Proposed Acquisition of Stanley Leisure’s Retail Bookmaking Operations

Proposed Acquisition of Stanley Leisure’s Retail Bookmaking Operations 16 May 2005

Disclaimer This presentation provides a summary of the relevant transaction. Any decision by shareholders on whether to vote in favour of the transaction should be based on the circular to be distributed to shareholders of the company in due course, and not on this summary. This presentation does not constitute or form part of any offer or invitation or solicitation to purchase shares, nor should this presentation or any part of it form the basis of any investment decision. Any synergies or enhanced earnings anticipated in this presentation should not be taken to be a forecast of profits and should not be interpreted to mean that the earnings per share for any period following the acquisition will necessarily be greater that for any prior period.

Agenda 1. Introduction and Overview - David Harding 2. Stanley’s Retail Bookmaking – Overview and Integration - Tom Singer 3. Cost Savings and Revenue Opportunities - Tom Singer 4. Funding and Capital Structure - Tom Singer 5. Timetable and Summary - Tom Singer

Introduction • Agreement of the terms of the proposed acquisition of Stanley Leisure’s domestic retail bookmaking operations for £504 million • Stanley’s Retail Bookmaking comprises of 624 Licensed Betting Offices (“LBOs”) in Great Britain, Northern Ireland, the Republic of Ireland, Jersey and the Isle of Man • Stanley’s Retail Bookmaking is fourth largest operator of LBOs in the UK • William Hill is assuming the UK competition risk • Subject to shareholder approval at EGM to be held in mid June 2005 • Anticipated completion shortly thereafter • Board commitment to review enlarged Group’s capital structure following the acquisition and competition authorities’ review

Key Messages • A rare opportunity for William Hill to increase the scale of its UK retail betting estate, creating the UK’s leading network of LBOs • Significant scope for synergies and improvement in the profitability of Stanley's Retail Bookmaking • Stanley's Retail Bookmaking has EBITDA of £37.2 million after adjustment for year ended 2 May 2004 – expected to be slightly lower in the year ended 1 May 2005 in line with all bookmakers including William Hill • Expected to deliver pre-tax synergies of circa £13 million in 2006 • Expected to enhance earnings per share(1) before exceptional items and generate returns in excess of William Hill’s cost of capital in 2006, the first full financial year following the transaction • Enhances opportunity to grow profitability of core business in medium term (1) This statement should not be interpreted to mean that future earnings per share of William Hill following the proposed acquisition will necessarily be higher than historical earnings per share

Background to the Proposed Acquisition • Strategy since listing of delivering sustainable earnings growth for its shareholders • Profit on ordinary activities after tax (before exceptionals) has grown 153% over last two financial years • Proposed return of capital announced in absence of suitable acquisition opportunities • Subsequently, opportunity to acquire Stanley's Retail Bookmaking arose

Reasons for the Proposed Acquisition A rare opportunity to substantially increase distribution reach • Addition of 624 LBOs in Great Britain, Northern Ireland, the Republic of Ireland, Jersey and the Isle of Man • Highly complementary estate (North West of England, Ireland) • Limited number of comparable opportunities William Hill Stanley's Retail Bookmaking Total: 1,613 Total: 624 Scotland and North East: 120 LBOs Scotland and North East: 269 LBOs Offshore: 100 LBOs North: 316 LBOs North: 145 LBOs London North: 366 LBOs London North: 22 LBOs London South: 366 LBOs London South: 46 LBOs Mid West, including Midlands, Liverpool, Wales and South West: 296 LBOs Mid West, including Midlands, Liverpool, Wales and South West: 191 LBOs Note: Stanley LBO breakdown conformed to William Hill’s divisional split

Benefits of the Proposed Acquisition Significant scope for synergies • Completed due diligence • Confident of substantial synergies by applying William Hill’s disciplines and approach to the enlarged group... - ...pre-tax synergies of £13 million - ...combination of hard synergies (cost and contract improvements) and operational (revenue enhancement) synergies Attractive financial and strategic benefits • Attractive immediate financial returns - Expected to enhance earnings per share and generate returns in excess of WACC in 2006, first full financial year • Fundamental strategic benefits not provided by previously allocated return of capital

Strategic Benefits not Quantified in Synergies • #1 or #3 - Offensive or Defensive - New markets/competitive challenge - Buying power and influence - Partner of choice - UK consolidation - International deregulation • Strategic benefits of extended distribution/scale - Product range/depth in low margin environment - Increased limits/improved liability management - Single account - cross sell product/channel proposition - Maximum leverage of investments in technology - Long term - Tote/Lottery licenses?

