Interim Management Statement

19 April 2012

Ladbrokes plc announces its Interim Management Statement for the 3 months ended 31 March 2012 ("the period").

Group

·; Group net revenue (1) up 8.9%

·; Group operating profit (1)(2) of £50.4 million was 3.9% higher reflecting growth in UK and European Retail and the anticipated reduction in Digital due to a planned increase in investment

UK Retail

·; Machine net revenue up 21.7% with gross win per terminal week of £923 (Q1 2011: £791)

·; Continued resilience in OTC amounts staked which were up 0.6%

·; OTC gross win margin of 17.2% (Q1 2011: 17.2%)

Digital

·; Momentum in customer acquisition with continuing double digit growth in digital sign ups and actives

·; 22.4% growth in sportsbook net revenue driven by strong increase in stakes and increase in margin

·; Mobile now 20% of sportsbook amounts staked (Q4 2011: 15%)

·; Ladbrokes Bet in Play offering bets on more football matches than any other provider according to latest Gambling Compliance survey data

·; New website in live customer testing with full live launch set for May

·; New contract with Openbet enhances flexibility of development whilst further expanding games content

Richard Glynn, Chief Executive, commented:

"This has been another period of progress for Ladbrokes. UK Retail saw another quarter of strong growth in machines revenue. OTC staking remains resilient and gross win margin, helped by a better Cheltenham festival, was at the upper end of our historical range. We have invested considerably more in digital marketing and customer acquisition remains strong. We are starting to see this drive growth in the topline, particularly in the key focus area of UK sportsbook which was up 22%. Our football Bet In Play offer is now leading the market with up to 800 matches per week. We are continuing to deliver on our trading and digital milestones with further developments expected in the coming months. As stated in February, we are confident of delivering Digital profit growth during the second half of the year as the benefits from our investments converge. At this early stage of the year we are in line with the Board's expectations for the Group in 2012."

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UK RETAIL

UK Retail total net revenue increased by 9.0%.

Machines have continued to grow strongly with net revenue for the period up 21.7%. The average gross win per terminal week across the estate was £923 (Q1 2011: £791).

We have started to annualise the rollout of the new Global Draw terminals and remain confident in our ability to drive further growth through continued focus on operational excellence, increasing use of yield management techniques, a focus on new and exclusive games content and the introduction of the Odds On loyalty card in H2.

OTC amounts staked grew by 0.6% over the period despite a notable increase in horseracing cancellations from bad weather. The OTC gross win margin for the period was 17.2% (Q1 2011: 17.2%).

Operating costs in UK Retail for the full year remain in line with previous guidance (+3% LFL and +5% overall).

During the period we opened 10 new shops and closed 1.

EUROPEAN RETAIL

Net revenue in Ireland grew by 19.9% with the OTC gross win margin 2.9 percentage points stronger year on year helped by more favourable results at Cheltenham.

In Belgium operating profit was up 50.0% with shops continuing to benefit from the change in the tax regime introduced in 2011.

In Madrid, Sportium continues to grow with amounts staked up 16.8% and positive EBITDA for the region. We expect to begin trading in Valencia in Q2.

DIGITAL

Total Digital net revenue grew 5.9% during the period driven largely by progress in sportsbook.

We have significantly increased marketing investment, as planned, over the period and acquisition momentum has continued with sign ups and actives up strongly across sportsbook, casino, games and bingo.

An increase of 22.4% in sportsbook net revenue was driven by double digit growth of amounts staked and an improvement in margin year on year of 0.8 percentage points.

Bet in Play (excluding horseracing and greyhounds) is now 57% of sportsbook amounts staked (FY 2011: 49%). The most recent data compiled by Gambling Compliance showed Ladbrokes offering markets in more football matches than any other provider. In the final week of the period we offered Bet in Play markets in over 800 football matches. Further development of Bet in Play remains a key focus.

Mobile revenues continue to grow strongly with amounts staked 20% and net revenue 23% of the digital sportsbook during the period. We remain on track with the development of our new mobile platform which will launch in Q2.

Games net revenue grew in the period by 19.0%, driven by continued growth in actives and the benefit of increased content.

Casino net revenue fell in the period by 4.8%, a movement materially driven by losses to a number of high value customers in March. Actives in casino were up 76%.

Net revenue in poker was down 26.8% in the quarter with bingo marginally lower, 2.6% down. We are continuing to explore opportunities to improve the performance of both products with our existing content providers.

We have continued to make progress in enhancingour digital and trading capabilities. We will shortly begin trading using the new fieldbook, and are introducing further algorithmic pricing and trading tools. The new sportsbook is in customer testing and will be fully live in Q2. Our recently announced agreement with Openbet further improves our flexibility, giving us more control over future development and enables us to differentiate our offer, whilst also expanding our games content.

TELEPHONE 

Net revenue increased by 6.1% with the gross win margin ahead of Q1 2011.

HIGH ROLLERS

High Rollers generated an operating profit of £14.2 million (Q1 2011: profit of £4.4 million).

REGULATION UPDATE

In March the Budget confirmed the introduction of Machine Games Duty (MGD) from 1st February 2013

at a rate of 20% - higher than the neutral rate for bookmakers and the wider gambling industry. We are reviewing various measures to mitigate the impact, and as the tax was not intended to be revenue raising, the industry has requested a review of the level of MGD at the earliest opportunity.

Following changes to the rate of corporation tax in the Budget we have revised our tax guidance for 2012 and 2013 down by a further 1% to a P&L and cash rate of 12%.

MATERIAL EVENTS, TRANSACTIONS AND FINANCIAL POSITION

Net debt has further reduced by £55.6 million from £453.9 million at 31 December 2011 to £398.3 million at 31 March 2012. There were no other material events or transactions that impacted the Group's financial position during the period.

(1) Continuing operations, excluding High Rollers

(2) Profit before tax, net finance expense and exceptional items. Includes amortisation of customer relationships

Note: the figures in this trading update are unaudited.

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A conference call for analysts and investors will be held at 8am (BST).

To participate in the conference call dial, +44 (0)20 7136 2056 (UK participants) or +1 646 254 3367 (US participants), quoting confirmation code 6441915

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+1 347 366 9565 (US), confirmation code 6441915

Enquiries

Richard Glynn Matt Sharff

Chief Executive Officer Head of Investor Relations

Ian Bull Ciaran O'Brien

Chief Financial Officer Head of Public Relations

Tel. +44 (0) 7854 184 808