Newsletter September 2009

Hello,

We have witnessed an unprecedented set of events in the financial markets over the past 12 months. Inevitably businesses across all sectors as well as consumers have been adversely affected. However, it seems in spite of the downturn in the economy, the level of interest from a wide range of clients across the Health & Leisure sector for our services has grown.

As a valued Gladstone client, we understand that you are constantly seeking greater value from the systems that you deploy. You expect to maximise the efficiency of your facilities and to be better positioned to recognise operating risks as well as opportunities. In short, you need the assurance and stability that guarantees long term support for your systems and operations going forward. Increasingly, Gladstone has witnessed that a large proportion of major operators across the Health & Leisure market are recognising the clear and demonstrable strength of Gladstone in providing the long term stability which senior executives strive for.

Because of this and other feedback, we have significantly re-evaluated Gladstone's client engagement and communications strategy. One result of this re-evaluation has been for our teams to engage in a deeper and ongoing interaction with our existing clients as well as potential new clients. I would like to take this opportunity to share with you some important developments in this respect, and explain how this will improve our relationship with you.

Earlier this year, I tasked our team with consulting in more detail with a large number of executives and senior managers across the industry in order to gain a greater insight into their current business challenges and opportunities, and in particular how they saw the future. During these discussions, across both public and private sectors, several key issues were highlighted. Not surprisingly, we found that the key priorities were to:

• Maximise efficiency through the use of competent systems and solutions
• Focus on member retention
• Deliver high value services

The most significant outcome of this dialogue was the desire from many businesses for a closer working relationship with Gladstone and other peer groups. It is clear that organisations value the opportunity to share best business practices, being kept up-to-date with new technical developments, and gaining a greater insight into how Gladstone's innovative business solutions can support and enhance their operations. It is our experience that such discussions enable health & leisure operators to discover ways to materially grow their business, make a critical difference to operational efficiencies and ultimately create and maintain a sustainable competitive advantage.

Another significant outcome was a general feeling that most clients wished to maintain regular dialogue with us throughout the year.

In response to this we have decided not to participate at LIW this year, but instead to reinforce our client-focused engagement plans through a three-pronged strategy in organising as well as participating in more frequent and regular regional meetings and events. Amongst other benefits, we hope this will create additional networking opportunities for everyone who attends.

In essence, our focus will be on getting closer to our clients.

To do this, we have identified that in addition to strengthening our relationships with strategic industry partners such as SpoRTA, we need to focus on regionally-managed events such as ISRM, CLOA and ILAM Ireland to enable Gladstone to meet all of those involved in our industry more regularly on a face-to-face basis. We believe that such meetings allow us to not only strengthen our relationship with a wider group of users, but also enable us to understand more fully the ongoing business challenges and opportunities facing facility operators, and ultimately to serve them better in the future as their business needs evolve.

Gladstone will also expand and fully support the independent Gladstone User Group client networks and their associated regional meetings throughout England, Scotland, Wales and Ireland. These client-administered User Groups have proven very successful in providing a practical forum for our clients to share best business practices throughout their leisure centre operations, whilst also providing Gladstone with valuable product development feedback which is factored into our different technology roadmaps.

Finally, we shall also be organising a number of Client Forums throughout the regions during the spring of 2010. These forums will focus on sharing with you and your staff some of the exciting new technological developments which we are currently working on and preview the latest technologies and services we will be bringing to market.

For an up-to-date list of the regional events which Gladstone Health and Leisure will be attending or organising, simply visit www.gladstonemrm.com/events

I am confident that our new client engagement plans delivered through a more proactive and regular networking program will provide a material difference to your business. Our goal, as always, is to ensure that you continue to benefit more rapidly from developments in new technologies and service solutions and have the ability to evaluate and deploy such solutions more effectively, thus maintaining your sustainable competitive advantage.

We look forward to communicating these plans with you more fully during the Autumn and meeting many of you over the coming months at these client engagement events.

Yours sincerely

Dr Said Ziai
CEO
Gladstone plc

8 September 2009