Acquisition

Dinkie Heel PLC
25 January 2005



                                DINKIE HEEL PLC
                           ACQUISITION AND PLACING

The Board of Dinkie Heel plc (the 'Company') is pleased to announce that it has
today acquired a majority interest in the issued share capital of Friedman's
Limited ('Friedman's'), which imports, converts and distributes plain and
bespoke lycra based materials, primarily to swimwear and dancewear manufacturers
within the textile industry.  Friedman's has approximately 200 customers,
predominantly in the UK, but the Board believe that there are opportunities to
export.  End users of Friedman's lycra products include, during the last
financial year, major high street chains.

Turnover of Friedman's as extracted from the audited accounts for the year ended
31 October 2004 was approximately £2.62 million.  Turnover has increased on
average in excess of 15 per cent. per annum during the last three years.  Gross
profit was £0.82 million and profit before tax was £0.32 million.  Friedman's is
based in Manchester and employs 5 staff. Net assets as at 31 October 2004 were
£0.47m.

The entire issued share capital of Friedman's will be acquired by Signature
Fabrics Limited, a company set up for the purpose of acquiring Friedman's ('
Signature'). The consideration payable for Friedman's by Signature is £1.7m in
cash and the issue of 5 per cent. of the share capital of Signature to the
Sellers. Signature is funded by bank finance of £1,221,000, £408,333 from the
Company in a subscription for loan stock, £91,666 from the Company in a
subscription for equity and the balance by an initial 20 per cent. equity
investment from the management of Signature.  The Company will initially hold a
75 per cent. equity stake in Signature which will reduce down on a ratchet basis
to 55 per cent. depending on the speed with which the Company's loan stock in
Signature is repaid.

The acquisition is in line with the Board's strategy stated in the circular to
shareholders of 26 March 2004 of investing in Management Buy-Out and Management
Buy-In opportunities with an overall value below £5 million. The Board's
intention is that target companies will be stable, profitable and cash
generative businesses with the potential for steady growth. The Board believes
this area of the market is currently underfinanced and contains many
opportunities.

In addition, the Board of the Company announces that it has placed 30,444,446
and intends to place a further 2,888,889 new ordinary shares of 0.1 pence each
in the Company (representing in aggregate approximately 18.71 per cent of the
enlarged share capital of the Company) at a price of 2.25p each, conditional
only upon admission of the new ordinary shares to trading on AIM.  Application
has been made to the London Stock Exchange for admission of the new ordinary
shares to trading on AIM.  Admission of the new ordinary shares is expected to
take place on Friday 28 January 2005.  Following the placing, the enlarged share
capital of the Company will comprise 178,154,127 ordinary shares.  A further
71,938,292 warrants are in issue, each of which entitles the holder to subscribe
for a new ordinary share at a price of 2p.

The 33,333,335 new ordinary shares are being placed for a total of approximately
£750,000 (before expenses) with clients of Seymour Pierce Ellis and a range of
investors, including members of the concert party detailed in the circular sent
to shareholders of the Company on 26 March 2004 (the 'Concert Party').  As a
result, the Concert Party, whose holding at that time represented 56.45 per
cent. of the entire issued share capital of the Company, will, if all of the
placing shares are placed hold ordinary shares representing 50.52 per cent of
the entire issued share capital of the Company.  The placing proceeds will in
the main be utilised to fund Signature for the acquisition of Friedman's with
the balance providing additional working capital for the Company.


Enquiries


Dinkie Heel plc, Tel: [phone]
David Horner
Peter Cook


City Financial Associates Ltd, Tel: [phone]
Tony Rawlinson
James Caithie


                      This information is provided by RNS
            The company news service from the London Stock Exchange