3rd May 2007

Games Workshop Group PLC ("Games Workshop" or the "Company")

ANNOUNCEMENT 3.5.07
Trading statement and cost reduction programme
Trading

Since our interim announcement and trading statement on 5 January 2007 the Group has continued to make sales progress in our more established markets (UK and Australia), with further evidence of promising developments in our US business. However, in Continental Europe we have continued to see sales declines, particularly in Germany and France. Management changes have recently been made in this area.

Consequently, our overall sales performance, particularly over the recent trading period, has not been as strong as expected and therefore profits are unlikely to meet market expectations for the year to May 2007.

The Board expects to announce the Group’s 2007 preliminary results on 31 July 2007.

Cost reduction programme

In view of the Group’s current trading performance the Board has decided to accelerate and intensify its programme of cost reduction in the business. During the next six months this programme will include:

• The closure of 35 loss-making stores
• The reorganisation of warehousing and manufacturing activities
• The centralisation of various sales support and back office activities

We expect this programme to result in a reduction of full time headcount of over 10% and to generate annualised cost savings of some £7m.

These changes will focus on the removal of administrative and back office activities from our sales businesses, leaving them better equipped to concentrate on and deliver sales growth.

The estimated cost of this programme is approximately £6m, which will be taken as an exceptional charge in the current financial year.

Continued investment in the business and dividend

In addition to this essential short term revenue investment of £6m to restore and strengthen the future profitability of the business, Games Workshop will continue to invest in opening new stores in growth areas and in other long term capital projects in the normal course of business. This reflects the Board’s continued confidence in the long term growth credentials of the business.

In order to retain funding flexibility and to avoid placing excessive short term strain on the Group’s finances, the Board does not intend recommending the payment of a final dividend for the current year.

Prospects

The measures set out above are designed to address short term issues. The Board remains confident in the long term future of the business and continues to focus on growing the Games Workshop Hobby throughout the world.

For further information, please contact:

Games Workshop Group PLC

Tom Kirby, Chairman and Chief Executive	0115 900 4001

Michael Sherwin, Finance Director		0115 900 4001

Rawlings Financial PR Limited

John Rawlings				0207 588 8287

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