Interim Results. 31 March VISIT OUR WEBSITE

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1 Interim Results 31 March 2007 VISIT OUR WEBSITE

2 Financial highlights 6 months to 31 March 2007 Like for like EBITDA up 4.1% to 256m Adjusted earning per share up 15.7% to 18.4 pence Interim dividend up 15.6% to 5.2 pence Average EBITDA per pub up 6.7% 70.6m shares purchased at a cost of 446m

3 EBITDA Like for like EBITDA growth of 4.1% 6 Months to 31 March Increase Year to 30 Sept Scotland Group Disposal Core Proforma Proforma m % 2006 Revenue 453 (3) Cost of sales (177) 1 (176) (172) (358) Gross profit 276 (2) Administrative expenses (18) - (18) (19) (36) EBITDA 258 (2)

4 Profit & loss account Adjusted EPS up 15.7% 6 Months to 31 March Increase m % Revenue EBITDA Depreciation (4) (4) Interest (105) (111) PBT (pre exceptional items) Taxation (44) (47) Profit after tax (pre exceptional items) Adjusted EPS (p) Dividend per share (p)

5 Gross margin analysis Increased margin on beer sales m Beer, cider 2006/07 - Core & fabs Licensee discounts Wines, spirits & minerals Rent Machines & other Total Turnover 317 * (25) * Cost of sales (160) - (13) (3) - (176) Gross profit 157 (25) Gross margin % 49.5% 2005/06 Proforma Turnover 301 (20) Cost of sales (155) - (13) (4) - (172) Gross profit 146 (20) Gross margin % 48.5% * Turnover and discounts both increased by 5m as a result of price alignments at March 2006

6 Cash flow statement Free cash inflow of 30m 6 Months to 31 March Year to 30 Sept m Operating profit Operating cash inflow Interest (98) (113) (227) Tax (35) (29) (69) Dividends (52) (42) (70) Pub capital expenditure (35) (26) (54) Other capital expenditure (2) (4) (7) Free cash inflow

7 Balance sheet Pub estate valued at 5.3 billion 31 March 30 Sept m Goodwill & Investments Pubs 5,332 5,277 5,377 Net debt (3,621) (3,516) (3,331) Net other liabilities (152) (156) (171) Deferred tax (691) (583) (692) Net worth 1,287 1,439 1,602 Cumulative expenditure on share buy backs

8 Share buyback First half progress Half 1 Half 2 Year (to date) No. m Share buybacks m Share buybacks Dividends Returns to shareholders Average purchase price per share

9 Debt structure 31 March 30 Sept m Corporate bonds (1,185) (1,185) (1,185) Bank debt (818) (468) (425) Securitised bonds (1,586) (1,754) (1,667) Gross debt (3,589) (3,407) (3,277) Cash Underlying net debt (3,504) (3,323) (3,166) Other (including mark to market of swaps) (117) (193) (165) Net debt (3,621) (3,516) (3,331)

10 Group leverage ratios March 2007 September 2006 Interest Cover 2.5x 2.4x Debt : EBITDA 6.5x 5.8x

11 Operating highlights 6 months to 31 March 2007 Like for like EBITDA up 4.1% to 256m Average EBITDA per pub up 6.7% to 33,300 35m capital expenditure invested into the estate 52 high quality acquisitions for 38m Surplus land, underperforming & HAUV pubs sold for 8m ( 4m profit) Scottish estate of 137 pubs sold 115m ( 13m profit) Operational reorganisation completed

12 Adjusted earnings per share Increase of 15.6% Half year Full year % increase in EPS 52% 33% 17% 17% 16% Dividend 2.8p 9.0p 4.5p 13.5p 5.2p Y-o-Y % increase 56% 50% 61% 50% 16% Dividend cover (adj EPS) 3.2x 2.5x

13 EBITDA per pub Increase of 6.7% Half year Full year EBITDA ( m) Ave Pub No. 8,687 8,651 8,594 8,522 7,747 EBITDA per pub ( k) Y-o-Y % increase 9.0% 8.3% 5.4% 5.2% 6.7%

14 Capital investment 31m of capital investment projects completed H1 FY07 FY06 (Full Year) Investment spend No of projects Total investment ( m) * No of projects Total Investment ( m) 200k k k k k Total , * Pub capital investment cashflow ( 35m) = Total investment ( 31m) + increase in the value of WIP ( 4m)

15 Acquisitions & disposals 52 individual and small batch acquisitions completed m 52 acquisitions (38) Disposals 8 Net cash outflow (30) Pub Cost ( k) No. Cost ( m) , , Total 52 38

