1

“the fast-growing express delivery company”

November 2003

2003/04 Interim Results Presentation

Business Post Group plc

1

2

Presenters

Paul Carvell - Chief Executive

Peter Fitzwilliam - Finance Director

Russell Hodgson - Group Managing Director, Parcel Services

3

Programme

Introduction Paul Carvell

Financial Review Peter Fitzwilliam

Business Review

- Parcel Services Russell Hodgson

- Other Services Paul Carvell

Conclusion Paul Carvell

4

Background

First half of Year Two

Three Year Plan objective

substantial profit growth

Year One was investment phase

5

Highlights

Turnover up 23% to £89.4m

Operating profit before goodwill up 18% to £8.0m

Express revenues up 7%

Substantial percentage growth in HomeServe and UK Today

Weaver Pallet Express acquired

Board expects further progress in current year and remains very

confident about the long-term

6

Summarised Profit and Loss Account

Six months to 30 September 2003 2002 Increase

Turnover (£m) 89.4 72.9 23%

Operating profit before goodwill (£m) 8.0 6.8 18%

Pre-tax profit (£m) 8.0 7.1 13%

Earnings per share (p) 10.5 9.3 13%

Dividend per share (p) 5.95 5.60 6%

Strong progress in H1

7

Revenues per Working Day

£400k

£480k

£560k

£640k

£720k

£800k

Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar

00/01 01/02 02/03 03-04 03-04 Incl Weaver

8

Organic Revenue Growth - by Business Unit (£’m)

*Excludes BXT (acquired in February 2003) and Weaver Pallet Express (July 2003)

2003 2002 Increase

Express 63.0 59.0 7%

International 9.9 8.5 16%

HomeServe 6.9 2.6 165%

UK Today 2.9 1.6 81%

Total Organic* 82.7 71.7 15%

Two-speed strategy delivering strong growth overall

9

Gross Profit Margins

21.1% vs 21.5%

Affected by business unit mix

newer businesses

acquisitions

Affected by network structure

corporate/franchise mix

10

H1 H2 H1 on H1 on H2

£m £m £m

Like-for-like 8.9 9.7 10.4 17% 7%

Acquisitions - - 0.6

8.9 9.7 11.0 24% 13%

Overheads

2002/03 2003/04 Change

Rate of increase in underlying overheads is slowing

11

Operating Profit Margins

8.8% vs 9.3%

Affected by business unit mix and overheads growth

H2 seasonality

Target is to achieve 02/03 levels (excl Weaver)

12

Interest Income

£0.1m vs £0.3m

Weaver acquisition

Working capital requirements

£10m term loan

13

Summarised Cash Flow Statement

Six months to 30 September 2003 2002

£m £m

Pre-tax profit 8.0 7.1

Depreciation 1.8 1.8

Working capital (3.7) (4.3)

Tax (2.2) (2.1)

Capital expenditure (3.8) (2.5)

Trading cash flows 0.1 -

Acquisitions (9.7) -

Dividends (6.0) (5.7)

Cash flow before financing (15.6) (5.7)

Financing 10.1 0.1

Net cash flow (5.5) (5.6)

14

Summarised Balance Sheet

As at 30 September 2003 2002

£m £m

Goodwill 10.6 -

Fixed assets 33.2 30.4

Debtors 40.9 30.3

Net (debt)/cash (13.9) 1.1

Other creditors <1 year (21.1) (15.3)

Long-term liabilities (1.3) (1.0)

Net assets 48.4 45.5

RONA 23.1% 22.0%

Balance sheet remains strong; RONA improving

15

Business Overview

Parcel Services

Express - UK business-to-business parcels

International - International parcels and mail

HomeServe - UK business-to-consumer parcels

Network Services - Shared activities centrally managed

UK Today - UK (same day) business couriers

UK Pallets - UK business-to-business freight

UK Mail - UK business mail

The provision of time-definite delivery services

16

Business Review

ExpressCore business - although reduced to 70% from 81% of Group turnover

Revenues up 7% to £63.0m

Action taken to improve quality of revenue

Focus remains on premium service

17

Business Review

International11% (2002: 12%) of Group turnover

Revenues up 16% to £9.9m

FedEx relationship - most of the above - remained strong

International Mail, launched in July 2002, made good progress

Eurodis road deliveries network commenced trails on 1 October

prior to launch in January

Market, worth £1.0bn p.a., is growing twice as fast as domestic market

18

Business Review

HomeServe8% (2002: 4%) of Group turnover

Revenues up 165% to £6.9m

New customers include Walsh Western International

Further new services being explored

Focus on £250m p.a. upper end of the market

19

Business Review

Network ServicesLevel of on-time deliveries consistently high

Unit cost increases well below inflationary levels

Programme to improve customer satisfaction under way

Programme to improve staff satisfaction under way

20

21

Business Review

Focus on greater operational leverage

Express - Focus on yield

International - Eurodis launch

HomeServe - Rapid growth

Network Services - Optimise infrastructure

Technology - Market leading

Cross-selling

Parcel Services

22

Weaver Pallet Express acquired in late July for £9-12.5 million

Pro forma turnover and EBIT of £16.2 million and £1.2 million

Nationwide express pallet delivery service through partnership network of 70

independent haulage businesses, with national hub at Lichfield (Staffs)

No 4, but outperforming fast-growing market

Excellent prospects

Business Review

UK Pallets

23

Business Review

UK Today3% (2002: 2%) of Group turnover, with BXT a further 2% (2002: nil)

Revenues up 81% to £2.9m

Targeting national contracts

FastPart service to be introduced in H2

BXT technical courier trading well and developing in line with expectations

UK courier market estimated to be worth over £300m p.a

24

Business Review

UK Mail

giving you the choice

Unique two-day “Business Class” proposition

Definitive determination by Postcomm of access terms,

requested in April 2002, expected by Christmas 2003

Operational details to be agreed

Service will not start before April 2004 at the earliest

£0.1m H1 costs expensed

£5bn p.a. market opportunity

25

Strategy - 3 Year Plan

Express to remain core Further market share gains

Substantially develop HomeServe, International

and UK Today by bringing in expertise Excellent sales growth

Identify new growth opportunities UK Mail, UK Pallets

Consider strategic acquisitions BXT, UK Pallets

Maximise use of existing infrastructure ongoing Parcel Services will assist

Two-speed strategy backed up by greater focus

26

Strategy - MarketsMarket Market Market Share %

Size £bn Growth % 2001 2003

Existing Markets

Express 1.6 c5-6 c6 c7.5

International 1.0 c10 <1 c2

HomeServe 0.2 Rapid c1 c5

UK Today 0.3 Consolidating <1 c2

Prospective Markets

UK Pallets 0.9 >30 Nil c3

UK Mail 5.0 3 Nil Nil

27

Current Trading and Prospects

October in line with expectations

Board expects further good progress this year

Very confident about long term potential