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Summary mid-year update for the six months ended 30 September 2015

The Directors of Galaxy Finco Limited, the parent company of the Domestic & General Group (“D&G”), present their summary mid-year update for the group for the six months ended 30 September 2015. The information is extracted from the unaudited management accounts.

Trading update

During the period the Group increased sales by 0.4% in the six months to September compared with the same period in the prior year. The UK business performed particularly strongly, showing a 9.5% increase year on year. International sales were impacted by the cessation of the MSH Germany contract in August 2014. Excluding the effect of MSH Germany and on a constant currency basis, group sales were up 10.0%.

Underlying operating profit is 11.2% ahead of prior year as a result of both increased underwriting contribution in the year and one-off costs made in the business following acquisition not being repeated. The EBITDA increase was in line with the increase in underlying operating profit. Cash flow available for debt service has increased since the prior year as a result.

Investment in the capital infrastructure of the company continues, as we further develop our IT platform to enable future growth. In the past six months, we have launched a new e-Commerce platform and upgraded our telephony in our contact centres.

At 30 September 2015, the Group in total provided product protection for 22.6 million appliances and 16.2 million customers through point-of-sale, point-of-registration, post-point-of-sale and point-of-need products.

During the period we renewed our partnership with Sky with a new multi-year contract and also entered into an exclusive contract for new business with leading boiler manufacturer Vaillant.

Outlook

The business continues to grow and, excluding the impact of MSH Germany, we expect to see underlying sales growth in our major markets and continue to leverage off the opportunities provided by our pan-European contracts with our OEM partners. We will provide a further update on performance with our annual report and accounts for the year ended 31 March 2016.

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