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Interim Results Announcement

Interim Results Announcement. September 2003. David Harding. Chief Executive. William Hill PLC Operating highlights 26 wks to 01/07/03. EBIT up 27%, profitable growth all channels Further product diversification FOBT rollout extended IT and estate development on track Deregulation.

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Interim Results Announcement

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  1. Interim Results Announcement September 2003

  2. David Harding Chief Executive

  3. William Hill PLC Operating highlights 26 wks to 01/07/03 • EBIT up 27%, profitable growth all channels • Further product diversification • FOBT rollout extended • IT and estate development on track • Deregulation

  4. EBIT up 27%, profitable growth all channels

  5. Further product diversification

  6. FOBT rollout extended • 2525 Terminals installed by end June • Average weekly net profit/terminal over £350 • Anticipate c 3100 by year end • Anticipate removing 4 – 500 AWPs • Gaming Board case unlikely before Jan ‘04

  7. Retail Technology Programme on track Retail Technology Programme Communications Infrastructure Rollout Tender Central site integration Pilot & Rollout Text system EPOS Design/software build Software test/integrate Soft/hardware tender Hardware trials Pilots/UAT Rollout Training/Development 2003 2004 2005

  8. Estate development on track * Further 25 new licences in application

  9. Deregulation “......Government ......to......introduce legislation......drafted such that betting machines will be brought within relevant controls for gaming machines” “......Betting offices would be able to install up to four gaming machines with a maximum prize of £500” “......Does not affect the display in LBOs of virtual races......on which bets may be taken at the counter” DCMS press release Jan 8 “We will present a complete draft of the Gambling Bill to Parliament in the Autumn, for pre-legislative scrutiny by a joint committee of both houses” DCMS press release August 7

  10. Tom Singer Group Finance Director

  11. Summary of Financial Results (pre exceptional items)1H, 2003 v 1H, 2002 (1) Includes casino drop and AWP cash-in-box net of VAT (2) Includes casino drop and AWP cash-in-box inclusive of VAT

  12. Summary of Earnings and Dividends (pre exceptional items)1H, 2003 v 1H, 2002

  13. Actual Earnings v Proforma (pre exceptional items)1H, 2003 v 1H, 2002 1H, 2003 Actual £m 1H, 2002 Unaudited Proforma £m Movement % Profit before interest and taxation (EBIT) 101.9 80.1 Net interest payable (16.3) (17.7) (1) Taxation (23.1) (17.5) (2) Profit after taxation 62.5 44.9 +39 +40 Earnings per share (pence) (3) - Basic - Diluted 14.9 14.8 10.7 10.7 (1) Assumes average net indebtedness of £525m and an interest rate of 6.75% (2) Assumes an effective tax rate of 28% (3) Assumes 418.4m and 422.7m shares in issue for basic and diluted EPS calculations, respectively

  14. Analysis of Gross Win1H, 2003 v 1H, 2002 1H, 2003 1H, 2002 Movement (1) Includes greyhound stadia, Course and Group Promotions

  15. Taxes and Duties1H, 2003 v 1H, 2002

  16. Net Operating Expenses1H, 2003 v 1H, 2002 (1) Includes costs of horse racing pictures and ISDN network (2) Primarily central support functions, property costs and asset write offs

  17. Tight Control of Costs (pre exceptional items)1H, 2003 v 1H, 2002

  18. Gross win, £m Operating profit, £m 1H, 2003 1H, 2002 Retail (1) : Results1H, 2003 v 1H, 2002 Growth rate Gross win +18% Operating profit +30% • Continuing benefit of GPT regime/recycling • Continuing strong growth in Numbers (eg virtual racing, FOBTs) and Football betting • Average number of LBOs increased from 1538 to 1580 due to acquisitions and new licences; 54 development actions • Tight management of costs (1) Includes traditional over the counter business, AWPs and FOBTs

  19. Gross win, £m Operating profit, £m 1H, 2003 1H, 2002 Telephone : Results1H, 2003 v 1H, 2002 Growth rate Gross win +3% Operating profit +14% • 170,000 active accounts (31 December 2002: 164,000) • Modest growth in gross win despite disappointing Cheltenham Festival and absence of international football championship • Costs down 3% compared to comparable period due to closure of Athlone call centre in April 2002

  20. Gross win, £m Operating profit, £m 1H, 2003 1H, 2002 Interactive (1) : Results1H, 2003 v 1H, 2002 Growth rate Gross win +32% Operating profit +42% • Sportsbook • 137,000 active accounts • (31 December 2002 : 130,000) • Focus shifting to UK rather than international markets • No international football championship • Casino • 58,000 (2) active accounts • (31 December 2002 : 43,000) • Successful launch of poker offering in January 2003 • Full integration of Sportsbook and Casino planned for Autumn 2003 (1) Sportsbook and Casino (2) Total Casino and Poker active accounts

  21. Cash Generation (pre exceptional items) 1H, 2003 v 1H, 2002 (1) Adjusted to eliminate accruals for exceptional costs and tax relief thereon

  22. Revised Data for Forecasts • Cost of debt 6% • Effective tax rates of 27% (FY 2003), 30% (FY 2004) • Projected investment in the business (1) To finalise whether all items of expenditure will be capitalised as opposed to written off as incurred

  23. Current Trading • Gross win up 23% in the nine weeks ended 2 September 2003 due to: • Better horseracing results than in the comparative period • Continuing roll out of FOBTs • Continuing growth in Football and Numbers betting

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