Proposed Disposal

Gresham Computing PLC
24 May 2001

Gresham Computing PLC

PROPOSED DISPOSAL
                                
                      GRESHAM COMPUTING PLC
                                
             PROPOSED DISPOSAL OF SIM GROUP LIMITED
                                
                                
The  Board of Gresham announces that it has agreed to dispose  of
the  entire  share capital of SIM Group Limited  to  SQS  for  an
initial consideration of at least £5.25 million for 50 per  cent.
of  the  issued share capital plus one controlling share,  and  a
deferred  consideration  for  the  remaining  shares.  The   main
highlights of the announcement are as follows:

* The proceeds of the Disposal will be used to repay bank debt
  and to invest in and develop Gresham's remaining businesses from
  a sound financial position.

* Deferred consideration predominantly based on a multiple of
  SIM's future revenues until 31st October 2001.

* Gresham will continue to have board representation  in  SIM
  Group and will receive a further dividend equivalent to 50  per
  cent.  of  the  profits after taxation generated by  SIM  until
  completion of the disposal by 30 June 2002 at the latest.

* Gresham's strategy is to continue to focus on the provision
  of technology-led business solutions to enterprise customers.

* The Disposal is conditional upon shareholder's approval  at
  an EGM.

Andrew Walton-Green, Chief Executive of Gresham said: 'SIM  is  a
fine business but it was always going to be worth more to someone
who has the resources to develop and exploit its service offering
as  widely  as possible.  We can now focus on growing the  unique
solutions and technology businesses that Gresham has and begin to
unlock the real potential that lies within.'
                                
For further information, please contact:

Gresham Computing plc                    on 24 May, 0207 601 1000
Andrew Walton-Green, Chief Executive      thereafter 01489 555522
Dean Osman, Finance Director

Square Mile BSMG Worldwide                          0207 601 1000
Edward Macquisten
Sally Lewis
                                
                                

INTRODUCTION

The  Board of Gresham announces that it has agreed to dispose  of
the  entire  share capital of SIM Group Limited  to  SQS  for  an
initial consideration of at least £5.25 million for 50 per  cent.
of  the  issued  share  capital plus one  controlling  share  and
deferred consideration principally based on SIM's future revenues
for  the  remaining  shares. In view of  its  size  the  proposed
Disposal is conditional upon the approval of the Shareholders.

Certain of the terms used in this announcement are defined in the
Appendix.

BACKGROUND TO AND REASONS FOR THE DISPOSAL

SIM  was  acquired  in  April 1999 in the  pursuit  of  Gresham's
strategy  at that time of growing organically and by acquisition,
by  adding a testing capability to its broad e-business solutions
portfolio. SIM specialised in the provision of automated software
testing services and testing contract staff.

During the first year after acquisition, SIM's turnover was lower
than  expected. As a result, the Directors engaged research  into
SIM's  customers' perspective of the business. This  subsequently
led  to  a  significant  change in SIM's  strategy  to  focus  on
becoming  an  integral part of a customer's  long  term  software
testing strategy, providing automated testing services.

Following this change, SIM has achieved a significant improvement
in turnover and profitability.

The  Directors  believe that SIM has considerable  potential  for
further  growth  but  that this potential will  be  more  readily
realised  by  SIM in combination with a larger and more  European
focused  testing group. The Directors consider that  there  is  a
close fit between the strategy and customer service ethos of  SIM
and  SQS  that should enable the potential of SIM to be  realised
more rapidly following the Disposal.

The  Group's  strategy  is to become a product-led  sales  driven
organisation focused on the provision of technology-led  business
solutions  to  enterprise customers.  The Disposal is  consistent
with this strategy.

The  proceeds  of the Disposal will be used to repay  bank  debt,
arrears of preference dividends and to invest in and develop  its
remaining  businesses to their potential from a  sound  financial
position.

INFORMATION ON SIM

SIM  provides automated and bespoke software testing services and
its  customer  base  is  predominantly in the  UK  financial  and
telecommunication services sector.

In the year ended 31 October 2000, SIM generated turnover of £4.5
million,  operating profit of £54,000 and profit  before  tax  of
£47,000,  (year ended 31 December 1999: turnover of £4.5 million,
operating profit of £64,000 and profit before tax of £36,000).

As at 31 October 2000, SIM had audited net assets of £629,000.

PRINCIPAL TERMS OF THE DISPOSAL

Gresham will, subject to shareholder approval, dispose of 50  per
cent.  of  the  issued share capital of SIM plus one  controlling
share  for an initial consideration of £5.25 million, which  will
be  received immediately after the Extraordinary General Meeting.
A  further  £750,000 will be  placed in escrow until  31  January
2002. Any amount due from escrow will be received in cash on that
date.  Gresham  will  receive  a dividend  immediately  prior  to
completion  equal to the excess of estimated net  assets  at  the
completion  date above £406,000.The Directors currently  estimate
the dividend will be approximately £700,000.

