Final Results

Embargoed for release

                                                                  at 7.00 am on

                                                               9 December, 2004

                 Talent Group Plc ('Talent' or 'the Company')                  

                              Preliminary Results                              

                     for the year ended 30 September, 2004                     

Chairman's Statement

Results

I am pleased to report that your company has made progress both operationally
and financially during the year ended 30 September 2004. Turnover for the year
ended 30 September 2004 was £5,424,000 (2003: £2,919,000) on which a profit
before tax and goodwill of £15,000 was achieved, compared with a loss before
tax and goodwill of £390,000 for the year ended 30 September 2003. After the
amortisation of £119,000 of goodwill, a loss before taxation of £104,000 (2003:
loss of £480,000) was incurred.

The net cash balance - excluding cash held in trust for specific productions -
at 30 September 2004 was £364,000 compared to a balance of £286,000 at 30
September 2003.

Overview

Your company has continued to make progress in terms of the number of series
being produced and the number of meaningful ideas in development. Management is
focussed on developing series which provide genuine repeat opportunities,
greater stability of earnings and a platform for the structured growth of the
business, founded on a solid stream of income. Both Test the Nation and Best of
Friends grow as brands and there are some exciting new programmes in Talent's
pipeline for 2005 with You Be The Judge for the BBC and Made in LA for Sky.

The company has taken the opportunity to continue to invest in people with
proven industry skills and was pleased to announce the appointment of Mark
Linsey, Alexandra Henderson and Adam Hayes. A complete and balanced team has
now been assembled. It is well placed to take advantage of the changes in terms
of trade and the inevitable consolidation in the television industry.

Board Changes

Anne Miles joined the Board on 24 November 2003.

Colin Nicholl took the role of Finance Director on 23 December 2002 on a
temporary basis which became extended to two years. Having seen the company
through to pre-goodwill profitability, he plans to retire from this executive
position at the conclusion of the Annual General Meeting, which is due to be
held in February 2005. We thank him for his efforts, support and advice. A
successor is in the process of being recruited.

Enterprise Investment Scheme ('EIS')

A number of shareholders of the Company acquired ordinary shares in the Company
at the placing and admission of the Company's shares to AIM in April 2000 with
the benefit of EIS income tax relief. The investment has remained qualifying
and the three year holding period necessary under the EIS legislation has now
passed, allowing the scheme to qualify for the relief.

Current Trading and Outlook

It is difficult at this stage to determine precisely how much progress will be
made during the coming year. However, the Directors are cautiously confident of
a further satisfactory year's trading.

My thanks go to the Talent team, our advisers and shareholders for their
continued support in the last twelve months.

Robert J Benton

Chairman

8 December 2004

Managing Director's Review

As the Chairman has stated, this year was indeed a year of progress. Turnover
has increased and I hope that our move from an operating loss last financial
year to a small profit before tax and goodwill this year will be encouraging to
shareholders, particularly as this has been achieved in a competitive and
rapidly changing marketplace.

I am pleased to say that the management team we have at Talent is of the
highest calibre and capable of delivering and managing considerably more than
the company's current slate of activities. The objective now is to benefit
fully from this investment in people and to develop and utilise these resources
to grow profits for your company.

Production Highlights

Test the Nation continues to deliver good results for the BBC. In particular,
the Popular Music Test, which was scheduled against very strong opposition,
performed very well in the ratings. The BBC's faith in the brand is reflected
in the fact that The 2004 Test (End of Year) in December will be the tenth
event in the series and that we are already in negotiations for more events in
2005 and beyond.

Test the Nation - Japan. Talent also took the IQ Test to Japan for the second
time in November and is currently in talks about other topics for transmission
in 2005.

Best of Friends. As one of the first reality shows for children, this series
has been recognised as ground breaking. The first series of fifteen episodes,
which was aired in March 2004 on CBBC, was so well received that a second
series was in production by the summer. Currently in post production, this will
be delivered for a similar transmission slot in 2005. The BBC used this series
as a good example of Public Service broadcasting in its submission for the
Digital Channel and having seen the quality of series two in post production,
we are cautiously optimistic that the second series will not be the last.

