13 August 2004.
Messrs Bury, Harris, Corbett and Sankey resigned on 6 April 2004.
The Committee has also received assistance from Brian Whitty, the 
Group’s Executive Chairman, Richard Harpin, the Chief Executive, 
Christopher Powell, the former Company Secretary and Anna Maughan, 
the Assistant Company Secretary, all of whom attended meetings of 
the Committee as required. Messrs Whitty and Harpin did not take 
part in discussions in respect of matters relating directly to their own 
remuneration. 
Meetings
Attendance at Committee meetings held during the year and the number 
of meetings held is set out on page 39. 
Advisers
During the year, the Committee appointed Monks Partnership as advisers, 
in order to undertake an initial review of executive remuneration following 
the demerger of the Company’s Water Supply operation.  In November 
2004, the Committee appointed Kepler Associates to undertake a 
comprehensive review of the Board’s remuneration policy and to advise the 
Committee on an ongoing basis.  The Company has also instructed Kepler 
Associates to advise it on certain remuneration matters during the year, 
for example in relation to the implementation of the new Deferred Bonus 
Plan.  Other than in relation to advice on remuneration, Kepler has no other 
connections with the Company.
Remuneration Policy
During the year, the Committee established a clear policy for the 
remuneration of executive directors and senior executives. Its overall aim is 
to provide a package of remuneration which;
•  is sufﬁ cient but no more than is necessary to attract, retain and motivate 
high calibre executives including the Company’s executive directors and 
senior executives;
•  aligns rewards with the Company’s performance;
•  rewards good performance with remuneration that is in line with that 
payable by broadly comparable businesses i.e. high-growth companies of 
similar size and services companies with similar operating characteristics;
•  rewards exceptional performance in such a way as to align the 
executives’ interests with those of the Group’s shareholders, equating to 
upper quartile rewards for upper quartile performance.
T o that end, the Committee structures executive remuneration in two 
distinct parts: ﬁ xed remuneration of basic salary, pension and beneﬁ ts and 
variable performance-related remuneration in the form of a cash bonus and 
long-term incentive arrangements. Remuneration is structured so that the 
variable pay element forms a signiﬁ cant portion of each director’s package.  
Assuming that shareholders approve the implementation of the Deferred 
Bonus Plan at the forthcoming Annual General Meeting, the proportion 
of ﬁ xed and variable pay for the Executive Chairman and other executive 
directors in 2005/6 will be as follows:
24539 HS Report 2005_p ges 34-83_2 col.indd 42 1/6/05 5:06:22 pm Homeserve plc 43
Remuneration for Executive Directors
The main components of the remuneration package for executive 
directors are:
a) Basic salary
Basic salary for each executive director is determined by the 
Remuneration Committee taking into account the roles, responsibilities, 
performance and experience of the individual.  This is normally reviewed 
annually with any increase usually being effective from 1 April (unless 
responsibilities change).  Salary levels are set taking into account 
information from the Committee’s advisers on salary levels for similar 
positions at comparable companies.
b) Annual bonus
The annual bonus is designed to drive the short term performance of 
the Company and encourage real year on year growth in proﬁ tability.  
No annual bonus is paid unless a very high level of proﬁ t performance 
is achieved. The maximum annual bonus is 75% of basic salary. Previously, 
the maximum opportunity was 50% of salary but was increased in the 
year at the same time as the adoption of more stretching performance 
requirements and in order to better align the directors’ bonus 
opportunities with market practice.
For executive directors, a bonus opportunity of up to 60% of basic 
salary is available for group ﬁ nancial performance, which is measured 
by proﬁ t before tax, amortisation and exceptional items.  The remaining 
15% is based on measurable personal targets, which relate to the part 
of the business or function for which the director is responsible.
Provided their personal objectives are met in full, the normal “on-target” 
bonus payable to executive directors in any year is expected to be in 
the region of 40% of their basic salary.
During the year the Committee reviewed the Company’s policy on the 
provision of bonuses and resolved that bonuses should no longer be 
pensionable. This affected the Executive Chairman, who was entitled to 
such beneﬁ ts under the terms of his contract of employment, entered 
into on his appointment in 1995.  From 1 April 2005, his pensionable 
remuneration will only include basic salary.
In order to encourage executive directors to build up a personal 
shareholding in the Company, a Deferred Bonus Plan (DBP) is being 
proposed at the forthcoming Annual General Meeting. Under the terms 
of the proposed DBP , directors will have the opportunity to invest some 
or all of their annual bonus into shares and to defer receipt for three 
years. Matching shares can be earned if the T otal Shareholder Return 
(TSR) of the Company over a three year period exceeds the median of 
the FTSE 350 index of companies.  If the Company’s TSR performance 
is at the median, the matching ratio will be 0.5:1.  If performance is in 
the top decile or above the matching ratio will be 3:1.
Full details on the proposed DBP are contained in the Shareholder 
Circular.
Fixed 
Pay
Variable 
Pay
50 45
Salary & beneﬁ ts 100  100 
Pension 45 
55
 20 
50
Annual bonus 40  40 
ESOP 26  26
LTIP 17  17 
DBP matching opportunity 36  36 
 Remuneration  Executive Chairman  Other Executive Directors
 Element  
Target/fair value  As % of total Target/fair value  As % of total
  (% of salary)  remuneration (% of salary)  remuneration
24539 HS Report 2005_p ges 34-83_2 col.indd 43 1/6/05 5:06:23 pm Report & Accounts 2005 44
Remuneration Report
c) Long term incentives
Long term incentives were provided during the year through an 
Executive Share Option Plan (ESOP) and a Long Term Incentive Plan 
(LTIP).
The ESOP was approved by shareholders in 2001 and is designed 
to encourage and reward continuing improvement in the Company’s 
performance over the longer term.  Its participants are the executive 
directors and other senior executives who are best placed to inﬂ uence 
Company performance.  Options are granted on an annual basis and 
become exercisable between 3 and 10 years from the date of grant 
subject to the achievement of stretching performance criteria.  The 
option price is the market price on the last dealing day prior to the date 
of grant. 
Options become exercisable based on a sliding scale and can only 
be exercised fully if annual average Earnings Per Share (EPS) growth 
exceeds RPI by at least 10% pa over a three year period.  Options 
are not exercisable if annual average EPS growth is less than RPI + 4% 
pa.  For options granted after 2004 retesting is not permitted but for 
options granted before this date retesting of the performance criteria 
is permitted in years four and ﬁ ve with performance measured from a 
ﬁ xed date.
Previously, the Company operated a policy which required directors 
to hold shares in the Company equal to or exceeding 50% of the 
number of shares under option to be exercised.  During the year, the 
Committee reviewed this policy.  Accordingly, the policy has been 
amended to require directors to build up a share holding at least equal 
in value to his annual basic salary. If the holding requirement has not 
been fulﬁ lled at the point of exercise of any option, the director must 
retain 50% of the shares exercised (net of tax and exercise costs) until 
the holding requirement is achieved. 
If the DBP is approved the maximum annual grant under the ESOP will 
be 150% of salary.
Details of options granted in the year are shown on page 49.
The LTIP was approved by shareholders in 2004.  One-off awards of 
200% of salary were made in the year to executive directors under the 
LTIP to incentivise them towards speciﬁ c goals reﬂ ecting the Company’s 
aim to deliver exceptional shareholder value over the 5 years from 
2004.  Awards were granted as nil cost share options.
Awards will only vest in full if the Company’s absolute TSR exceeds 
180% by the ﬁ fth anniversary of the date of grant and the annual 
average EPS growth in the ﬁ ve year period exceeds RPI by at least 10% 
pa.  No part of the award will vest if absolute TSR growth is less than 
130% over the 5 years.
Details of awards made in the year are shown on page 49.
Key executives other than executive directors are able to participate in 
the Key Executive Incentive Plan (KEIP).  This will be a special one-off 
award to incentivise key executives to deliver the Company’s stretching 
growth plans.
Executive directors may also participate in the Company’s Savings 
Related Share Option Scheme and Share Incentive Plan on the same 
basis as all other employees.  There are no performance criteria 
attached to these schemes.
d) Beneﬁ ts
Pensions, company car, medical insurance, holidays and other beneﬁ ts 
provided to executive directors are in line with those provided at 
executive director level in similar businesses.  During the year, beneﬁ ts 
were included in the pensionable remuneration of the Executive 
Chairman but this policy has been reviewed since the year end and 
beneﬁ ts will be excluded in future years.
Service Contracts
All executive directors’ contracts of service are terminable on twelve 
months’ notice by either party. Further details of the executive directors’ 
contracts are summarised in the table below:
Name of director Date of contract
B H Whitty 28 March 1996
R D Harpin 18 January 2002 
A J Belk 20 December 2002 
I Carlisle 
R I Harley 15 July 2002  
Mr Harley resigned on 24 March 2005.
24539 HS Report 2005_p ges 34-83_2 col.indd 44 1/6/05 5:06:23 pm
ay 1 M    2005  Homeserve plc 45
Liquidated damages are limited to the payment of one year’s 
remuneration, including beneﬁ ts.  Notice periods and payments are not 
extendable in takeover situations.
Non-executive directors serve under letters of appointment for periods 
of three years which include provisions in respect of liquidated damages 
limited to the payment of one year’s fee.  Their fees are determined by 
the Board within the limits set by the Articles of Association and based 
on information on fees paid in similar companies after having consulted 
remuneration advisers.  Details of their current three year appointments 
are as follows:
Name of director Date of appointment
J H Maxwell 6 April 2004  
J A S Jewitt 1 September 2003 
J M B Gibson 6 April 2004 
Pensions
Executive directors currently participate in one of two pension 
arrangements, the Water Companies Pension Scheme or the 
Homeserve Money Plan.  Normal date of retirement for executive 
directors is at age 60.  Both arrangements are non-contributory for 
directors.
The Water Companies Pension Scheme is a funded, Inland Revenue 
approved occupational deﬁ ned beneﬁ t scheme.  Its main features are:
•  pension at normal retirement age of one-half of ﬁ nal pensionable 
salary and a tax free lump sum of one and a half times ﬁ nal 
pensionable salary subject to completion of 40 years’ service;
•  life assurance of ﬁ ve times pensionable salary or ﬁ ve times basic 
salary as applicable;
•  pension payable in the event of ill health; and
•  spouse’s pension on death. 
The Homeserve Money Plan is a funded, Inland Revenue approved 
occupational deﬁ ned contribution pension scheme.  Its main features 
are:
•  employer contributions of up to 20%;
•  life assurance of ﬁ ve times basic salary;
•  permanent health insurance; and
•  spouse’s pension on death.
Where the beneﬁ ts provided to executive directors under these 
Schemes are restricted as a result of the Inland Revenue ‘earnings 
cap’ further provision is made either through a funded unapproved 
retirement beneﬁ t scheme or unapproved money purchase 
arrangements.  For the Executive Chairman, the Company provides 
compensation for the tax impact of the contributions to the funded 
unapproved retirement beneﬁ t scheme.
After the year end, the Committee reviewed the pension promise 
to the Executive Chairman and it has been agreed that from 1 April 
2005 his pension will accrue only on basic salary and from 1 April 
2006 no further contributions will be made to the funded unapproved 
retirement beneﬁ t scheme.
The Committee is currently reviewing the impact of the Pension 
Simpliﬁ cation regime that is due to come into effect from April 2006 
and will complete the review during 2005.
24539 HS Report 2005_p ges 34-83_2 col.indd 45 1/6/05 5:06:23 pm Report & Accounts 2005 46
Remuneration Report
Performance Graph
The graph opposite shows the Company’s performance, measured by TSR, 
compared with the performance of the FTSE 350 (also measured by TSR) for the 
five years ended 31 March 2005. This comparator has been chosen as it is to be 
used in respect of the proposed Deferred Bonus Plan.
