HomeServe's core policy membership operations have delivered another strong performance. Across the UK, Continental Europe and US we have seen 14% policy growth to 9.2m, 8% growth in customers and 22% operating profit¹ growth to £92.3m.

During the year, we transferred those parts of our claims handling and network operations that support our UK policy customers into UK Membership from Emergency Services. Our original intention for Emergency Services was to develop a unique, national, multi-trade network in the UK to support our growing policy membership base and to provide an integrated claims fulfilment solution for household insurers.

Whilst we have validated the benefit to insurers of such an integrated hub proposition, we have not progressed strategic partnerships of this type at a rate consistent with our original objectives. On the back of this and ongoing challenges within the insurance sector, we have decided to reposition the Group to focus on our membership businesses which we believe is in the best long-term interest of our shareholders. Accordingly, we have decided to exit UK Emergency Services and are currently progressing a number of approaches.

The decision to exit this business is one we have considered very carefully in light of our dedicated employees, customer relationships and investment of time and resources in building the business since 2002. In addition, as a result of ongoing trading challenges and deteriorating financial performance, we have taken the difficult but necessary decision to write down the value of UK Emergency Services assets resulting in an impairment charge of £97m and a statutory pre-tax loss for the year for the Group of £21.7m.

Core membership operations – business development

We are very pleased with the strong performance of all our membership businesses. Our UK Membership business has delivered another year of strong growth with gross new policy sales of 1.83m (2008: 1.68m) and our retention rate for the year remained high at 83% (2008: 85%). Our decision to focus on driving value per customer has been successful through continued conversion of existing members to Combined Policies and income per customer growing by 18% to £59.

The reorganisation of our UK operations has created a fully integrated membership business including claims management and policy repair networks resulting in improved customer service and more focused and efficient service delivery with one division taking ownership for the entire customer journey.

We have also reached a significant milestone in our international operations which delivered an operating profit¹ for the year of £5.1m compared with a loss of £0.5m last year.

1. 1 Excluding amortisation of acquisition intangibles, impairment charge, joint    venture taxation and exceptional operating costs, see Financial review and    notes 5 and 14.

2. 2 Excluding amortisation of acquisition intangibles, impairment charge and    exceptional operating costs, see Financial review and notes 5 and 14.