Egg plc’s loss before tax for the period was GBP37.9 million (31 March 2000: GBP38.3 million loss). This is in line with our plan and reflects the continuing investment this quarter in customer acquisition.
Egg achieved strong revenue growth with operating income earned of GBP36.5 million (31 March 2000: GBP14.4 million). Net interest margin reached 1.60% (31 March 2000: 0.59%). Other income also grew strongly, primarily reflecting fees and commissions earned from the larger banking book, especially credit cards and personal loans.
The operational and administrative functions have continued to absorb the significant increases in business volumes this quarter, with only a modest increase in costs to GBP32.1 million compared to the fourth quarter of 2000 (GBP31.5 million). The increase in costs compared to period ended 31 March 2000 (GBP23.8 million) reflects the rapid growth in customer numbers and transaction volumes over the past twelve months.
Investment in brand and marketing was GBP15.0 million (31 March 2000: GBP12.1 million). This investment has resulted in a record number of net new customers this quarter as well as building awareness of the Egg brand in the ISA and mutual funds markets.
Development costs were GBP3.8 million (31 March 2000: GBP7.2 million). This reduced in line with our plans reflecting the fact that the bulk of investment needed to deliver the core banking and intermediation infrastructure has now been completed.
Depreciation increased in line with capital expenditure over the previous twelve months. The charge for the period of GBP5.4 million also reflects the amortisation of goodwill on the investment in IFonline plc.
Chief Executive Paul Gratton commented:
We are pleased with the strong start we have made to the year. The acceleration in our rate of customer growth in an increasingly competitive environment is particularly encouraging. Egg is proving attractive to a market that is becoming comfortable with using technology to manage its financial affairs.