50
100
150
200
250
300
350
 00 01 02 03 04 05
Audited Information
Directors’ Emoluments
  Compensation  
T otal    Basic   for loss of 
                  Emoluments    Salary Benefits Bonus office 
        2005  2004
    £’000 £’000 £’000 £’000 £’000  £’000
Executive
B H Whitty  330 23 248 — 601  408
R D Harpin  275 22 206 — 503  309
A J Belk   195 24 146 — 365  235
I Carlisle*  73 7 55 — 135  —
R I Harley*  143 20 107 174 444  202
D M Penna*  — — — — —  175
Non-executive
J H Maxwell*  40 — — — 40  —
J A S Jewitt*  32 — — — 32  13
J M B Gibson*  25 — — — 25  —
L C N Bury*  — — — 85 85  78
R P Corbett*  — — — — —  24
J R Harris*  — — — 25 25  24
D B Sankey*  — — — — —  55
T otal 2005 1,113 96 762 284 2,255
T otal 2004  1,075 95 353 —   1,523
*  Ian Carlisle was appointed on 30 November 2004
 Robert Harley resigned on 24 March 2005
 David Penna died on 17 December 2003
 Messrs Maxwell and Gibson were appointed on 6 April 2004
 Justin Jewitt was appointed on 1 September 2003
 Messrs Bury, Corbett, Harris and Sankey resigned on 6 April 2004
• Homeserve
• FTSE 350
24539 HS Report 2005_p ges 34-83_2 col.indd 46 1/6/05 5:06:23 pm Homeserve plc 47
Directors’ Pensions
Three directors were members of the Company’s defined benefit pension scheme. The following directors had accrued entitlements under the scheme 
as follows:
Accrued pension Increase in Accrued pension Transfer
 31 March accrued pension 31 March value of
 2005 in the year 2004 increase
 £’000 £’000 £’000 £’000
B H Whitty 12 1 11 18
R D Harpin 8 2 6 10
I Carlisle 2 1 1 12
The following table sets out the transfer value of the directors’ accrued benefits under the scheme calculated in a manner consistent with “Retirement 
Benefit Scheme - Transfer Values (GN 11)” published by the Institute of Actuaries and the Faculty of Actuaries.
Increase in
Transfer value Contributions transfer value in Transfer value
 31 March made by the the year net of 31 March
 2005 Director Contributions 2004
 £’000 £’000 £’000 £’000
B H Whitty 172 — 30 142
R D Harpin 64 — 14 50
I Carlisle 20 — 15 5
The transfer values disclosed above do not represent a sum paid or payable to the individual director. Instead they represent a potential liability of the 
pension scheme.
Five directors were members of money purchase schemes. Contributions paid by the Company in respect of such directors were as follows:
2005 2004
  £’000  £’000
B H Whitty   283 162
R D Harpin   35 21
A J Belk   39 31
R I Harley   14 12
I Carlisle   8 — 
24539 HS Report 2005_p ges 34-83_2 col.indd 47 1/6/05 5:06:24 pm Report & Accounts 2005 48
Remuneration Report
Directors’ Shareholdings
The beneficial interests of directors who served at the end of the year, together with those of their families, in the shares of the Company are as follows:
  31 March 2005  6 April 2004  31 March 2004
B H Whitty 58,938   58,901   73,627
R D Harpin  10,827,697  9,926,877  1,101,522
A J Belk  4,037  —  —
I Carlisle  2,090  —  2,053*
J H Maxwell  10,000  —  —*
J A S Jewitt  3,021  —  —
J M B Gibson  3,675  —  —*
*At date of appointment
Directors’ interests in shares have been restated as at 6 April 2004 to show the impact of the share consolidation. There were no changes in the 
directors’ interests in shares between 31 March and 23 May 2005.
Directors’ Options and Long Term Incentives
Details of the share options held by directors under SAYE Schemes are as follows:
 Granted  Exercised        Date
 31 March during during 31 March Option Date exercisable
 2005 year year 2004 price granted from
B H Whitty 3,524 — — 3,524 466.0p  10.12.02  1.2.08
A J Belk 2,027 — — 2,027 466.0p 10.12.02 1.2.06
R D Harpin 5,144 — — 5,144 328.0p 21.12.00 1.2.06
I Carlisle 1,744 1,744 — —* 543.0p 30.12.04 1.3.08
*At date of appointment
SAYE options are exercisable for a six month period from the date shown.
24539 HS Report 2005_p ges 34-83_2 col.indd 48 1/6/05 5:06:24 pm Homeserve plc 49
Details of the share options held by directors under Executive Share Option Schemes are as follows:
 Granted  Exercised       
 31 March during during 31 March Option Date
 2005 year year 2004 price granted
B H Whitty 150,000 — — 150,000 366.5p 3.6.98
 30,000 — — 30,000 377.5p 23.6.00
 72,500 — — 72,500 550.0p 17.7.01
 65,000 — — 65,000 589.0p 8.7.02
 80,000 — — 80,000 470.0p 1.7.03
 99,500 99,500 — — 661.0p 27.5.04
R D Harpin 49,000 — — 49,000 550.0p 17.7.01
 44,000 — — 44,000 589.0p 8.7.02
 60,000 — — 60,000 470.0p 1.7.03
 83,000 83,000 — — 661.0p 27.5.04
A J Belk 12,500 — — 12,500 550.0p 17.7.01
 17,500 — — 17,500 589.0p 8.7.02
 36,000 — — 36,000 466.0p 13.11.02
 50,000 — — 50,000 470.0p 1.7.03
 59,000 59,000 — — 661.0p 27.5.04
I Carlisle 42,500 — — 42,500* 470.0p 1.7.03
 65,000 — — 65,000* 661.0p 27.5.04
*At date of appointment
Executive Share Options are exercisable between three and ten years from the date of grant.
There were no changes in the options held between 31 March and 23 May 2005.
Details of the maximum number of shares receivable from conditional awards made under the Long Term Incentive Plan are as follows:
  Awarded Lapsed Vested     
  31 March during during during 31 March
  2005 year year year 2004
B H Whitty  99,500 99,500 — — —
R D Harpin  83,000 83,000 — — —
A J Belk  59,000 59,000 — — —
I Carlisle  65,000 — — — 65,000*
*At date of appointment
The market price of the Company’s shares at 31 March 2005 was £8.92
1
/2 (2004: £6.27). During the year the price ranged from £5.83 to £9.00.
The Company’s Register of Directors’ Interests, which is open to inspection at the Registered Office, contains full details of directors’ shareholdings and 
share options.
By Order of the Board
Emma Thomas
Company Secretary
23 May 2005
24539 HS Report 2005_p ges 34-83_2 col.indd 49 1/6/05 5:06:24 pm Report & Accounts 2005 50
Statement of Directors’ Responsibilities
The following statement, which should be read in conjunction with the 
auditors’ statement of their responsibilities set out on the following 
page, is made with a view to distinguishing for shareholders the 
respective responsibilities of the directors and of the auditors in relation 
to the accounts.
The directors are required by the Companies Act 1985 to prepare 
accounts for each ﬁ nancial year which give a true and fair view of the 
state of affairs of the Company and the Group as at the end of the 
ﬁ nancial year and the proﬁ t or loss of the Group for the ﬁ nancial year.
In preparing these accounts, the directors are required to:
•  select suitable accounting policies and then apply them consistently;
•  make judgements and estimates that are reasonable and prudent;
•  state whether applicable accounting standards have been followed, 
subject to any material departures disclosed and explained in the 
accounts; and 
•  prepare the accounts on a going concern basis unless it is 
inappropriate to presume that the Company will continue in 
business.
The directors have responsibility for keeping accounting records which 
disclose with reasonable accuracy at any time the ﬁ nancial position of 
the Company and the Group and which enable them to ensure that the 
accounts comply with the Companies Act 1985.
The directors have responsibility for taking such steps as are reasonably 
open to them to safeguard the assets of the Company and the Group 
and to prevent and detect fraud and other irregularities.
The directors, having prepared the accounts, are required to provide 
the auditors with such information and explanation as the auditors think 
necessary for the performance of their duty.
24539 HS Report 2005_p ges 34-83_2 col.indd 50 1/6/05 5:06:24 pm Homeserve plc 51
Independent Auditors’ Report
Independent Auditors’ Report to the Members of 
Homeserve plc
We have audited the financial statements of Homeserve plc for the 
year ended 31 March 2005 which comprise the consolidated profit 
and loss account, the balance sheets, the supplementary statements, the 
consolidated cash flow statement and notes to the cash flow statement, 
and the related notes 1 to 31.  These financial statements have been 
prepared under the accounting policies set out therein. We have also 
audited the information in the part of the directors’ remuneration report 
that is described as having been audited.
This report is made solely to the Company’s members, as a body, in 
accordance with section 235 of the Companies Act 1985.  Our audit 
work has been undertaken so that we might state to the Company’s 
members those matters we are required to state to them in an auditors’ 
report and for no other purpose.  T o the fullest extent permitted by law, 
we do not accept or assume responsibility to anyone other than the 
Company and the Company’s members as a body, for our audit work, 
for this report, or for the opinions we have formed.
Respective responsibilities of directors and auditors
As described in the statement of directors’ responsibilities, the 
Company’s directors are responsible for the preparation of the financial 
statements in accordance with applicable United Kingdom law and 
accounting standards. They are also responsible for the preparation 
of the other information contained in the annual report including the 
directors’ remuneration report. Our responsibility is to audit the financial 
statements and the part of the directors’ remuneration report described 
as having been audited in accordance with relevant United Kingdom legal 
and regulatory requirements and auditing standards.
We report to you our opinion as to whether the financial statements 
give a true and fair view and whether the financial statements and the 
part of the directors’ remuneration report described as having been 
audited have been properly prepared in accordance with the Companies 
Act 1985.  We also report to you if, in our opinion, the directors’ 
report is not consistent with the financial statements, if the Company 
has not kept proper accounting records, if we have not received all the 
information and explanations we require for our audit, or if information 
specified by law regarding directors’ remuneration and transactions with 
the Company and other members of the Group is not disclosed.
We review whether the corporate governance statement reflects the 
Company’s compliance with the nine provisions of the July 2003 FRC 
Combined Code specified for our review by the Listing Rules of the 
Financial Services Authority, and we report if it does not.  We are not 
required to consider whether the Board’s statements on internal control 
cover all risks and controls, or form an opinion on the effectiveness of 
the Group’s corporate governance procedures or its risk and control 
procedures.
We read the directors’ report and the other information contained in 
the annual report for the above year as described in the contents section 
including the unaudited part of the directors’ remuneration report and 
consider the implications for our report if we become aware of any 
apparent misstatements or material inconsistencies with the financial 
statements.
Basis of audit opinion
We conducted our audit in accordance with United Kingdom auditing 
standards issued by the Auditing Practices Board. An audit includes 
examination, on a test basis, of evidence relevant to the amounts and 
disclosures in the financial statements and the part of the directors’ 
remuneration report described as having been audited. It also includes 
an assessment of the significant estimates and judgements made by the 
directors in the preparation of the financial statements and of whether 
the accounting policies are appropriate to the circumstances of the 
Company and the Group, consistently applied and adequately disclosed.
We planned and performed our audit so as to obtain all the information 
and explanations which we considered necessary in order to provide us 
with sufficient evidence to give reasonable assurance that the financial 
statements and the part of the directors’ remuneration report described 
as having been audited are free from material misstatement, whether 
caused by fraud or other irregularity or error. In forming our opinion, we 
also evaluated the overall adequacy of the presentation of information 
in the financial statements and the part of the directors’ remuneration 
report described as having been audited.
Opinion
In our opinion: 
•  the financial statements give a true and fair view of the state of affairs 
of the Company and the Group as at 31 March 2005 and of the loss 
of the Group for the year then ended; and
•  the financial statements and part of the directors’ remuneration 
report described as having been audited have been properly 
prepared in accordance with the Companies Act 1985.