Management • Tom Singer to be promoted to Chief Operating Officer - Full responsibility for integration - Extensive experience of business integration projects • Shai Wasani will assume some of Tom’s responsibilities for finance function • Instigating a search for new Finance Director • David Harding to continue role as Chief Executive • At EGM will seek shareholder approval for new share based incentivisation arrangements for David Harding and Tom Singer • Board believes the Proposed Acquisition is in the best interests of the Company

Agenda 1. Introduction and Overview 2. Stanley’s Retail Bookmaking – Overview and Integration 3. Cost Savings and Revenue Opportunities 4. Funding and Capital Structure 5. Timetable and Summary

Stanley Betting Overview • Stanley operates 624 LBOs in Great Britain, Northern Ireland, the Republic of Ireland, Jersey and the Isle of Man • Proposed acquisition does not include Stanley’s telephone and interactive betting operations or international business • EBITDA of £37.2 million after adjustments for year ended 2 May 2004 • Marginally lower level of profitability expected for year ended 1 May 2005 due to unfavourable horseracing and football results

Integration • Due diligence completed • Business plan for combined business going forward • First 6-8 weeks post completion doing further analysis • Pace of integration subject to possible competition issues • After competition issues resolved, early focus on: - Rebranding of LBOs (William Hill more recognisable national betting brand) - Rationalisation of central functions and removal of duplicate structures - Harmonisation of prices and product offering - IT integration issues

Overview of Synergies, Costs and Capex • Expected total synergies of circa £13 million in 2006 • £7.5 million from cost synergies and £5.5 million from revenue synergies • Exceptional revenue costs: (already announced) • Upfront capex investment of £10m principally to harmonise IT systems • Further capex investment of £20 million to improve retail estate over the next three years

Synergies – cost savings and economies of scale • Immediate opportunity to improve efficiency of enlarged business through elimination of duplicate: - Back office functions - Line management structures • Reduce corporate overheads • Net reduction in aggregate expenditure on branding, marketing and sponsorship • Seek to improve commercial terms with suppliers

Synergies – revenue synergies and profitability improvement • Rebranding under the more recognisable William Hill brand • Introduction of William Hill’s full range of products, prices and risk management systems • Development of additional services that provide more betting opportunities for LBO customers • Optimisation of FOBT / AWP mix • Leveraging of investment in new and existing shop technology • Cross sell William Hill’s remote channels to LBO customers

Funding and Capital Structure • Funded through existing resources and increasing borrowings (previously to be used for return of capital) • Review of capital structure will be undertaken by the Directors of William Hill • View to establish efficient capital structure for the enlarged Group • Directors will outline proposals following completion of the Proposed Acquisition and after competition authorities’ review is complete • Proposals may include a combination of one-off returns of capital, share buy-backs and dividends

Timetable • Proposed Acquisition is conditional on EGM vote • Circular to be sent to shareholders shortly • EGM to be held in mid June 2005 • Completion shortly after EGM • Trading update to market in July • Mid August at the earliest to be free of significant competition risk • Update on progress at interim results announcement (provisionally re-scheduled for 5 September 2005)

Summary • A rare opportunity for William Hill to increase the scale of its UK retail betting estate, creating the UK’s leading network of LBOs • Significant scope for synergies and improvement in the profitability of Stanley's Retail Bookmaking • Stanley's Retail Bookmaking has EBITDA of £37.2 million after adjustment for year ended 2 May 2004 • Expected to deliver pre-tax synergies of circa £13 million in 2006 • Expected to enhance earnings per share(1) before exceptional items and generate returns in excess of William Hill’s cost of capital in 2006, the first full financial year following the transaction • Enhances opportunity to grow profitability of core business in medium term (1) This statement should not be interpreted to mean that future earnings per share of William Hill following the proposed acquisition will necessarily be higher than historical earnings per share

Q & A

Proposed Acquisition of Stanley Leisure’s Retail Bookmaking Operations 16 May 2005

Proposed Acquisition of Stanley Leisure’s Retail Bookmaking Operations