Trading Statement

Diagonal PLC
05 September 2003


5th September 2003


Diagonal plc ('Diagonal' or 'the Company')

Trading Update

Following the appointment of Colin Burnside as Chief Executive on 22nd July
2003, the Board has conducted a detailed review of operations and is now able to
provide the following trading update regarding the likely forecasted outcome for
the full year ending 30th November 2003.

Secure Networks

The Board is pleased to report that after the disruption of the aborted MBO,
this business unit has been stabilised and is expected to be profitable for the
full year.

Solutions

This business unit is performing ahead of our expectations.

SAP Consulting

The core SAP operations have been impacted during August by an unprecedented
number of project deferrals which will adversely affect the division's
profitability in the second half. The majority of these deferrals are a result
of business issues within a number of our major clients who have been forced to
postpone investment. Indications are that clients are deferring and not
cancelling projects.

Full year out-turn

As a result of the issues referred to above the Board believes that the results
for the full year will be significantly below market expectations. Management
has completed an exercise to reduce the underlying cost base across the Group.
The exceptional costs of this exercise and the aborted MBO are expected to
exceed £1.5M.

Finance Director

Since the management changes in July the Board has actively been seeking to
appoint a new Finance Director and hopes to make an announcement shortly.

Outlook

The Board remains confident of Diagonal's prospects in the next financial year
and beyond and does not feel that the unprecedented project deferrals currently
being experienced represent a general downturn in the wider SAP market. The
Board is pleased to report that the major SAP opportunities which were
identified earlier this year are progressing well and that the pipeline is at
its strongest ever.


Enquiries

Colin Burnside - Chief Executive                    Tel: [phone]

Shaun Dobson - Robert W Baird                       Tel: [phone]




Notes to Editors

Diagonal PLC provides a broad range of IT consulting services.  The Consulting
Division is one of the UK's leading implementers of SAP systems and has been
awarded SAP Partner of Excellence on each occasion it has been presented.  It
also specialises in Enterprise Application Integration and e-commerce skills.
The Secure Networks Division provides network and remote access security and
consultancy.




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