Deloitte & Touche LLP
Chartered Accountants and Registered Auditors
Birmingham
23 May 2005
24539 HS Report 2005_p ges 34-83_2 col.indd 51 1/6/05 5:06:25 pm Report & Accounts 2005 52
Consolidated Proﬁ t and Loss Account
For the year ended 31 March 2005
2005 2004
   Results Results Results
Goodwill     for the year Goodwill for the year Goodwill
will amortisation   before goodwill amortisation before goodwill amortisation
and    amortisation and amortisation and
exceptional Results for        and exceptional exceptional Results for and exceptional exceptional Results for
charges the year       charges charges the year charges charges the year
Note £’000 £’000 £’000  £’000 £’000 £’000 £’000 £’000 £’000
Group and share of joint ventures’ turnover 2 283,265 — 283,265  283,265 — 283,265 322,955 — 322,955
Less share of joint ventures’ turnover - continuing  2,375) — (2,375)  (2,375) — (2,375) (1,147) — (1,147)
Less share of joint ventures’ turnover - discontinued  ——  — — — (4,173) — (4,173)
280,890  280,890 — 280,890 317,635 — 317,635
Group turnover
Continuing operations  205,086 — 205,086  205,086 — 205,086 168,089 — 168,089
Acquisitions  15,625 — 15,625  15,625 — 15,625 — — —
220,711 — 220,711  220,711 — 220,711 168,089 — 168,089
Discontinued operations  60,179 — 60,179  60,179 — 60,179 149,546 — 149,546
2 280,890 — 280,890  280,890 — 280,890 317,635 — 317,635
Operating costs 4 236,693) (13,193) (249,886)  (236,693) (13,193) (249,886) (258,383) (9,615) (267,998)
Group operating profit
Continuing operations 1,802 (11,411) 30,391  41,802 (11,411) 30,391 32,641 (7,974) 24,667
Acquisitions  1 (697) (146)  551 (697) (146) — — —
2,353 (12,108) 30,245  42,353 (12,108) 30,245 32,641 (7,974) 24,667
Discontinued operations  1,844 (1,085) 759  1,844 (1,085) 759 26,611 (1,641) 24,970
44,197 (13,193) 31,004  44,197 (13,193) 31,004 59,252 (9,615) 49,637 
Share of joint ventures’ operating profit/(loss) - continuing  — 5  5 — 5 (257) — (257)
Share of joint ventures’ operating loss - discontinued  ——  — — — (307) — (307)
T otal operating profit including joint ventures  44,202 (13,193) 31,009  44,202 (13,193) 31,009 58,688 (9,615) 49,073 
Loss on disposal of subsidiary undertakings - discontinued 26 (39,149) (39,149)  — (39,149) (39,149) — — —
Cost of fundamental reorganisation - continuing 3 ——  — — — — (4,216) (4,216)
Net interest payable 7 83) — (483)  (483) — (483) (7,017) — (7,017)
Profit/(loss) on ordinary activities before taxation  43,719 (52,342) (8,623)  43,719 (52,342) (8,623) 51,671 (13,831) 37,840
T axation on profit/(loss) on ordinary activities 8 13,525) 836 (12,689)  (13,525) 836 (12,689) (15,243) — (15,243)
Profit/(loss) on ordinary activities after taxation   30,194 (51,506) (21,312)   30,194 (51,506) (21,312) 36,428 (13,831) 22,597
Equity minority interests    — — — — (4,162) 3,823 (339)
Profit/(loss) for the financial year  30,194 (51,506) (21,312)  30,194 (51,506) (21,312) 32,266 (10,008) 22,258
Dividends paid and proposed 9 10,033) — (10,033)  (10,033) — (10,033) (12,733) — (12,733) 
Dividend in specie 26 28,522) — (28,522)  (28,522) — (28,522) — — —
Retained (loss)/profit for the year  (8,361) (51,506) (59,867)  (8,361) (51,506) (59,867) 19,533 (10,008) 9,525
(Loss)/earnings per share
Basic 10   (34.3p)   35.2p
Basic before goodwill and exceptional charges 10   48.7p 48.7p 51.0p
Diluted 10   (34.3p)   34.9p
Diluted before goodwill and exceptional charges 10 47.7p 47.7p   50.6p
24539 HS Report 2005_p ges 34-83_2 col.indd 52 1/6/05 5:06:25 pm Homeserve plc 53
Consolidated Balance Sheet
As at 31 March 2005
2005 2004
Note   £’000 £’000
Fixed assets
Goodwill  11   154,008 108,223
Tangible assets  12   22,613 186,242
176,621 294,465
Current assets
Stocks  16   1,985 6,887
Debtors  17   88,556 90,221
Cash at bank and in hand     14,753 10,497
105,294 107,605
Creditors – amounts falling due within one year  
   Borrowings   18   (3,537) (11,355)
   Other creditors  19   (97,628) (120,909)
 (101,165) (132,264)
Net current assets/(liabilities)     4,129 (24,659)
T otal assets less current liabilities     180,750 269,806
Creditors – amounts falling due after more than one year 
  Borrowings   18   — (92,649)
  Other creditors  19   (4,421) (4,138)
 (4,421) (96,787)
Provisions for liabilities and charges  21   (939) (10,301)
Accruals and deferred income  23   (15,109) (19,552)
Net assets     160,281 143,166
Capital and reserves
   Share capital  24   7,987 6,366
   Share premium  24   26,576 18,902
   Merger reserve  25   70,992 —
    Capital redemption reserve     1,200 1,200
   Own shares  25   (8,447) —
    Profit and loss account  25   61,973 110,532
Equity shareholders’ funds     160,281 137,000
Minority shareholders’ equity interests     — 6,166
 160,281 143,166
The accompanying notes are an integral part of these accounts.
The accounts were approved by the Board of directors on 23 May 2005.
Brian Whitty
Andrew Belk
24539 HS Report 2005_p ges 34-83_2 col.indd 53 1/6/05 5:06:25 pm Report & Accounts 2005 54
Company Balance Sheet
As at 31 March 2005
2005 2004
Note £’000 £’000
Fixed assets 
Investments  15   18,476 34,003
Current assets
Debtors  17   119,104 121,406
Creditors – amounts falling due within one year   
Borrowings  18   (52,085) (40,063)
Other creditors  19   (14,824) (16,184)
(66,909) (56,247)
Net current assets     52,195 65,159
T otal assets less current liabilities   70,671 99,162
Net assets     70,671 99,162
Capital and reserves
 Ordinary share capital  24   7,987 6,366
 Share premium  24   26,576 18,902
 Capital redemption reserve     1,200 1,200
 Own shares  25   (8,447) —
 Profit and loss account  25   43,355 72,694
Equity shareholders’ funds     70,671 99,162
The accompanying notes are an integral part of these accounts.
The accounts were approved by the Board of directors on 23 May 2005.
Brian Whitty
Andrew Belk
24539 HS Report 2005_p ges 34-83_2 col.indd 54 1/6/05 5:06:26 pm Homeserve plc 55
Supplementary Statements
For the year ended 31 March 2005
Consolidated Statement of Total Recognised Gains and Losses
2005 2004
Note    £’000 £’000
(Loss)/profit for the financial year      (21,312) 22,258
T otal recognised gains and losses relating to the year      (21,312) 22,258
Reconciliation of Movements in Consolidated Shareholders’ Funds
(Loss)/profit for the financial year      (21,312) 22,258
Dividends      (38,555) (12,733)
(59,867) 9,525
Goodwill previously written off included in   
    retained loss for the year  26    11,409 —
Investment in own shares  25    (8,447) —
Merger reserve  25    70,992 —
New share capital subscribed  24    9,194 1,834
Net additions to shareholders’ funds      23,281 11,359
Opening shareholders’ funds      137,000 125,641
Closing shareholders’ funds      160,281 137,000
The accompanying notes are an integral part of these accounts.
24539 HS Report 2005_p ges 34-83_2 col.indd 55 1/6/05 5:06:26 pm Report & Accounts 2005 56
Consolidated Cash Flow Statement
For the year ended 31 March 2005
     2005  2004
Note  £’000 £’000 £’000 £’000
Net cash inflow from operating activities  (a)   43,408  77,854
Returns on investments and servicing of finance:    
Interest received    536  345
Interest paid    (898)  (4,401)
Interest element of finance lease and hire-purchase     
   rental payments    (97)  (393)
Dividends paid to minority interests    (1,632)  (1,714) 
Net cash outflow from returns on investments   
  and servicing of finance     (2,091)  (6,163)
Taxation:    
Corporation tax paid     (10,996)  (12,171)
Capital expenditure and financial investment:
Purchase of tangible fixed assets    (9,331)  (38,195)
Loan to joint ventures    —  (492)
Sale of tangible fixed assets    458  1,341
Capital contributions received    —  4,782
Net cash outflow from capital expenditure 
  and financial investment     (8,873)  (32,564)
Acquisitions and disposals:    
Investment in subsidiary undertakings    (20,384)  (4,442)
Increase in investment in joint ventures    (864)  —
Net cash acquired with subsidiary undertakings    995  —
Disposal of subsidiary undertakings    21,958  —
Net cash disposed with subsidiary undertakings    (2,927)  —
Net cash outflow from acquisitions and disposals     (1,222)  (4,442)
Equity dividends paid     (7,686)  (11,683)
Financing:
Issue of ordinary share capital    7,744  1,834 
Purchase of own shares    (8,447)  —
Repayment of loan notes    (1,180)  (931)
Capital element of finance lease and hire-purchase     
   rental payments    (1,319)  (1,419) 
Net cash outflow from financing     (3,202)  (516)
Increase in cash     9,338  10,315
The accompanying notes are an integral part of these accounts.
24539 HS Report 2005_p ges 34-83_2 col.indd 56 1/6/05 5:06:26 pm Homeserve plc 57
Notes to the Cash Flow Statement
For the year ended 31 March 2005
(a) Reconciliation of Operating Profit to Net Cash Inflow from Operating Activities 
2005  2004
£’000 £’000 £’000 £’000
T otal operating profit: Group and share of joint ventures     31,009  49,073
Amortisation of goodwill     10,406  7,215
  41,415  56,288
Exceptional costs - bad debt charge    2,787  —
Exceptional costs - demerger of South Staffordshire businesses   (3,186)  (1,030)
Exceptional costs - UITF 17 charge    —  2,400
Depreciation and amortisation (non-infrastructure assets)    6,893  12,743
Depreciation and amortisation (infrastructure assets)    —  5,485
Loss/(profit) on disposal of assets    384  (547)
6,878  19,051
Share of operating (profit)/loss in joint ventures     (5)  564
Increase in stocks    (796)  (784)
Increase in debtors    (17,827)  (12,494)
Increase in creditors    13,743  15,229
(4,880)  1,951
Net cash inflow from operating activities     43,408  77,854
(b) Reconciliation of Movement in Net Funds/(Debt)
2005  2004
£’000  £’000
Increase/(reduction) in cash      4,256  (295)
Decrease in bank overdraft     5,082  10,610
9,338  10,315
Demerged companies     92,757  —
Disposed companies     605  —
Debt repayments     2,499  2,350
Assets purchased under finance leases     (476)  (527)
Index-linked bond     —  (2,524)
Decrease in net debt in year     104,723  9,614
Net debt brought forward     (93,507)  (103,121)
Net funds/(debt) carried forward     11,216  (93,507)
24539 HS Report 2005_p ges 34-83_2 col.indd 57 1/6/05 5:06:26 pm Report & Accounts 2005 58
(c) Analysis of Net (Debt)/Funds
   Balance at  Acquisitions Other Balance at
   1 April  and non cash  31 March
2004 Cash flow disposals changes 2005
£’000 £’000 £’000 £’000 £’000
Cash at bank and in hand and bank overdraft   2,218 9,338 — — 11,556
Irredeemable debenture stock   (1,633) — — 1,633 —
Index-linked bond   (87,941) — — 87,941 —
Obligations under finance leases and
  hire-purchase contracts   (4,661) 1,319 605 2,707 (30)
Loan notes   (1,490) 1,180 — — (310)
Net (debt)/funds   (93,507) 11,837 605 92,281 11,216
Other non cash changes principally result from the demerger of the Water Suppy operation on 6 April 2004.
(d) Analysis of Cash Flows
A summarised consolidated cash flow statement analysed between continuing and discontinued operations is shown below:
2005 2004
Continuing Discontinued Continuing Discontinued
Operations Operations T otal Operations Operations T otal
£’000 £’000 £’000 £’000 £’000 £’000
Net cash inflow from:  
Operating activities  42,923 485 43,408 35,737 42,117 77,854
Returns on investment and    
  servicing of finance  (1,579) (512) (2,091) (1,462) (4,701) (6,163)
T axation   (10,247) (749) (10,996) (8,511) (3,660) (12,171)
Capital expenditure and    
  financial investment  (7,789) (1,084) (8,873) (3,860) (28,704) (32,564)
Acquisitions and disposals  (1,222) — (1,222) (4,442) — (4,442)
Equity dividends paid  (7,686) — (7,686) (11,683) — (11,683)
Financing  (2,121) (1,081) (3,202) (580) 64 (516)
Increase/(decrease) in cash  12,279 (2,941) 9,338 5,199 5,116 10,315
Notes to the Cash Flow Statement
For the year ended 31 March 2005
24539 HS Report 2005_p ges 34-83_2 col.indd 58 1/6/05 5:06:27 pm Homeserve plc 59
Notes to the Accounts
1 Statement of Accounting Policies
The principal accounting policies are summarised below.They have 
all been applied consistently throughout the year and the preceding 
year with the exception of the policy for the accounting for the 
ESOP trust which is explained in note 15.
(a) Basis of Accounting
The accounts have been prepared under the historical cost 
convention and in accordance with the requirements of the London 
Stock Exchange and applicable accounting standards.
