Case Study – Discover Leisure PLC 3 core objectives – Improve under-lying profitability – ability to service debt – Improve working capital management – Reduce debt holders total exposure Set within a framework of control (impact on rest of the industry) and declining economy

Case Study – Discover Leisure PLC Position in Q Start of market collapse – volumes off 20% TOTAL BANK DEBT £49m £16m Senior Debt exposure v. property valuations of £10m - £6m exposure £32m Stock funding including £8m with no recourse £1m of HP financing, predominantly through Senior Debt provider Operating from 17 sites – EBITDA FY 2008 £0.9m loss Position in Q TOTAL BANK DEBT £17m – debt reduced by 66%, debt serviced throughout (£3m) £10m Senior Debt exposure v. property valuations of £7m - £3m exposure £7m Stock funding including £3m with no recourse (but funding at 70% of cost) – no exposure PE backed Offers to acquire the business – Banks chose administration Operating from 6 sites – EBITDA 200k Summary – successful CONTROLLED WIND-DOWN

Case Study – Business Restructuring Actions Business restructuring actions/achievements:- – Closure of 11 poor contributing operations and exiting the business from the South [industry capacity removed] – CVA – compromised £10m of debt for £2.5m (primarily HMRC), removed 4 leasehold liabilities – no Bank write-downs; – Disposal of 7 surplus properties – generating £6m of proceeds for senior debt – Improved stock turn from 2.8 to overall stock reduced from £41m to £10m

Case Study – Operational Improvement Actions Operational improvements – Business re-engineering – Re-engineered business away from traditional department constraints removing £1.7m of costs (30% LFL); – Developed seasonal business structure – 15% of wage structure flexible – Installed a cost ownership with the business at all levels – reduced operating costs by £1.5m (32% LFL) Operational improvements – Business improvement – Business strategy focussed on growth and profit opportunities in service rather than commodities – LFL after-sales improved by 33% with margins improved by 17% to 46% – Built an own-brand retail insurance proposition from 0 to 2,500 customers in 12 months – Improved customer service rating to 89% and thereby reducing compensation costs by 29% and increasing market share (out-performed market by 3%)