Gresham will dispose of the remaining issued share capital of SIM
Group Limited for the following deferred consideration:

(i)   a multiple of 1.5 times the revenue generated by SIM in the
   six  months  ending  31  October 2001 less  £1.5  million  and
   further  deferred consideration of 10 per cent. of the revenue
   generated by SIM in the twelve months ending 31 October  2002,
   subject to any price adjustment as described below; unless,

(ii)   SQS  completes  an  initial public offering  prior  to  31
   October  2001, in which case the deferred consideration  shall
   be  £7.9  million plus a further deferred consideration  of  3
   per  cent.  of  the  revenue generated by SIM  in  the  twelve
   months   ending  31  October  2002,  subject  to   any   price
   adjustment as described below.

The  disposal  of the remaining shares in SIM Group Limited  will
complete on the earlier of the date of the completion of any  SQS
initial   public  offering  and  30  June  2002.   The   deferred
consideration shall be receivable at Gresham's option in cash or,
subject  to  the receipt by SQS of appropriate German  regulatory
approval, Bonds which are convertible into ordinary shares in SQS
(at a pre-initial public offering price), or redeemable for cash.
The  further deferred consideration is receivable in cash  at  31
December 2002.

To  the  extent that SIM's revenue for the year ending 31 October
2001  falls  below  £10,450,000  then  a  reduction  (the  'Price
Adjustment') will be made to the overall price as follows:

For each £110,000 of such revenue falling below this amount there
will  be  a  price  reduction of £150,000 subject  to  a  maximum
overall  reduction  of £1,500,000. Up to £750,000  of  any  Price
Adjustment  will  be applied against the escrow account  and  the
remaining amount of any Price Adjustment will reduce the deferred
consideration.

In  addition,  Gresham will continue to have board representation
and will receive a further dividend from SIM equivalent to 50 per
cent. of the profits after taxation generated by SIM between  the
day following the Extraordinary General Meeting and completion of
the disposal of the remaining share capital of SIM Group Limited.

The  Directors  currently expect to take  part  of  the  deferred
consideration in the form of Bonds. Any decision to  convert  the
Bonds into shares in SQS will be taken by the Directors based  on
the circumstances prevailing at that time.

CURRENT TRADING AND FINANCIAL POSITION

In  the annual accounts for the year ended 31 October 2000, Group
turnover  was reported at £23.3 million with pre-tax loss  before
amortisation  of  goodwill at £3.6 million.  At  that  time,  the
Directors  expected a return to operating profitability  for  the
Group  for  the year ending 31 October 2001, taking into  account
SIM's  expected contribution to operating profit. However,  as  a
result  of  the Disposal, Gresham will not be able to  take  into
account   SIM's  full  contribution  to  operating   profit   and
accordingly,  the Board is no longer confident that an  operating
profit will be achieved for the year ending 31 October 2001.

The  Group  currently operates near to the limit of its  existing
borrowing  facilities. The initial cash proceeds of the  Disposal
will  be used to repay all of Gresham's bank debt and to pay  the
arrears of preference dividends of £132,000. The balance will  be
used  to  develop  the Continuing Group further and  for  working
capital purposes.

In  the  event that the Disposal does not complete, in  order  to
secure  that the Group has adequate working capital for at  least
the next twelve months, the Directors would have to seek to agree
with  the Group's bankers an extension to the existing facilities
beyond their current expiration dates and undertake the following
actions:

1.   seek additional borrowings from the Group's bankers or other
     third parties; or
2.   generate capital for the Group from disposals; or
3.   raise equity capital.

EXTRAORDINARY GENERAL MEETING

A  circular convening an Extraordinary General Meeting, at  which
the ordinary resolution necessary to approve the Disposal will be
proposed, will be posted to Shareholders shortly.


For further information, please contact:

Gresham Computing plc                    on 24 May, 0207 601 1000
Andrew Walton-Green, Chief Executive      thereafter 01489 555522
Dean Osman, Finance Director

Square Mile BSMG Worldwide                          0207 601 1000
Edward Macquisten
Sally Lewis

APPENDIX

In  this  announcement, the following definitions shall have  the
following meanings unless the context otherwise requires:

'Bonds'                         SQS convertible bonds

'Continuing  Group'             the Group following completion  of  the
                                Disposal

'Directors' or 'Board'          the directors of Gresham

'Disposal'                      the   proposed   disposal   by
                                Gresham   of   the  entire  issued   share
                                capital  of SIM Group Limited pursuant  to
                                the Share Sale Agreement

'Extraordinary General Meeting' the   extraordinary    general
                                meeting  of Gresham to be held to  approve
                                the Disposal

'Gresham' or 'Company'          Gresham Computing plc

'Gresham Group' or 'Group'      Gresham and its subsidiaries

'Ordinary Shares'               ordinary shares of 5p each  in  the
                                capital of Gresham

'Preference Shares'             13   per  cent.  gross  cumulative
                                convertible preference shares of 20p  each
                                in the capital of Gresham

'Share Sale Agreement'          the  agreement dated 23 May 2001 between
                                Gresham and SQS relating to the Disposal

'Shareholders'                  holders  of  Ordinary  Shares  and
                                Preference Shares

'SIM'                           SIM  Group Limited and  its subsidiaries

'SQS'                           SQS    Software   Quality Systems AG