(b) Basis of Consolidation
The Group accounts consolidate the accounts of the Company 
and its subsidiary undertakings made up to 31 March each year. 
The results of subsidiaries acquired or sold are consolidated for the 
periods from or to the date on which control passed. The Group 
makes full provision for the minority interests’ share of net liabilities 
in subsidiary undertakings. Acquisitions are accounted for under the 
acquisition method.
(c) Joint Ventures
The Group’s share of turnover and profit or loss of joint ventures 
is included in the consolidated profit and loss account. The Group’s 
share of their net assets or liabilities is included in the consolidated 
balance sheet.
(d) Turnover and profit recognition
Turnover in respect of the Policy Membership businesses include 
amounts receivable from the sale of policies, stated net of 
underwriting, commissions payable and Insurance Premium Tax.  
Turnover is recognised on sale of the policy except where an 
obligation exists to provide future services where an appropriate 
proportion of monies received in advance are treated as deferred 
income and recognised over the relevant period. Member acquisition 
costs are recognised in full on sale of the policy.
 Turnover in the Emergency Repair and Commercial Outsourcing 
businesses represents amounts receivable, excluding VAT, from the 
sale of goods and services.
Regulated Water turnover includes amounts billed together with an 
estimation of amounts unbilled at the year end.
(e) Goodwill
Goodwill arising on acquisitions, represents the excess of the fair 
value of the consideration given over the fair value of the identifiable 
assets and liabilities acquired. From the year ended 31 March 1999 
goodwill has been capitalised on the balance sheet and amortised 
over its estimated useful life of up to 20 years. Prior to this period 
goodwill was written off to reserves in accordance with the 
accounting standard then in force. This has been charged to the 
profit and loss account in the event of the disposal of the relevant 
business.
(f ) Tangible Fixed Assets and Depreciation    
Tangible fixed assets comprise infrastructure assets, operational 
structures and other assets.
 Infrastructure Assets
 Infrastructure assets comprise a network of systems that, as a 
whole, is intended to be maintained in perpetuity at a specified 
level of service by the continuing replacement and refurbishment 
of its components. Expenditure on infrastructure assets relating 
to increases in capacity or enhancements of the networks and on 
maintaining the operating capability of the network in accordance 
with defined standards of service are treated as additions which are 
included at cost. 
 The depreciation charge for infrastructure assets is the level of 
annual expenditure required to maintain the operating capability 
of the network which is based on the Company’s independently 
certified asset management plan.
 Operational Structures and Other Assets
 Operational structures and other assets are stated at cost less 
accumulated depreciation and any provision for impairment. 
Depreciation is provided on a straight line basis to write off the 
cost less estimated residual value over the estimated useful lives of 
the assets, with the exception of land which is not depreciated. The 
estimated useful lives of assets are as follows:
  Buildings and Service Reservoirs 50 - 80 years
  Fixed Plant 20 - 30 years
  Meters 15 years
  Mobile Plant 5 years
  Motor Vehicles 3 - 7 years
  Office Equipment 5 - 7 years 
  Envelope and Mailing Equipment 7 - 10 years
24539 HS Report 2005_p ges 34-83_2 col.indd 59 1/6/05 5:06:27 pm Report & Accounts 2005 60
Notes to the Accounts
(g) Capital Contributions
Capital contributions, which arise in the regulated water business, are 
treated as deferred income and amortised over the estimated useful 
lives of the assets concerned, except in the case of contributions 
towards the cost of infrastructure assets. This departure from the 
requirements of the Companies Act 1985 is, in the opinion of the 
Directors, necessary for the financial statements to show a true and 
fair view as it is not possible to amortise contributions to the profit 
and loss account over the lives of the fixed assets concerned, as 
infrastructure assets do not have determinable finite lives.
(h) Leased Assets
Assets financed by leasing and hire-purchase arrangements which 
transfer substantially all the risks and rewards of ownership to the 
Group are included in tangible fixed assets, and the net obligation to 
pay future rentals is included in creditors. Rentals are apportioned 
between finance charges and a reduction of the outstanding liability 
for future rentals so as to produce a constant charge to the profit 
and loss account based upon the capital outstanding. Operating lease 
rentals are charged to the profit and loss account on a straight line 
basis.
(i) Investments
Investments held as fixed assets are stated at cost less amounts 
written off and any provision for impairment. 
(j) Stocks
Stocks are valued at the lower of cost and net realisable value. Cost 
includes an appropriate element of overheads. Provision is made for 
obsolete, slow moving or defective items where appropriate.
(k) Pensions
For the defined benefit scheme the cost of pension  
contributions is charged to the profit and loss account on a 
systematic basis over the average service lives of the employees, in 
accordance with the advice of an independent actuary. For defined 
contribution schemes the amount charged to the profit and loss 
account is the contributions payable in the year.
(l) Research and Development
Research and development expenditure is charged to the profit and 
loss account in the year in which it is incurred.
(m) Taxation
Corporation tax payable is provided on taxable profits at the current 
rate. Deferred tax is provided in respect of capital allowances in 
excess of depreciation and all other timing differences that have 
originated but not reversed at the balance sheet date using the 
current rate of tax. The liability is discounted, using the yield to 
maturity on government gilts, to reflect the time value of money over 
the period between the balance sheet date and the date on which 
the timing differences are expected to reverse.
(n) Index-linked bond
The index-linked bond is carried in the balance sheet at an amount 
equal to the sum of the proceeds received on issue and indexation 
to date, less issue costs. The premium/discount and costs of issue 
are amortised over the life of the bond and included in net interest 
payable in the profit and loss account, together with interest paid for 
the period and indexation.
24539 HS Report 2005_p ges 34-83_2 col.indd 60 1/6/05 5:06:27 pm Homeserve plc 61
2 Segmental Information
Turnover
2005 2004
Continuing  Discontinued  Continuing Discontinued  
 Operations  Acquisitions Operations T otal Operations  Operations T otal
£’000 £’000 £’000 £’000 £’000 £’000 £’000
Homeserve domestic 
    - Policy Membership 129,794 778 — 130,572 100,337 —  100,337 
    - Emergency Repair 85,396 14,847 — 100,243 73,079 — 73,079
Inter-division (7,729) — — (7,729) (4,180) — (4,180)
207,461 15,625 — 223,086 169,236 — 169,236
Commercial Outsourcing — — 59,537 59,537 —  111,666 111,666
Inter-division — — (494) (494) — (18,374)  (18,374)
— — 59,043 59,043 — 93,292 93,292
Regulated water supply — — 1,136 1,136 — 60,427 60,427
T otal turnover 207,461 15,625 60,179 283,265 169,236 153,719 322,955
Share of joint ventures
    - Policy Membership (2,375) — — (2,375) (1,147) — (1,147)
    - Commercial Outsourcing — — — — — (4,173) (4,173)
Group turnover 205,086 15,625 60,179 280,890 168,089 149,546 317,635
Proﬁ t Before Tax
2005 2004
Continuing  Discontinued  Continuing Discontinued  
Operations  Acquisitions Operations T otal Operations  Operations T otal
£’000 £’000 £’000 £’000 £’000 £’000 £’000
Homeserve domestic 
    - Policy Membership 37,146 363 — 37,509 29,701  — 29,701
    - Emergency Repair 4,661 188 — 4,849 2,683 — 2,683
41,807 551 — 42,358 32,384 — 32,384
Commercial Outsourcing — — 1,683 1,683 — 9,282 9,282
Regulated water supply — — 161 161 — 17,022 17,022
41,807 551 1,844 44,202 32,384 26,304 58,688
Amortisation of goodwill (8,624) (697) (1,085) (10,406) (5,574) (1,641) (7,215)
Exceptional operating costs (2,787) — — (2,787) (2,400) — (2,400)
T otal operating profit 30,396 (146) 759 31,009 24,410 24,663 49,073
Net interest payable (342) (1) (140) (483) 113 (7,130) (7,017)
Loss on disposal of subsidiaries — — (39,149) (39,149) — — —
Cost of fundamental reorganisation — — — — (4,216) — (4,216)
Profit/(loss) before tax 30,054 (147) (38,530) (8,623) 20,307 17,533 37,840
Within Homeserve domestic - Policy Membership, acquisitions include the results of Principal Choice (turnover £778,000 and operating profit £363,000).
Within Homeserve domestic - Emergency Repair, acquisitions include Disaster Restoration Limited (turnover £1,990,000 and operating profit £72,000) 
and Sergon BRM Limited (turnover £12,857,000 and operating profit £116,000).
In 2005 the exceptional costs of £2,787,000 are in respect of a provision for bad and doubtful debts and relate to the Homeserve domestic - Policy 
Membership business.
The 2004 exceptional costs of £2,400,000, as described in note 3, relate to Homeserve domestic - Policy Membership business.
24539 HS Report 2005_p ges 34-83_2 col.indd 61 1/6/05 5:06:27 pm Report & Accounts 2005 62
Notes to the Accounts
Net Operating Assets
2005 2004
£’000 £’000
Homeserve domestic       
    - Policy Membership      (919) 1,868
    - Emergency Repair      9,424 10,603
Holding companies/Commercial Outsourcing      8,667 23,008
Support services      17,172 35,479
Regulated water supply      — 132,792
 17,172 168,271
Net funds/(debt)      11,216 (93,507)
Deferred consideration      (5,309) (10,000)
Goodwill      154,008 108,223
Proposed dividend      (6,830) (10,506)
Corporation tax      (9,037) (9,014)
Provisions for liabilities and charges      (939) (10,301)
Net assets      160,281 143,166
Substantially all turnover, operating profit and net operating assets arise in the United Kingdom.
3 Demerger of South Staffordshire Plc and Related Transactions
On 6 April 2004 the following transactions were effected:
(i) South Staffordshire Water PLC and a number of related businesses were demerged from the continuing group by way of a dividend in specie.
(ii) The share capital of the Company was consolidated, with existing shareholders entitled to receive four shares in the continuing group for every five 
shares previously held.
(iii) The Company acquired the 24.98 per cent. minority shareholding in the Homeserve domestic division in a share for share exchange resulting in the 
issue of 11,600,000 new shares in the Company.
The results of the demerged businesses have been reported within discontinued operations for the year ended 31 March 2005 and the previous year. The 
amounts presented for discontinued operations take account of certain consolidation eliminations and adjustments which are necessary to fully reflect the 
results of the discontinued operations within Homeserve plc.
The total costs of completing these transactions amounted to £4,216,000 and were accrued in full at 31 March 2004 and were included in the profit and 
loss account as exceptional costs as they relate to a fundamental reorganisation of the activities of the Group. No corporation tax relief on these costs has 
been assumed as the amount of any such deduction is currently uncertain. These exceptional costs had no impact on the minority interest charge.
In addition to the exceptional transaction costs described above, an exceptional operating cost of £2,400,000 was incurred as a consequence of the 
decision to acquire the minority interest in the Homeserve domestic division. The fair value of shares issued by the Company in 2001 in respect of a 
previous transaction in Homeserve was being amortised, in accordance with UITF 17, over a five year period ending on 31 March 2006. The exceptional 
charge represents the write-off of the unamortised balance at 31 March 2004. This exceptional charge is mirrored by an exceptional credit to the minority 
interest charge of £2,400,000 in connection with the same transaction. The result of these two exceptional items is that there is no net impact on 
reported profit for the financial year or earnings per share.
24539 HS Report 2005_p ges 34-83_2 col.indd 62 1/6/05 5:06:28 pm Homeserve plc 63
4 Operating Costs
2005 2004
Continuing Discontinued  Continuing Discontinued 
Operations  Operations T otal Operations Operations T otal
£’000 £’000 £’000 £’000 £’000 £’000
Other operating income  — — — — (436) (436)
Raw materials and consumables  28,238 20,144 48,382 19,776 30,922 50,698
Staff costs (note 5)  63,421 23,822 87,243 53,476 45,083 98,559
Depreciation (infrastructure assets)  — — — — 5,485 5,485
Depreciation (non-infrastructure assets)  4,739 2,154 6,893 3,184 9,818 13,002
Amortisation of goodwill  9,321 1,085 10,406 5,574 1,641 7,215
Other operating costs  84,747 12,215 96,962 61,412 32,063 93,475
 190,466 59,420 249,886 143,422 124,576 267,998
Other operating costs for 2005 include exceptional costs of £2,787,000 within continuing operations as described in note 2.
Other operating costs for 2004 include exceptional costs of £2,400,000 within continuing operations as described in note 3.
Other operating costs include £4,013,000 (2004: £4,497,000) in respect of operating lease rentals which relate principally to land and buildings and motor 
vehicles.