16 Top quality assets Continued improvement in estate quality 40% 35% 30% 25% Mar-06 Mar-07 32% 30% 36% 39% 21% 26% Score definitions 1 Excellent 2 Good 3 Good average 4 Below average 5 Disposal 20% 15% 10% 5% 0% 8% 5% 3% 0% Source: Estates Review September 2006 (updated for churn)

17 Morning Advertiser Awards 2007 Community pub of the year Church House Inn, Bollington Fundraising pub of the year Brook House, Hayes Regional winner, Wales Castle Inn, Caldicot

18 Publican Awards 2007 Music pub of the year Brickmakers Arms, Norwich Promotional pub of the year Thorverton Arms, Devon

19 Licensee profitability How are they really doing 2,032 enquiries converted to 731 formal applications 959 fully funded, fully screened quality applicants 430 lease assignments, average premium 67k ( 84k including tenants fixtures and fittings) Rent concessions at 0.4% of rent roll 758 rent reviews, 1 settled at arbitration Rent reviews were completed at an average annual increase of 2.5% Bad debts remains constant at 0.1% of turnover

20 Growth in a tenanted estate Manage the pubs, the cash flow and the balance sheet Core growth in operating profit (target 3% growth) Invest and churn (target 10-15% return) Evaluate all acquisition opportunities Manage balance sheet leverage in line with profit growth and estate valuation Return spare cash to shareholders Double digit growth in EPS

21 Growth in a tenanted estate EPS growth (H to H1 2007) Normal EPS growth 11% (Organic, capex, churn and debt reduction) Strategic disposals (2)% (769 pubs & 137 Scottish pubs) Cost savings 3% (Overheads, interest and tax rate) Share buybacks 4% (net of interest) Adjusted EPS growth 16%

22 Refinancing Managing balance sheet leverage Tap existing securitisation (c 750m) Value tap of existing pubs Increase procurement fee Additional pubs (c450) Target Group leverage 7.0x to 8.0x debt: EBITDA Target completion Q1 07/08

23 Refinancing Objectives Create capacity for cash returns to shareholders Optimise amortisation profile Increase weighted average life Reduce interest costs Ensure operational flexibility Ensure financial flexibility (FRNs) Ensure low execution costs & ease of implementation Maintain corporate bond rating

24 Current issues Smoking REITs

25 Impact of smoking ban Growing consumer acceptance Total ban in Wales pubs - 2 April 2007 Total ban in England - 7,371 pubs - 1 July 2007 Quality pubs will cope best with the ban Outside Areas % of estate Wales England Beer garden & patio Beer garden only Patio/ other outside area No outside area Total Food Offering* % of estate Wales Englan d Restaurant Traditional bar meals Light snacks No catering Total * Based upon October 2006 Estates Review

26 REITs The options Sell / de-merge entire estate to a REIT Sell / de-merge part of the estate to a REIT Conversion to REIT

27 Sell/de-merge entire estate to a REIT Effectively a sale and lease back of all properties Assessment dependent upon property yield driving property sale value rent payable by Opco market valuation of Opco Advantage Immediate significant cash returns to shareholders Disadvantages Disposal of appreciating freehold assets Index linked rent payable Limited ability to return further cash to investors Restructuring costs

28 Sell/de-merge part of estate to a REIT Similar to a disposal of whole estate, just smaller Disposal of fewer appreciating freehold assets Less restructuring : less complicated Retains some flexibility Less immediate cash for shareholders

29 Conversion to a REIT Directing tax cash flows directly to shareholders Retain ownership of appreciating freehold assets Group exempt from corporation tax & CGT 90% of profit distributed to shareholders Adequate cash generation for capex & churn Initial entry cost of c 100m Exploring admission criteria with advisors

30 Summary 16% growth in adjusted earnings per share Strong cash generation 16% increase in dividend Cash available to buy back shares Improving pub quality and profitability Clear strategy for growth in shareholder value

31 Interim Results 31 March 2007 Appendix VISIT OUR WEBSITE

32 Restatement of 2006 EBITDA 40m EBITDA from Admiral disposal & Scottish disposal 2006 Adjustments* Restated 2006 m H1 H2 Year H1 H2 Year H1 H2 Year Revenue (36) (33) (69) Cost of sales (186) (201) (387) (172) (186) (358) Gross profit (22) (18) (40) Overheads (19) (17) (36) (19) (17) (36) EBITDA (22) (18) (40) * 769 pubs sold to Admiral Taverns on 6 th September 2006 & Scottish estate of 137 pubs sold on 4th December 2006