Retail Decisions to Acquire Fuelserv

ReD also announces a Placing with institutional and certain other investors to raise approximately £13.3 million net of expenses (together with an Open Offer to Qualifying Shareholders of a further £5.1 million assuming it is taken up in full). The Group also proposes a share consolidation. Fuelserv is the UK’s second largest operator, by fuel volume, in the independent fuel card and ‘bunkering’ sector with around 6,300 live customer accounts as at the end of 2004 and with more than 65,000 live fuel cards in issue as at 8 September 2005. Due to its size, the acquisition is a Class 1 transaction for ReD as defined by the UK Listing Authority, requiring shareholder approval at an EGM to be held on Friday 4 November 2005. ReD already has an established and highly successful fuel card operation in Australia, which in the first half of 2005 accounted for approximately 90% of the Group’s operating profits and 50% of its revenues. The Fuelserv acquisition will have a transforming impact on the financial position of the Group and should enable ReD to continue to build the Group’s profitability. The Acquisition will also provide critical mass in a sector of the market that has high barriers to entry and can realistically only be accessed through acquisition. Highlights – the Directors believe the Fuelserv acquisition will: • Have a transforming impact on the financial position of the Group • Provide ReD’s entry into the UK & European fuel card markets for the first time • Build profitability on the Group’s extensive Australian fuel card experience • Provide cross-selling opportunities of related services into Fuelserv’s customer base - as successfully achieved at ReD Australia • Extend the Group’s exposure to areas of the payments process that provide greater value and attract greater revenue streams • Be earnings enhancing in 2006 Fuelserv is considered to be a non-core asset of Deutsche Post, hence the decision for its disposal. ReD’s Board believes the Acquisition provides a good opportunity to expand ReD’s card issuing capability into Europe and create significant value. ReD’s proven ability in the fuel card industry has been demonstrated by ReD’s successful Australian fuel card operation. ReD’s aim is to replicate its successful Australian model in the UK and across Europe by applying its skills to Fuelserv, including placing greater focus on client retention and by extending the products and services offered. ReD’s existing fuel cards have clear advantages for the owners of fleets, by helping them keep their vehicles on the road. ReD’s fuel cards have a wide network of accepting merchants and provide vital information that simplifies the management of vehicle fleets. These cards also offer non-fuel services through affinity partners, such as breakdown cover, vehicle rental and hotel accommodation. ReD’s current senior management, including Chief Executive Carl Clump, have over 80 years experience of the fuel card arena, extending back to well before they joined ReD.