Operating costs in respect of the major acquisitions include:
     Principal Disaster Sergon
     Choice Restoration BRM
      Ltd Ltd T otal
  £’000 £’000 £’000 £’000
Raw materials and consumables    148 1,681 25 1,854
Manpower costs    214 151 676 1,041
Depreciation    — 23 40 63
Other operating costs    53 63 12,000 12,116
     415 1,918 12,741 15,074
Auditors' remuneration comprised:
2005 2004
£’000 £’000
Audit services:
Statutory audit      135 190 
Audit related regulatory reporting      10 88
Further assurance services:
Advice on accounting matters      27 —
Reporting accountant      — 432
Tax services:
Compliance      35 62
Advisory      129 165
 336 937
Included within further assurance services and tax advisory services are amounts of £nil (2004: £582,000) in respect of the demerger and related 
transactions.
The audit fee relating to the Company is £14,000 (2004: £12,000).
24539 HS Report 2005_p ges 34-83_2 col.indd 63 1/6/05 5:06:28 pm Report & Accounts 2005 64
Notes to the Accounts
5 Staff Costs
       2005 2004
£’000 £’000
Wages and salaries      77,362 86,831
Social security costs      8,208 8,863
Pension costs      1,673 2,865
87,243 98,559
Average number of employees
2005 2004
Continuing  Discontinued  Continuing Discontinued 
Operations  Acquisitions Operations T otal Operations Operations T otal
Homeserve domestic     
    - Policy Membership 1,054 — — 1,054 713  — 713
    - Emergency Repair  1,758 24 — 1,782 1,609 — 1,609
Commercial Outsourcing — — 890 890 — 1,269 1,269
Support services 2,812 24 890 3,726 2,322 1,269  3,591
Regulated water supply —  — — — — 337 337
2,812 24 890 3,726 2,322 1,606 3,928
6 Directors’ Emoluments
2005 2004
£’000 £’000
Emoluments       2,255 1,523
Contributions to money purchase pension schemes      379 252
Value of shares vested under restricted share plan      — 171
Gain on exercise of SAYE options      — 13
The emoluments of the directors are analysed in the Remuneration Report. There were three directors accruing benefits under defined benefit schemes 
and five directors accruing benefits under money purchase schemes (2004: five and five respectively).
The highest paid director received emoluments of £601,000 (2004: £408,000). He is a member of a defined benefit pension scheme which provided for 
accrued pension of £12,400 (2004: £10,800) and accrued lump sum of £37,100 (2004: £32,300) at 31 March 2005. In addition, the cost of providing 
benefits under the South Staffordshire Group Funded Unapproved Retirement Benefit Scheme on his behalf was £283,000 (2004: £162,000).
7 Net Interest Payable
2005 2004
Continuing Discontinued  Continuing Discontinued
Operations  Operations T otal Operations Operations T otal
£’000 £’000 £’000 £’000 £’000 £’000
Interest payable and similar charges:
Index-linked bond  — — — — 5,843 5,843
Bank overdraft and other interest  852 48 900 197 829 1,026
Finance charges in respect of finance leases  
  and hire-purchase contracts  5 92 97 — 393 393
Debentures  — — — — 67 67
Share of joint venture interest payable/(receivable)  22 — 22 34 (1) 33
879 140 1,019 231 7,131 7,362
Interest receivable on short-term deposits  (536) — (536) (344) (1) (345)
343 140 483 (113) 7,130 7,017
Bank overdrafts, cash deposits and other debt instruments are held within the individual subsidiary or other undertakings to which they relate and have 
been analysed between continuing, acquisitions and discontinued operations accordingly.
24539 HS Report 2005_p ges 34-83_2 col.indd 64 1/6/05 5:06:28 pm Homeserve plc 65
8 Taxation
2005 2004
Continuing  Discontinued  Continuing Discontinued
Operations  Acquisitions  Operations T otal Operations Operations T otal
£’000 £’000 £’000 £’000 £’000 £’000 £’000
UK corporation tax  12,474 46 512 13,032 10,244 3,915 14,159
Adjustment in respect of prior years 137 — — 137 (116) 221 105
12,611 46 512 13,169 10,128 4,136 14,264
Deferred tax        
Origination and reversal of timing differences (418) (6) (65) (489) (2) 1,565 1,563
Increase in discount 133 — — 133 — (266) (266)
Adjustment in respect of prior years (179) — 55 (124) — (318) (318)
(464) (6) (10) (480) (2) 981 979
12,147 40 502 12,689 10,126 5,117 15,243
The analysis of the tax charge between continuing, acquisitions and discontinued operations is based on tax computations prepared for each entity.
The principal differences between the total current tax shown above and the amount calculated by applying the standard rate of corporation tax are as follows:
2005 2004
£’000 £’000
Tax on (loss)/profit at standard rate of corporation tax      (2,587) 11,352
Exceptional costs not deductible for tax purposes      11,745 1,248
Goodwill not deductible for tax purposes      2,966 2,119
Overseas losses not deductible for tax purposes      270 112
Other expenses not deductible for tax purposes      149 690
Depreciation in excess of capital allowances/(capital allowances in excess of depreciation)    489 (1,362)
Adjustments in respect of prior years      137 105
Current corporation tax charge for the year      13,169 14,264
9 Dividends Paid and Proposed  
       2005 2004
£’000 £’000
Equity interests 
Interim dividend paid of 5.1p (2004: 6.1p) per share      3,203 3,859
Proposed dividend of 10.9p (2004: 13.9p) per share      6,830 8,874
 10,033 12,733
A nominal dividend of 0.01 pence per share is proposed in respect of 1,191,314 shares held by the Homeserve Employee Trust in accordance with a 
Deed of  Waiver dated 31 December 1992.
Due to the demerger, £4.5m of the final dividend in 2004 was paid by Homeserve plc and £4.4m by South Staffordshire Plc to shareholders on their 
respective registers. As a result of the post year end share consolidation at Homeserve plc and share split at South Staffordshire Plc, the amounts payable 
were 8.8p per Homeserve share and 34.4p per South Staffordshire share held. These combined payments are equivalent to 13.9p per share in the 
Company in issue on 31 March 2004. 
10 Earnings per Share
The calculation of earnings per share is based on profit after tax and minority interests divided by the weighted average number of shares in issue during 
the financial period. Diluted earnings per share takes into account the dilution effect of the full exercise of all share options granted by the Company by 
comparing the difference between the weighted average exercise price of exercisable share options with the average share price over the period.
The underlying adjusted earnings per share has been calculated by excluding the amortisation of goodwill and exceptional costs. This is considered to be 
a better indicator of the underlying performance by the Company.
24539 HS Report 2005_p ges 34-83_2 col.indd 65 1/6/05 5:06:29 pm Report & Accounts 2005 66
Notes to the Accounts
The calculations of earnings per share are based on the following profits and numbers of shares:
2005 2004
Continuing 
Operations
including  Continuing 
acquisitions  T otal Operations T otal
£’000 £’000 £’000 £’000
Profit/(loss) for the financial year    17,720 (21,312) 9,842 22,258
Amortisation of goodwill     
  - total    9,321 10,406 5,574 7,215
  - relating to minority shareholders    — — (1,423) (1,423)
Loss on disposal of subsidiary undertakings    —  39,149 — —
Exceptional cost - bad debt charge    2,787 2,787 — — 
Exceptional UITF 17 charge    — — 2,400 2,400 
Fundamental reorganisation    — — 4,216 4,216
Exceptional credit - minority interest    — — (2,400) (2,400)
Tax impact arising on exceptional items    (836) (836) — —
Profit for adjusted earnings per share    28,992 30,194 18,209 32,266
Weighted average number of shares
2005 2004
Adjusted Statutory Adjusted Statutory
earnings earnings earnings earnings 
per share  per share per share per share
For basic and adjusted earnings per share    62,061,890 62,061,890 63,208,359 63,208,359
Exercise of share options    — 1,175,536 523,564 523,564
For diluted earnings per share    62,061,890 63,237,426 63,731,923 63,731,923
In the current year, the exercise of share options is non-dilutive for statutory purposes.
11 Goodwill
        Group
£’000
Cost       
At 1 April 2004       124,377
Adjustments       1,020
Additions       81,656
Disposals       (32,840)
At 31 March 2005       174,213
Amortisation
At 1 April 2004       16,154
Charge for the year       10,406
Disposals       (6,355)
At 31 March 2005       20,205
Net Book Value       
At 31 March 2005       154,008
At 31 March 2004       108,223
At 31 March 2005 the cumulative amount of goodwill written off directly to reserves amounted to £nil (2004: £11,409,000).
Adjustments relate to the additional deferred consideration payable on the acquisition of Homeserve Emergency Services Ltd in 2002.
Additions to goodwill relate to the acquisitions in the year of £81,349,000 identified in note 26 and the purchase of a franchise at Homeserve 
Emergency Services Ltd amounting to £307,000.
24539 HS Report 2005_p ges 34-83_2 col.indd 66 1/6/05 5:06:29 pm Homeserve plc 67
12 Tangible Fixed Assets
   Infra-   Mobile
   Land and structure  Operational Fixed Plant & 
   Buildings  Assets Structures Plant Equipment T otal
£’000 £’000 £’000 £’000 £’000 £’000
Cost  
At 1 April 2004  30,839 114,531 26,877 66,553 92,729 331,529
Additions  1,648 — — — 8,159 9,807
Acquisition of subsidiary undertakings  23 — — — 244 267
Disposal of subsidiary undertakings  (3,545) — — — (24,419) (27,964)
Demerger  (17,230) (114,531) (26,877) (66,553) (46,430) (271,621)
Disposals  (134) — — — (3,169) (3,303)
At 31 March 2005  11,601  — — — 27,114 38,715
Depreciation  
At 1 April 2004  4,193 65,006 4,844 24,639 46,605 145,287
Charge for the year  624 — — — 6,269 6,893
Disposal of subsidiary undertakings  (717) — — — (15,994) (16,711)
Demerger  (2,704) (65,006) (4,844) (24,639) (20,214) (117,407)
Disposals  (40)  — — — (2,421) (2,461)
Provision for loss on disposal of fixed assets  — — — — 501 501
At 31 March 2005  1,356 — — — 14,746 16,102
Net Book Value
At 31 March 2005
 Owned  9,860 — — — 12,341 22,201
 Leased  385 — — — 27 412
   10,245 — — — 12,368 22,613
At 31 March 2004
 Owned  26,646 45,298 21,622 38,997 44,255 176,818
 Leased  — 4,227 411 2,917 1,869 9,424
   26,646 49,525 22,033 41,914 46,124 186,242
Infrastructure renewals expenditure and the charge to the profit and loss account are included within infrastructure assets cost and accumulated 
depreciation. The net book value of infrastructure assets is stated net of capital contributions. The balance of capital contributions at 31 March and 
movements in the year are set out in note 14 below. 
Tangible fixed assets financed by leasing and hire-purchase amounted to £989,000 (2004: £14,816,000) less accumulated depreciation of £577,000 (2004: 
£5,392,000). Depreciation charged to the profit and loss account for the year in respect of leased assets amounted to £11,000 (2004: £1,269,000). 
Tangible fixed assets include freehold land of £618,000 (2004: £2,085,000) which is not subject to depreciation.
13 Capital Commitments
Capital commitments outstanding at 31 March 2005 were £4,113,000 (2004: £3,728,000). 
24539 HS Report 2005_p ges 34-83_2 col.indd 67 1/6/05 5:06:29 pm Report & Accounts 2005 68
Notes to the Accounts
14 Capital Contributions 
       Group
Infrastructure Other
      Assets Assets
£’000 £’000
Balance at 1 April 2004      56,282 4,554
Demerger      (56,282) (4,554)
Balance at 31 March 2005      — —
Capital contributions in respect of other assets are included in accruals and deferred income (note 23).
15 Investments
            Company
     Shares in Loans to  
     subsidiary  subsidiary  T otal 
     undertakings undertakings  (Restated)
  £’000 £’000  £’000
Cost and net book value
At 1 April 2004     24,003 10,000 34,003
Additions     2,114 — 2,114
Disposals     (17,641) — (17,641)
At 31 March 2005     8,476 10,000 18,476
The additions in the year relate to the purchase of the minority interest in Homeserve Assistance Ltd. The disposals relate to the demerger of the Water 
Supply operation.