Best of Friends has also been recognised on the international stage with
Teletoon France picking up the rights for French language versions of the show
in Europe and BBC Worldwide having taken on the distribution rights of the
format for the rest of the world.

Inside Clyde. Inside Clyde was one of Disney UK's first original series
commissions and our thirteen episodes began transmission in January 2004. The
series has been repeated a number of times and I am pleased to announce that it
has also been nominated for Best Children's Programme in the Broadcast Awards
2005. Disney's acquisition of Fox Kids (now renamed Jetix) and the subsequent
integration of the channel brands has resulted in a review of their local
programming requirements. Discussions are current with Disney on both a UK and
pan European basis regarding the future of the show.

Deep Toscana. This was a series of three documentaries, broadcast in the High
Definition format, on life in the medieval hill town of Anghiari (in Tuscany)
for Japan's state broadcaster NHK. Made in Japanese with a Japanese presenter
and commentary, this kind of series helps to maintain Talent's position as one
of the few foreign production companies which has direct access to Japan's main
broadcasters.

Casino Casino. A co-production with Gag Productions, this series of nineteen
half hour episodes generated very good audiences for the commissioning channel
Challenge? Noted for its high production values and unique approach it has
recently been re-commissioned for a second series of nineteen one hours!

Development

The development team has worked extremely hard over the past twelve months to
keep abreast of broadcaster requirements and find or create projects to fill
the gaps in the schedules. We have been fortunate to attract such able people
and I'm pleased to say that the high quality of our project development has
been commented on by various broadcasters. We expect to see the first fruits of
the team's labours either in pre-production or on-screen early in 2005.

In addition, we have also started to develop a number of projects of a more
serious `factual' nature. As this involves building an extended reputation with
a new group of commissioning executives, commissions in this field are more of
a medium term objective. However, we hope that by the end of 2005, we will have
opened the door to this genre and extended our reputation for `quality'
production from Entertainment and Kids to Factual.

Summary

I am delighted to say that our reputation of producing programmes of high
quality has not only been consolidated in Entertainment, but also extended to
Kids TV in the past twelve months. Whilst we will still acquire foreign formats
for production in the UK where appropriate, we now have a strong development
slate made up of our own `in-house' created formats and it is planned that more
of these will begin to flow through to commissions in the near future. The
international response to the Best of Friends format is an early indicator of
what can be achieved in format exploitation. However, our progress is best
reflected in the increased turnover for the financial period under review and
the movement from an operating loss last year to a small pre-tax and
pre-goodwill amortisation profit, as set out in these accounts.

With the market conditions likely to continue to change for the better, your
directors feel that Talent can look to the future with confidence.

 

Tony Humphreys

Managing Director

8 December 2004

Group Profit and loss account

For the year ended 30 September, 2004

                                         Note              Year          Year
                                                                             
                                                       ended 30      ended 30
                                                      September              
                                                           2004     September
                                                                             
                                                          £'000          2003
                                                                             
                                                                        £'000
                                                                             
Turnover                                                  5,424         2,919
                                                                             
Cost of sales                                           (4,210)       (2,244)
                                                                             
Gross profit                                              1,214           675
                                                                             
Operating costs                                         (1,213)       (1,083)
                                                                             
Goodwill amortisation                                     (119)          (90)
                                                                             
Administrative expenses                                 (1,332)       (1,173)
                                                                             
Operating loss                                            (118)         (498)
                                                                             
Net interest                                                 14            18
                                                                             
Loss on ordinary activities                               (104)         (480)
before taxation                                                              
                                                                             
Tax on loss on ordinary                                                      
activities                                                                   
                                                                             
- Current tax                                               (3)            19
                                                                             
- Deferred tax                                             (20)            30
                                                                             
Loss for the year                                         (127)         (431)
                                                                             
Basic loss per share (pence)               3            (0.79)p       (3.10)p
                                                                             
Diluted loss per share (pence)             3            (0.77)p       (2.77)p
                                                                             

The profit and loss account has been prepared on the basis that all operations
are continuing operations.

There were no recognised gains or losses other than the loss for the financial
period.

