Trading Statement

Diagonal PLC
9 October 2001




DIAGONAL plc ('Diagonal')

9th October 2001



TRADING STATEMENT



Diagonal announces that its Secure Networks Division, in particular the
network infrastructure element of the business, has recently experienced a
significantly reduced level of demand, following the seasonally quieter summer
period. Although the Secure Networks Division remains profitable, it will not
now achieve the strong level of profits previously anticipated for the second
half and the fourth quarter in particular.


The performance of the Consulting Division continues to be strong, despite the
rescheduling by two multinational customers of projects from later this year
into the early part of next. The overall level of forward business booked in
this division remains high.


In conclusion, the Board currently expects group pre-tax profits * for this
financial year to be similar to those of last year.


Graham Creswick, Chief Executive Officer, said:


'All of Diagonal's divisions remain profitable. We have a strong balance
sheet, with no borrowings and significant cash balances. I am pleased to
report that divisional management is taking steps to address margins and
costs, particularly in Secure Networks. This division is well placed to
recover when its markets improve'.


* Pre-tax profits before amortisation of goodwill




Enquiries:


Graham Creswick, Chief Executive Officer, Diagonal plc

Tel: [phone]


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