Following the adoption of UITF 38 - Accounting for ESOP trusts, the Company’s investment in its own shares is now reported as a reduction in 
shareholders’ funds. As the net book value of such shares at 31 March 2004 was £nil, no restatement of the balance sheet is required. In addition, there 
was no impact on the consolidated profit and loss account or consolidated cash flow statement.
During the year, the Company purchased 1,188,000 shares for cash consideration of £7,973,000 through the Homeserve Employee Trust and 70,411 
shares for cash consideration of £474,000 for the Share Incentive Plan.
At 31 March 2005 the Trust held 1,191,314 shares in the Company (2004: 4,143; 3,314 after the share consolidation) 814 of which were unallocated. The 
market value of the shares at 31 March 2005 was £10,632,477 (2004: £25,977). As stated in note 9, dividends have been waived by the Trust. Any costs 
of administration are included in the profit and loss account as they accrue. 
24539 HS Report 2005_p ges 34-83_2 col.indd 68 1/6/05 5:06:30 pm Homeserve plc 69
The Company’s principal subsidiary undertakings and joint ventures, all of which have only ordinary shares in issue, except Homeserve Emergency 
Services Ltd which has preference shares in issue, are as follows:
Proportion of Shares Held Nature of Business
  Direct  Indirect
Intermediate Holding Companies
 Homeserve Enterprises Ltd 100%  Intermediate holding company
 Homeserve Assistance Ltd 25% 75% Intermediate holding company
 Homeserve Retail Warranties Ltd (formerly Regency Financial Holdings Ltd)  100% Intermediate holding company
Policy Membership
 Homeserve GB Ltd (formerly Home Service (GB) Ltd)  100% Plumbing, heating and electrical home assistance
 Homeserve Warranties Ltd (formerly Regency Warranties Ltd)  100% Furniture warranties & repairs 
 Domeo S.A.  49% Plumbing home assistance joint venture 
   registered in France
 Home Service USA Corp  100% Plumbing home assistance registered in USA
 Home Service Direct Pty Ltd  100% Plumbing home assistance registered in Australia
 Affinity Partners Ltd  100% Insurance captive registered in Guernsey
Emergency Repair
 Homeserve Claims Management Ltd (formerly Home Hotline Ltd)  100% Claims handling
 Homeserve Emergency Services Ltd (formerly Highway Emergency Services Ltd)  100% Emergency glazing, door repair, plumbing and drains
 Homeserve at Home Ltd (formerly Regency at Home Ltd)  100% Furniture repairs
 Homeserve Servowarm Ltd (formerly Servowarm Ltd)  100% Warranties service and repair for domestic boilers
 Homeserve Sergon Ltd (formerly Sergon BRM Ltd)  100% Building repair and maintenance
Name changes were effective on 18 April 2005.
16 Stocks 
           Group
2005 2004
£’000  £’000
Stores and raw materials         123 4,498
Work in progress         662 1,904
Finished goods         1,200 485
 1,985 6,887
17 Debtors
Group Company   
2005 2004 2005 2004
£’000  £’000 £’000  £’000
Amounts recoverable within one year  
Trade debtors       54,017 62,802 1,292 —
Other debtors       31,256 21,174 207 113
Amounts owed by joint ventures - loans       652 629 — — 
Amounts owed by Group undertakings       — — 117,268 121,223
Prepayments and accrued income   2,626 5,470 337 70
88,551 90,075 119,104 121,406
Amounts recoverable after more than one year    
Other debtors       5 146 — —
88,556 90,221 119,104 121,406
24539 HS Report 2005_p ges 34-83_2 col.indd 69 1/6/05 5:06:30 pm Report & Accounts 2005 70
Notes to the Accounts
18 Borrowings
Group Company   
2005 2004 2005   2004
£’000  £’000 £’000   £’000
Amounts falling due within one year    
Bank loans and overdrafts    3,197 8,279 52,085 40,063
Obligations under finance leases and 
    hire purchase contracts    30 1,586 — —
Loan notes    310 1,490 — —
 3,537 11,355 52,085 40,063
Amounts falling due after more than one year
Index-linked bonds    — 87,941 —  —
Irredeemable debenture stock (note 20)    — 1,633 —  —
Obligations under finance leases and hire-purchase contracts:   
    Payable between one and two years    — 1,386 —  —
   Payable between two and five years    — 1,689 —  —
—    92,649 —  — 
The obligations under finance leases and hire purchase contracts are secured on the assets to which they relate.
19 Other Creditors 
Group Company
2005 2004 2005 2004
£’000  £’000 £’000  £’000
Amounts falling due within one year
Trade creditors    35,043  51,305 1,242 —
Payments received in advance    208  7,410 — —
Amounts owed to group undertakings    —  — 3,465 4,587
Other creditors    43,357  34,075 2,491 6,717
Deferred consideration in respect of acquisitions    888  5,862 — — 
Proposed dividends    6,830  8,874 6,830 4,494
Proposed dividends payable to minority interests    —  1,632 — —
Corporation tax payable    9,037  9,014 645 246
Other taxation and social security    2,265  2,737 151 140
97,628  120,909 14,824 16,184
Amounts falling due after more than one year    
Deferred consideration in respect of acquisitions    4,421  4,138 — —
4,421  4,138 — —
24539 HS Report 2005_p ges 34-83_2 col.indd 70 1/6/05 5:06:30 pm Homeserve plc 71
20 Irredeemable Debenture Stock
         Group
2005 2004
£’000  £’000
3½%       —  476
4% —  627
5% —  500
—  1,603
Net premium on irredeemable debenture stock       —  30
—  1,633
21 Provisions for Liabilities and Charges
        Group
        Share of
       Deferred joint venture 
       tax net liabilities  T otal
       £’000 £’000  £’000
At 1 April 2004      9,627 674  10,301
Profit and loss account charge      (480) 17  (463)
Demerged/disposed companies      (8,603) (369)  (8,972)
Acquisitions      (33) 106  73
At 31 March 2005      511 428  939
The Group’s share of gross assets and gross liabilities in joint ventures was £2,312,000 (2004: £1,518,000) and £2,740,000 (2004: £2,192,000) 
respectively. 
An analysis of deferred tax is set out in note 22.
22 Deferred Tax
 Group
2005 2004
£’000 £’000
Deferred tax is provided as follows:
Accelerated capital allowances      698 17,756
Other timing differences      (60) (67)
Undiscounted provision for deferred tax      638 17,689
Discount      (127)       (8,062)
Discounted provision for deferred tax      511 9,627
There is no deferred tax liability in the Company.
There is unprovided deferred tax of £nil (2004: £525,000) in respect of capital gains which have been rolled over against the cost of other assets held by 
the Group.
24539 HS Report 2005_p ges 34-83_2 col.indd 71 1/6/05 5:06:30 pm Report & Accounts 2005 72
Notes to the Accounts
23 Accruals and Deferred Income
         Group
2005 2004
£’000 £’000
Capital contributions (note 14)      — 4,554
Other deferred income      15,109 14,998
15,109 19,552
Other deferred income relates to policy receipts from members in respect of which the Group has an obligation to provide future services.
24 Called up Share Capital
2005 2004
£’000 £’000
Authorised        
88,000,000 Ordinary shares of 10p each      — 8,800
70,400,000 Ordinary shares of 12.5p each      8,800 —
Issued and fully paid
63,901,000 Ordinary shares of 12.5p each  (2004: 63,666,000 Ordinary shares of 10p each)   7,988 6,366
      Ordinary Share
      Share Capital  Premium
      £’000 £’000
Balance at 1 April 2004      6,366 18,902
Shares issued in the year      1,621 7,573
Transfer from profit and loss reserve      — 101 
Balance at 31 March 2005      7,987 26,576
On 6 April 2004, the share capital of the Company was consolidated with existing shareholders entitled to receive four ordinary shares of 12½p each 
for every five ordinary shares of 10p each previously held as described in note 3.
On 6 April 2004 the Company issued 11,600,000 ordinary shares of 12.5p each in a share for share exchange in order to acquire the 24.98% minority 
shareholding in the original Homeserve business. In accordance with s131 of the Companies Act 1985 this transaction was recorded by the Company at 
the nominal value of the shares issued.
During the year the Company through the Homeserve Employee Trust, purchased 1,188,000 ordinary shares of 12.5p each. The average price paid 
per share was £6.66, and amounted to a total of £7,973,000. These shares were purchased to satisfy the exercise of share options in the future. The 
Company also purchased 70,411 ordinary shares of 12.5p each for the Share Incentive Plan. The average price paid per share was £6.68, and amounted 
to a total of £474,000.
During the year 299,612 Save As Y ou Earn (SAYE) scheme options were exercised for which external consideration of £1,516,000 was received, including 
a share premium of £1,478,000. 1,068,378 Executive Share Option Plan (ESOP) options were also exercised for which external consideration of 
£6,330,000 was received, including a share premium of £6,196,000. 
24539 HS Report 2005_p ges 34-83_2 col.indd 72 1/6/05 5:06:31 pm Homeserve plc 73
Options
Details of outstanding share options are shown below:
Date of Grant Date Exercisable Number of Shares Exercise Price
SAYE Scheme 22.12.99 1.2.05 3,375 £3.00
 21.12.00 1.2.06 41,594 £3.28
 16.1.02 1.2.05 478 £4.76
 16.1.02 1.2.07 17,445 £4.76 
 10.12.02 1.2.06 60,620 £4.66
 10.12.02 1.2.08 87,208 £4.66
 30.12.04 1.3.08 188,186 £5.43
 30.12.04 1.3.10 132,053 £5.43
ESOP 3.6.98 3.6.01 162,500 £3.665
 30.7.99 30.9.02 50,000 £4.075
 23.6.00 23.6.03 87,500 £3.775
 30.11.00 30.11.03 8,600 £4.100
 17.7.01 17.7.04 262,500 £5.500
 9.1.02 9.1.05 10,000 £5.915
 8.7.02 8.7.05 289,500 £5.915
 13.11.02 13.11.05 36,000 £4.660
 1.7.03 1.7.06 611,000 £4.700
 30.9.03 30.9.06 15,000 £5.375
 27.5.04 27.5.07 759,000 £6.610
 18.8.04 18.8.07 50,000 £5.950
Options granted under the SAYE Scheme are exercisable for a six month period from the date indicated which is at the end of either a 3 year or 5 year 
savings period. Executive Scheme options are exercisable between 3 and 10 years from the date of grant.
Details of options granted to Directors are included in the Remuneration Report.
25 Reserves
Merger Profit Own shares Profit
reserve and Loss Group and and Loss  
      Group Group Company Company
      £’000 £’000 £’000 £’000
Balance at 1 April 2004     — 110,532 — 72,694
Goodwill previously written off to reserves     — 11,409 — —
Increase in merger reserve     70,992 — — —
Purchase of own shares     — — (8,447) —
Transfer to share premium reserve     — (101) — —
Retained loss for the year     — (59,867) — (29,339)
Balance at 31 March 2005     70,992 61,973 (8,447) 43,355
As provided by s230 of the Companies Act 1985, the Company has not presented its own profit and loss account. The Company’s loss for the financial 
year was £875,000 (2004: profit of £6,204,000).
24539 HS Report 2005_p ges 34-83_2 col.indd 73 1/6/05 5:06:31 pm Report & Accounts 2005 74
Notes to the Accounts
26 Acquisitions and disposals
During the year, the Group acquired the entire issued share capital of Disaster Restoration Ltd and Sergon BRM Ltd and certain of the trade and assets 
of Principal Choice Ltd. In addition, the Group acquired the remaining 24.98% minority interest in the Homeserve domestic businesses. Finally, the Group 
increased its investment in the existing joint venture, Domeo S.A., acquiring 9% of the issued share capital from the joint venture partner. Details of the 
consideration, the fair value of the assets and liabilities acquired and any adjustments thereto and the goodwill on these acquisitions are set out below. 
The acquisition method of accounting has been adopted in all cases.
Disaster  Sergon
   Minority Principal Restoration Domeo  BRM
   Interest Choice Ltd S.A. Ltd T otal
Date acquired:  6 Apr 2004 28 May 2004 29 Jul 2004 29 Nov 2004 21 Dec 2004
Acquired by:   Homeserve Homeserve at Homeserve Homeserve 
   Homeserve GB Home  International  Assistance 
   plc Ltd Ltd Ltd Ltd
£’000 £’000 £’000 £’000 £’000 £’000
Consideration:
Cash including acquisition expenses  664 1,394 750 864 11,408 15,080
Issue of shares  72,442 — — — — 72,442
Deferred consideration payable in cash  — 150 — — — 150
73,106 1,544 750 864 11,408 87,672
Fair value of net assets:
Tangible fixed assets  — — 87 — 180 267
Cash at bank and in hand  — 105 — — 890 995
Other net current assets/(liabilities)  — (97) 410 (105) (1,313) (1,105)
Minority interests  6,166 —  — — — 6,166
   6,166 8 497 (105) (243) 6,323
Goodwill on acquisition  66,940 1,536 253 969 11,651 81,349
Except in respect of Sergon BRM Ltd, the above fair values are equal to the book values at the date of acquisition. 
