Trading Update & Board Change

Diagonal PLC
24 May 2004




FOR IMMEDIATE RELEASE                                              24 May 2004





Diagonal Plc


TRADING UPDATE AND BOARD CHANGES


Trading update


Approaching the end of the half year to 28 May 2004, the Board expects that
profit before tax, exceptional items and goodwill for the first six months will
be in accordance with the guidance given at the time of the last preliminary
results announcement and it is therefore expected to exceed the level achieved
in the second half of the year ended 28 November 2003.


In addition, the results for the first half year will benefit from an
exceptional credit of approximately £250,000 as a result of the settlement of
the commercial dispute referred to in the results for last year.


Looking forward, the Board notes that although Diagonal's markets have seen some
improvement, not all sectors and geographies have experienced these better
trading conditions. The Board is confident in its strategy for developing the
group's businesses but recognises that some further reduction in costs may
become necessary.


In reviewing the prospects for the year as a whole, the Board has concluded that
while it expects Diagonal's recovery to continue, this progress will be
insufficient to meet current market expectations.


Diagonal will announce its interim results on 13 July 2004 and will give a
detailed update on all aspects of the business at that time.



Board changes


The Board announces that, due to health grounds, Colin Burnside has decided to
step aside as Chief Executive Officer. Colin was one of the original founders of
Diagonal and became CEO in July 2003. It is expected that Colin will continue to
make available to Diagonal his substantial industry experience and high level
contacts.


Malcolm Gloak has been appointed Executive Chairman with immediate effect.
Malcolm joined the board in June 2003 and became non-executive Chairman in March
2004. He will remain as Executive Chairman until a new Chief Executive is
appointed. It should be noted that in recent months Diagonal's operational and
financial management team has been strengthened with new Managing Directors
appointed to each of the operating divisions and Martin Andrews appointed as
Finance Director.



                                      Ends





Enquiries:

Diagonal:  Malcolm Gloak, Chairman           01252 736 600 or 07976 439 651
           Martin Andrews, Finance Director  01252 736 680 or 07739 517 699

Bankside:  Steve Liebmann                    020-7444-4163 or 07802-888159








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