The accompanying accounting policies and notes form an integral part of these
financial statements.

Group balance sheet

As at 30 September, 2004

                                 30 September 2004       30 September 2003     
                                                                               
                                     £'000      £'000       £'000         £'000
                                                                               
Fixed assets                                                                   
                                                                               
Intangible assets                                 987                     1,106
                                                                               
Tangible assets                                    42                        41
                                                                               
                                                1,029                     1,147
                                                                               
Current assets                                                                 
                                                                               
Stocks                                  54                    109              
                                                                               
Debtors                                656                  1,139              
                                                                               
Cash at bank and in                                                            
hand                                                                           
                                                                               
- General                              364                    394              
                                                                               
- Controlled                           794                    366              
Productions                                                                    
                                                                               
                                     1,868                  2,008              
                                                                               
Creditors: amounts                 (1,534)                (1,658)              
falling due within one                                                         
year                                                                           
                                                                               
Net current assets                                334                       350
                                                                               
Total assets less                               1,363                     1,497
current liabilities                                                            
                                                                               
Creditors - amounts                              (11)                      (18)
falling due after more                                                         
than one year                                                                  
                                                                               
Net assets                                      1,352                     1,479
                                                                               
Capital and reserves                                                           
                                                                               
Called up share                                 6,310                     6,310
capital                                                                        
                                                                               
Share premium account                          11,634                    11,634
                                                                               
Profit and loss                              (16,592)                  (16,465)
account                                                                        
                                                                               
Shareholders' funds                             1,352                     1,479
                                                                               

Group cash flow statement

For the year ended 30 September, 2004

                                                 Year ended 30   Year ended 30
                                                September 2004  September 2003
                                                                              
                                                         £'000           £'000
                                                                              
Net cash inflow/(outflow) from                             510           (760)
operating activities                                                          
                                                                              
Returns on investments and servicing                                          
of finance                                                                    
                                                                              
Interest paid                                              (2)             (1)
                                                                              
Interest received                                           16              19
                                                                              
                                                            14              18
                                                                              
Taxation                                                   (1)             322
                                                                              
Capital expenditure and financial                                             
investment                                                                    
                                                                              
Purchase of tangible fixed assets                         (17)            (27)
                                                                              
Sale of tangible fixed assets                                -               -
                                                                              
                                                          (17)            (27)
                                                                              
Acquisitions                                                                  
                                                                              
Cash acquired with subsidiary                                -             573
undertaking                                                                   
                                                                              
Net cash inflow from acquisitions                            -             573
                                                                              
Financing                                                                     
                                                                              
Expenses paid in connection with the                         -           (180)
issue of share capital                                                        
                                                                              
                                                             -           (180)
                                                                              
Increase/(Decrease) in cash                                506            (54)
                                                                              

Notes to the preliminary Results

1. PUBLICATION OF NON-STATUTORY ACCOUNTS

The financial information set out in this preliminary announcement does not
constitute statutory accounts as defined in Section 240 of the Companies Act
1985.

The group balance sheet at 30 September, 2004 and the group profit and loss
account, group cash flow statement and associated noted for the year then ended
have been extracted from the Group's financial statements. Those financial
statements, on which the auditors have reported an unqualified opinion, have
not yet been delivered to the Registrar of Companies.

2. DIVIDENDS

The Directors are not proposing the payment of a dividend in respect of the
year ended 30 September, 2004.

3. LOSS PER ORDINARY SHARE

The loss per share is based on a loss of £127,000 (30 September, 2003: £
431,000), being the loss attributable to ordinary shareholders, and a weighted
average of 16,210,284 (30 September, 2003: 13,894,134 ordinary shares). The
diluted loss per share is based on a weighted average of 16,587,750 shares (30
September, 2003: 15,599,711).

4. Copies of REPORT AND ACCOUNTS

Copies of the Report and Accounts will be sent to shareholders shortly and will
be available to members of the public from the Company's registered office,
Lion House, 72-75 Red Lion Street, London, WC1R 4GB.

Enquiries

Talent Group Plc

Tony Humphreys Tel: [phone]

John East & Partners Limited

John East/Simon Clements Tel: [phone]

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