Fair value adjustments of £274,000 were made on the acquisition of Sergon BRM Ltd in order to align the accounting policy in respect to revenue 
recognition. 
In addition, a franchise was purchased by Homeserve Emergency Services Ltd giving rise to goodwill of £307,000.
Goodwill is being amortised over its estimated useful life of up to 20 years.
24539 HS Report 2005_p ges 34-83_2 col.indd 74 1/6/05 5:06:31 pm Homeserve plc 75
A summarised profit and loss account in respect of the substantial acquisition is set out below:
        Sergon 
        BRM
        Ltd
Period to acquisition        1.01.04
        to
        21.12.04
        £’000
Turnover       40,474
Operating profit       763
Net interest receivable       43
Profit before taxation       806
Taxation       (242)
Profit after taxation       564
The profit after taxation from 1 April 2004 to 29 July 2004 for Disaster Restoration Ltd was £44,000.
       Disaster Sergon
       Restoration  BRM
       Ltd Ltd
 Previous financial period       Y ear ended Y ear ended
       31 Mar 31 Dec
       2004 2003
       £’000 £’000
(Loss)/profit before taxation      (87) 506
Taxation      12 (156)
(Loss)/profit after taxation      (75) 350
As only certain of the trade and net assets of Principal Choice were acquired, it is not possible to identify the profit after tax of Principal Choice prior to 
the date of acquisition. 
There were no material recognised gains and losses in the periods above other than the profit on ordinary activities after taxation.
The net cash outflow and increase in net debt in respect of the acquisitions comprised:
       £’000
Cash consideration       (15,080)
Less cash balances acquired       995
        (14,085)
The consolidated cash flow statement for the year ended 31 March 2005 includes operating cash inflows with respect to Sergon BRM Ltd of £552,000. 
The operating cashflows of Principal Choice and Disaster Restoration Ltd are included within the results of existing Group undertakings and are not 
separately identifiable.
24539 HS Report 2005_p ges 34-83_2 col.indd   75 1/6/05   5:06:31 pm Report & Accounts 2005 76
Notes to the Accounts
The following disposals were made during the year:
      Middleton
  South Mail Onsite Doorman Maintenance Onsite
   Staffordshire Solutions South Services Services Central
  Businesses Ltd Ltd Ltd Ltd Ltd  
  6 Apr 2004 23 Jul 2004 24 Aug 2004 31 Jan 2005 22 Mar 2005 23 Mar 2005 T otal
£’000 £’000 £’000 £’000 £’000 £’000 £’000
Tangible fixed assets 154,214 5,889 1,562 942 823 2,037 165,467
Stocks 1,047 1,413 16 564 1,756 902 5,698
Debtors 8,820 4,559 2,002 — 5,759 3,647 24,787
Cash/(overdraft) (1,301) 441 1,100 950 (318) 2,055 2,927
Other net assets/(liabilities) (134,258) (4,936) (585) (92) (6,186) (4,616) (150,673)
Net assets disposed of 28,522 7,366 4,095 2,364 1,834 4,025 48,206
Related goodwill — 13,215 5,052 6,000 6,271 7,356 37,894
Disposal costs — 87 56 1,112 248 301 1,804
Consideration — (7,368) (3,000) (6,618) (1,200) (4,234) (22,420)
Dividend in specie/loss on disposal of business 28,522 13,300 6,203 2,858 7,153 7,448 65,484
Net cash inflows/(outflows) in respect of the
    disposals comprised 
Cash consideration — 7,368 3,000 6,618 1,200 4,234 22,420
Cash at bank and in hand disposed — (441) (1,100) (950) — (2,055) (4,546)
Bank overdraft disposed 1,301 — — — 318 — 1,619
  1,301 6,927 1,900 5,668 1,518 2,179 19,493
Profit/(loss) before tax in period to disposal 81 (1) 16 157 1,248 1,242 2,743
The disposal of the South Staffordshire businesses was by way of a dividend in specie. The disposal of the other businesses gave rise to an exceptional 
loss on disposal of £36,962,000.  In addition, a provision amounting to £2,187,000 has been recognised in respect of further costs and asset write downs 
that are expected to be incurred in relation to the disposal and termination of the Commercial Outsourcing businesses. As a result, the total loss in 
relation to the disposal of these businesses amounts to £39,149,000. There has been no impact on the corporation tax charge of this exceptional loss. Of 
the related goodwill of £37,894,000, £11,409,000 was previously written off directly to reserves.
Operating costs of £1,039,000 relating to the disposed businesses have been included within discontinued activities.
27 Operating Lease Commitments
Annual commitments under non cancellable operating leases are as follows:     Group
2005 2004
Land and  Land and
     buildings Other Buildings Other 
£’000 £’000 £’000 £’000
Leases which expire:  
Within one year    244 536 381 887
Between two and five years    293 1,395 716 2,169
After five years    717 — 290 —
1,254 1,931 1,387 3,056
28 Financial Instruments
The Group’s financial instruments included below comprise cash balances, borrowings and creditors falling due after more than one year. These do not include 
short term debtors and creditors. The main purpose of these financial instruments is to raise finance for the Group’s operations. It is, and has been throughout 
the period under review, the Group’s policy that no trading in financial instruments shall be undertaken. The Group’s policy in respect of cash and borrowings, is 
to maintain flexibility with a balance between fixed and floating rates and long and short term debt. The Group has no significant exposure to foreign currencies.
24539 HS Report 2005_p ges 34-83_2 col.indd 76 1/6/05 5:06:32 pm Homeserve plc 77
Interest Rate Risk Proﬁ le
2005 2004
£’000 £’000
Retail Price Index-linked bonds      — (87,941)
Fixed rate financial liabilities      (30) (6,294)
Floating rate financial liabilities      (3,507) (9,769)
Floating rate financial assets      14,753 10,497
11,216 (93,507)
Financial liabilities on which no interest is paid      (4,421) (4,138)
6,795 (97,645)
For all debt, assets and liabilities, the book values and fair values are not materially different, except for the index linked bond which at 31 March 2004 
had a fair value of £99,634,000.       
      Financial
      liabilities
      on which no
     Fixed rate financial liabilities interest is paid
    Weighted Weighted average  Weighted
    average period for which average period
    interest rate rate is fixed until maturity
    % years years
2005
Sterling   15.0 1.0 1.1
2004 
Sterling   7.3 3.0 1.1
The floating rate financial assets and liabilities comprise sterling denominated loan notes, bank loans and overdrafts that bear interest at rates based on 
LIBOR and base rate. The Group’s cash balances earn interest at floating rates linked to LIBOR. 
Maturity of Financial Liabilities
The maturity profile of the Group’s financial liabilities at 31 March was as follows:
2005 2004 
£’000 £’000
In one year or less, on demand      3,537 11,355
In more than one year, but not more than two      4,421 1,386
In more than two years, but not more than five      — 5,827
In more than five years      — —
In more than twenty years       — 89,574
7,958 108,142
Borrowing Facilities
The Group has various borrowing facilities available to it. The undrawn committed facilities available at 31 March in respect of which all conditions 
precedent had been met at that date were as follows:
2005 2004   
£’000 £’000
Expiring in one year or less      25,450 34,350
Expiring in more than one year but not more than two years     — 20,000
Expiring in more than two years      70,000 —
 95,450 54,350
24539 HS Report 2005_p ges 34-83_2 col.indd 77 1/6/05 5:06:32 pm Report & Accounts 2005 78
29 Pension Retirement Beneﬁ ts
The Group operates a number of funded pension schemes for the benefit of its employees. The Group participates in the Water Companies Pension 
Scheme, by way of a separate sub-fund, which provides benefits based on final pensionable pay. The Group also operates a number of defined 
contribution Money Plan Pension Schemes. The assets of these schemes are held separately from those of the Group, being invested by discretionary 
fund managers.
The contributions to the defined contribution schemes are charged against profits as incurred. The amount charged to the profit and loss account for the 
defined benefit scheme is the estimated regular cost of providing the benefits accrued in the year, adjusted to reflect variations from that cost.
The regular cost of the defined benefit scheme is calculated so that it represents a substantially level percentage of current and future pensionable payroll. 
Variations from regular cost are charged or credited to the profit and loss account over 13 years, being the estimated average remaining working life of 
Scheme members. The regular cost and the variations are determined by a qualified actuary on the basis of triennial valuations, using the current unit 
method for death in service benefits and the projected unit method for other benefits.
The most recent actuarial valuation at 1 April 2002 showed the market value of the Group’s sub-fund as £121.3 million, and that the actuarial value of 
those assets represented 113% of the benefits that had accrued to members after allowing for expected future increases in earnings.
As required by SSAP 24, the figures included in the accounts in respect of the defined benefit pension scheme are based on the 1 April 2002 actuarial 
valuation. This does not take into account any impact of the fall in general stock market values since that date. Any such impact will be reflected in the 
next SSAP 24 triennial valuation as at 1 April 2005 based upon which subsequent pension costs will be determined until the adoption of FRS 17.
The assumptions which have the most significant effect on the results of the valuation are those relating to the rate of return on investments and the 
rates of increase in salaries, wages and pensions. The valuation at 1 April 2002 assumed that equity returns would be 7.2% per annum, that salary and 
wage increases would average 4.8% per annum and that present and future pensions would increase at the rate of 2.8% per annum.
In accordance with the recommendations of the actuary, the amount charged to the profit and loss account for the defined benefit scheme in 2005 was 
£575,000 (2004: £1,890,000) representing an employer’s contribution rate of 16.3%. The amount charged to the profit and loss account for the various 
defined contribution schemes in 2005 was £1,098,000 (2004: £975,000).
Changes to pension arrangements following the demerger
Following the demerger, a separate sub-fund has been established within the Water Companies Pension Scheme for Homeserve plc. The rules and the 
benefit basis for employees has been replicated for the new sub-fund. Homeserve plc is the designated employer.
Active members employed in the Homeserve group have been transferred into the new fund, as were deferred members. All pensioners at 6 April 2004 
remained in the existing South Staffordshire Water sub-fund. 68 active members were transferred to the new sub-fund along with 58 deferred members.
For the purposes of the allocation of assets and liabilities between the two sub-funds a valuation was carried out on an ongoing funding basis as at 30 
November 2003. This resulted in the new Homeserve sub-fund taking £8m of assets and £0.4m of the deficit leaving the South Staffordshire Water sub-
fund with £113m of assets and £2.5m of the deficit. The assets will first be allocated to pensioner liabilities and then in proportion to the non-pensioner 
liabilities.
Financial Reporting Standard 17
Additional disclosures regarding the Group’s defined benefit pension scheme are required under the transitional provisions of FRS 17 “Retirement 
benefits” and these are set out below. The disclosures relate to the fourth year of the transitional provisions. They provide information which will be 
necessary for full implementation of FRS 17 in due course. 
The actuarial valuation described above has been updated at 31 March 2005 by a qualified actuary using revised assumptions that are consistent with the 
requirements of FRS 17. Investments have been valued for this purpose at market value.
Notes to the Accounts
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The major assumptions used were as follows:
31 March 31 March  31 March  
     2005 2004 2003
Rate of increase in salaries     4.9% 4.9% 4.5%
Rate of increase in pensions      2.9% 2.9% 2.5%
Discount rate      5.4% 5.5% 5.6%
Inflation      2.9% 2.9% 2.5%
The market value of the assets in the scheme, the present value of the liabilities in the scheme and the expected rate of return at the balance sheet date 
were:
2005 2004 2003
Expected Expected Expected
rate of rate of rate of 
return return return
per annum Valuation per annum Valuation per annum Valuation
% £’000 % £’000 % £’000
Equities  7.7 7,220 7.9 52,756 7.5 38,702
Bonds/gilts  — — 4.7 66,989 4.5 61,050
Corporate bonds  — — — — 5.6 5,046
Property  — — — — 6.0 1,172
Cash  4.7 78 4.6 (603) 3.8 4,116
Market value of assets   7,298  119,142  110,086
Present value of scheme liabilities   (9,854)  (131,586)  (121,186)
Deficit in the scheme   (2,556)  (12,444)  (11,100)
Related deferred tax asset   767  3,733  3,330
Deficit after deferred tax   (1,789)  (8,711)  (7,770)
Had FRS 17 been implemented in full throughout the financial year the following amounts would have been charged to the profit and loss account:
2005 2004
£’000 £’000
Amounts included within operating profit:      
Current service cost      437 3,198
Past service cost  (220) —
217 3,198
Amounts included as other finance income:
Expected return on scheme assets      462 6,051
Interest on scheme liabilities      (457) (6,716)
Credit/(charge)      5 (665)
In addition the following amounts would have been recognised in the statement of total recognised gains and losses:
2005 2004
£’000 £’000
Actual return less expected return on scheme assets      208 6,899
Experience gain on scheme liabilities      107 3,727
Effect of changes in assumptions relating to
    the present value of scheme liabilities      (685) (9,982)
Actuarial (loss)/gain      (370) 644
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Notes to the Accounts
The movement in the scheme deficit during the year was as follows:    
2005 2004
£’000 £’000
Deficit in the scheme brought forward      (12,444) (11,100)
Demerged Water business      10,109 —
Current service cost      (558) (3,238)
Contributions      482 1,915
Past service cost      220 —
Finance credit/(charge)      5 (665)
Actuarial (loss)/gain      (370) 644
Deficit in the scheme carried forward      (2,556) (12,444)
The impact of FRS 17, if implemented in full throughout the financial year, would have been to decrease the amount charged to the profit and loss 
account by £363,000 (2004: increase 1,973,000) and to reduce the reserves of the Group at 31 March 2005 by £1,789,000 (2004: 8,711,000) from 
£61,973,000 (2004: 110,532,000) to £60,184,000 (2004: 101,821,000).
The following disclosures relate to amounts which would have been charged in the statement of total recognised gains and losses.
2005  2004  2003
  % of scheme  % of scheme % of scheme
 assets/(liabilities) £’000 assets/(liabilities) £’000 assets/(liabilities) £’000
Actual return less expected return 
  on scheme assets  3 208 6 6,899 (14) (15,200)
Experience gains on scheme liabilities  1 107 3 3,727 1 1,000
Actuarial (loss)/gain  (4) (370) — 644 (20) (24,700)
30 Post Balance Sheet Event
Subsequent to the year end, the Group acquired Chem-Dry UK Limited and its related businesses for a cash consideration of £18,900,000 on a debt 
free basis.
31 Related Party Transactions
During the year, the Group purchased transport services from Harpin Ltd, a company controlled by Richard Harpin. The total value of purchases 
amounted to £110,000 (2004: £85,000) and the balance due to Harpin Ltd at the year end amounted to £8,000 (2004: £1,000) and is included in trade 
creditors.
24539 HS Report 2005_p ges 34-83_2 col.indd 80 1/6/05 5:06:33 pm Homeserve plc 81
Five Year Summary
2005 2004  2003  2002  2001
£’000 £’000  £’000  £’000  £’000
Continuing operations
Turnover
Policy Membership   130,572 100,337 81,434 56,401 43,393
Emergency Repair   100,243 73,079 43,450 6,504  4,144
Inter-division   (7,729) (4,180)  (3,617)  (2,624)  (2,021)
223,086 169,236 121,267  60,281  45,516
Operating profit
Policy Membership   37,509 29,701  22,283  13,422 10,424
Emergency Repair   4,849 2,683  1,714  695  375 
T otal operating profit   42,358 32,384  23,997  14,117  10,799
Net interest (payable)/receivable   (343) 113  75  77 18
Profit before tax (excluding goodwill
    and exceptional costs)   42,015 32,497  24,072  14,194 10,817
Goodwill   (9,321) (5,574)  (4,550)  (256)  (256)
Exceptional operating costs   (2,787) (6,616)  —  —  —
Profit before tax   29,907 20,307 19,522  13,938 10,561
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Shareholder Analysis 
As at 31 March 2005
Number of     Number of % of T otal % of
Shares     Shareholders Shareholders Shares
1–1,000     1,230 55.8 0.7
1,001–10,000     725 32.9 3.5
10,001–500,000     227 10.3 34.2
500,001–1,000,000     12 0.5 12.5
over 1,000,000     11 0.5 49.1
     2,205 100.0 100.0
Unit trusts       34.9
Private investors       34.0
Other       10.4
Pension funds       8.6
Insurance companies       7.7
Other funds       2.5
Investment trusts       1.9
       100.0
24539 HS Report 2005_p ges 34-83_2 col.indd 82 1/6/05 5:06:33 pm Homeserve plc 83
Shareholder Information
Financial Calendar
2005
29 July Annual General Meeting
5 August Final dividend for the year ended 31 March 2005 to be paid
November Interim results for the six months ending 30 September 2005 to be announced
2006
January Interim dividend for the year ending 31 March 2006 to be paid
May Preliminary announcement of results for the year ending 31 March 2006
June 2006 Report and Accounts to be circulated
Shareholder Helpline
Homeserve’s shareholder register is maintained by Computershare Investor Services PLC, who are responsible for making dividend payments and 
updating the register, including details of changes to shareholders’ addresses.  If you have a query about your shareholding in Homeserve, you should 
contact Computershare by telephone on 0870 702 0000 or in writing to PO Box 82, The Pavilions, Bridgwater Road, Bristol, BS99 7NH.
The Homeserve Website
The Homeserve website at www.homeserve.com provides news and details of the Company’s activities plus information for shareholders. The investor 
section of the website contains real time and historical share price data as well as the latest results and announcements.
24539 HS Report 2005_p ges 34-83_2 col.indd 83 1/6/05 5:06:34 pm Report & Accounts 2005 84
• UK market leader in plumbing and drainage, glazing and locks, upholstery repair 
and furniture warranties services for household insurers
• UK’s 2nd largest provider of central heating and electrical cover services
• Most water companies opt for water policies with Homeserve
• 2005 Outbound Contact Centre of the Year at National Sales Award for 
Homeserve GB with 95% customer satisfaction
• On average 1 in 11 eligible households in the UK hold a Homeserve GB plumbing 
and drainage cover policy
Warranties GB USA
S S
Australia
S S
Homeserve at a Glance
Policy Membership
Utilities Furniture retailing
Appliance 
manufacturing
Retail and 
household 
insurance
• Warranties for furniture, electrical appliances and carpets
• Motor warranties
• Water supply pipe cover
• Gas supply pipe cover
• Plumbing and drainage cover
• Gas central heating cover
• Electrical wiring
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Homeserve at a Glance
Emergency Repair
• Features the largest directly employed repair network for insurers (1,000) with a 
structure of 37 branches for maximum UK coverage
• Features the UK’s largest managed network of repair contractors, with around 
4,000 operatives
• Draws on 40 years experience in the gas heating market and expertise from a 
network of CORGI gas engineers and installers
• Homeserve Claims Management offers 24 hour claims handling taking over 2 
million calls and handling over 550,000 claims a year
Emergency 
Services
Sergon Servowarm
Claims 
Management
Household insurers Support network to policies clients
• Glass, windows, door and locks repairs 
• Emergency repair, annual service and replacement boilers for 
domestic gas heating systems
• Claims handling and network management
• Home insurance building repair 
• Disaster ﬁ re and ﬂ ood restoration
• Carpet and upholstery cleaning network
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Making it Happen for Business Partners
The key to the success of the Homeserve model is 
to simply ‘make it happen’ for its 100 plus business 
partners.  Whether it delivers quality and speedy repairs 
or affordable but effective policy membership cover; its 
business partners want a product that customers can 
rely on at times of crisis.
Homeserve’s infrastructure of skilled contractors and 
directly employed tradesmen means it can deliver 
emergency repair services anywhere in the UK for 
any home emergency.  Homeserve’s expertise and 
experience in utility, appliance manufacturing, retail and 
household insurance and furniture retailing markets 
grows as more and more business partners opt to 
work with the company on policy membership.   This 
gives Homeserve a great competitive advantage for 
partners who want the reassurance of an ally that 
understands its market and can assist in the marketing, 
telemarketing, IT, complaint management, regulation & 
compliance and ﬁ nance aspects of the relationship.
Policy Membership
In 2004 Cambridge Water made a strategic decision to 
increase its revenues from non-regulated earnings. 
It made sense to offer added value to its own customer 
base without having to reinvent the wheel and without 
having to invest signiﬁ cant amounts up front. 
An afﬁ nity partnership with Homeserve GB presented 
an innovative solution with the introduction of 
Homeserve’s plumbing and drainage cover branded 
as Cambridge Water.  For a small annual premium, 
Cambridge Water customers would have access to 
speedy service for emergency plumbing and drainage 
repairs from Homeserve for up to four call outs a year.  
Homeserve developed a product that had a natural 
synergy with Cambridge Water’s to give ‘permission’ to 
sell to its customers. 
It took the pressure off Cambridge Water and 
quickly established the systems and processes to the 
marketing, sale and management of the product on its 
behalf, resulting in little cost or resource disruption to 
Cambridge Water.
The risk to Cambridge Water was minimal as payments 
are made on a per sale basis requiring no cash 
investment.
Homeserve’s experience in the water market as a 
support service is unrivalled as most water companies 
already work with Homeserve.
Homeserve was able to make Cambridge Water’s 
objectives happen.
In just less than a year, Cambridge Water achieved 
around 3% penetration of its customer base and has 
subsequently extended its relationship with Homeserve, 
now also offering its customers cover on water supply 
pipe.
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Emergency Repair
HBOS General Insurance (Halifax and Bank of 
Scotland) provides its award winning Halifax
*
 Home 
Insurance to over two million customers and insists on 
the highest level of customer service standards from all 
their trusted partners.  
HBOS has been working in partnership with 
Homeserve Claims Management to provide its 
customers with speedy access to a network of reliable 
contractors at times of home emergency crisis.  
For HBOS, Homeserve Claims Management delivers 
services to make the home safe or secure or prevent 
further damage to domestic property.
*
 Halifax Home Insurance is rated ﬁ ve stars for Buildings and Contents cover 
for product features and beneﬁ ts by Defaqto, an independent market research 
company.
Halifax Home Insurance has been awarded “Best Direct Provider” by Y our Money 
Direct Awards 2004 and “Best Home Insurance Provider” 2004 from Mortgage 
Advisor and Home Buyer awards.  This is in addition to “Claims Initiative of the Y ear”
at the 2004 British Insurance Awards.
“Homeserve’s approved contractors provide us with 
an invaluable and reliable service for our customers, 
including guaranteed repairs in all kinds of home 
emergencies such as repairs to burst pipes, electrical 
failures and breakdown of heating boilers.”
HBOS General Insurance
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Homeserve Contacts
Homeserve plc
Cable Drive
Walsall
WS2 7BN
T: 01922 426262    F: 01922 427904
30 Old Broad Street
London
EC2N 1HQ
T: 01922 426262    F: 020 7256 2621
Homeserve GB
Cable Drive
Walsall
WS2 7BN
T: 01922 658700    F: 01922 659719
Homeserve Retail Warranties
Alpha House
Sunnyside Road North
Weston Super Mare
Somerset
BS23 2PZ
T: 01934 631111    F: 01934 637146
Homeserve Emergency Services
Cathedral House
16 Cathedral Street
Norwich
NR1 1LX
T: 01603 218600    F: 01603 619292
Homeserve Servowam
9 The Gateway Centre
Coronation Road,
Cressex Business Park
High Wycombe
HP12 3SU
T: 0845 600 22 66    F: 01494 473152
Website: www.homeserve.com
Homeserve Sergon
Edwinstowe House,
Edwinstowe
North Nottinghamshire
NG21 9PR
T: 01623 585000    F: 01623 585001
Homeserve Claims Management
Fulwood Park
Fulwood
Preston
PR2 9NZ
T: 01772 758758    F: 01772 758821
Chem-Dry
Colonial House
Swinemoor Lane
Beverley
HU17 0LS
T: 08456 582828    F: 01482 887050
Domeo
75 Cours Albert Thomas
69447 Lyon Cedex 03
France
Home Service USA
3401 NW 82 Ave Suite 220
Miami
Florida
FL33122
USA
T: +1 305 477 2764    F: +1 305 477 2862
Home Service Australia
Level 2, 33 – 55 Atchison Street
St Leonards
Sydney
NSW 2065
Australia
T: +61 (0)2 9461 3891    F:  +61 (0)2 9906 8933
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T: +33 472 44 8910    F: +33 472 44 8673 Annual Report cover 2005 to print.indd   2 3/6/05   8:28:31 am