Final Results

Mercury Group PLC
31 March 2008


                 Mercury Group Plc ('Mercury' or 'the Company')


                           Results for the year ended
                              30th September 2007



CHAIRMAN'S STATEMENT


Introduction

I am reporting the results for Mercury Group plc for the year ended 30 September
2007.


The Group suffered a long period of instability during 2006 and the early part
of 2007, consequent upon the refinancing of the business in February 2007.
Since that date, all of the contentious issues have been resolved and the newly
constituted Board started the task of growing the Group's core business, SMPA,
both organically and by acquisition.


The Group's development since the new Board took up office in February 2007 has
been hindered by the significant downturn in the property sector, which started
to emerge during the summer of 2007 and the inability to raise additional equity
in the markets to fund acquisitions. Against this background, the Group
continued to incur losses in the year ended 30 September 2007, which have been
mitigated by making significant reductions in the Group's high historic overhead
cost base.


Group financial performance

The Group's turnover for the year ended 30 September 2007 was £2.7 million
compared with £5.6 million in 2006. SMPA incurred a loss before exceptional
items of £174,000 (after charging goodwill amortisation and impairment of
£121,000), compared with a profit of £51,000 in 2006. After much reduced central
costs of £499,000 (after charging goodwill impairment of £227,000), compared
with £1.6 million in 2006, the Group's loss on continuing activities before
exceptional items was £799,000.


The exceptional items incurred in 2007 of £451,000 relate to the fund raising
costs associated with the 2007 refinancing of £185,000, redundancy costs of
£50,000 and write-offs associated with the agreement of SMPA's earn out accounts
of £216,000. Net losses on discontinued operations amounted to £48,000 and
£15,000 was provided to write-off the Company's investment in Dialog Group Inc.
After charging interest of £60,000, the Group incurred a significantly reduced
loss before tax in 2007 of £1.3 million (2006: loss of £4.8 million).


The loss before tax for the year ended 30 September 2007 includes total goodwill
amortisation and impairment charges of £348,000. This comprises £79,000 for the
full impairment of goodwill arising on the acquisition of the CRC business
acquired in January 2007 and £269,000 for SMPA. Goodwill recorded on the Group
balance sheet at 30 September 2007 for SMPA is £812,000.


Continuing operations

SMPA continues to be the Group's core business offering a range of property
services to corporate clients. SMPA is a commercial property consultancy and
estate agency with over 50 years' experience providing a personal service to UK
and international clients.  With offices in the West End and City of London, it
offers a wide range of professional services including investment, development,
valuation, management and all aspects of occupancy. Although based in London, it
is able to service clients throughout the UK.


Discontinued operations

On 12 June 2007, the Company disposed of its shareholding in Telco Solutions
Limited for a net consideration of £8,500. Telco's business of project
management was considered by the new Board to be non-core. Subsequent to the
disposal, the acquiring company went into administration, with only £8,500 of
the contracted £85,000 of total consideration actually received. Telco Solutions
Limited was a loss making business throughout its period of ownership, incurring
operating losses of £60,000 in the year ended 30 September 2007 and £170,000 in
the year ended 30 September 2006.


Dividends

The Board does not recommend the payment of a dividend (2006: £nil).


Funding

In February 2007, the Board secured additional funding by issuing a loan note
instrument constituting £1,000,000 of Unsecured Loan Stock, which has all now
been drawn down.


Earn Out Accounts

The Board was pleased to report agreement of the earn out accounts on SMPA after
the year end with the vendor partners of that business. The total additional
consideration arising on the acquisition of SMPA was agreed at £182,000 of which
50% was settled by the issue of shares and 50% by way of convertible loan notes.


Directors

Following the 2007 refinancing, a number of changes were made to the Board. As
previously stated, I joined the Board as Chairman in February and I was pleased
to welcome Brian Basham and Andrew Lovelady who were appointed directors at the
same time. I was also pleased that both Walter Goldsmith and James Lugg remained
on the Board as non-executive directors and Ronnie Franks as Chief Executive
Officer.


Simon Michaels resigned from the Board as Finance Director on 13 February 2007
and I would like to thank him for his commitment and support. Andrew Lovelady
became part-time Finance Director in his place.


Management and employees

I would like to thank the Group's employees who have continued to work
tirelessly in spite of the Group's difficult trading conditions.


Proposed capital reorganisation and de-listing

Earlier today, the Company announced that it intends to effect a capital
reorganisation and seek shareholders' approval to cancel the admission of the
ordinary shares in the Company to trading on AIM. Full details are set out in a
circular to the shareholder's dated 31 March 2008, including notice of the
Extraordinary General Meeting of shareholders called to approve the proposals,
which is being posted today. Summary details of the proposals are set out below:


a)  Capital reorganisation

The Company presently has in excess of 3,700 Shareholders. This adds a
considerable cost to the overheads of the Company caused by the need to produce
annual accounts and registrar's costs. Over 60 % of shareholders have holdings
with a value of £3 or less. Accordingly, it is proposed that:


   • every 600 Existing Ordinary Shares will be consolidated into one new
     ordinary share of £6 each in the capital of the Company;

   • each new ordinary share of £6 each will be subdivided into 60 new
     ordinary shares of 10p each in the capital of the Company;

   • each of the issued ordinary shares of 10p each resulting from the
     consolidation will be subdivided and re-designated into one New Ordinary
     Share and one Deferred Share;

   • each of the authorised and unissued Ordinary Shares will be
     re-designated into one New Ordinary Share; and

   • all of the existing authorised but unissued deferred shares of 0.1p be
     and are hereby cancelled and the amount of the Company's share capital shall
     be diminished by the amount of the shares so cancelled.


b)  De-listing

The Directors consider that one of the principal obstacles to the development of
the Group is the cost of being a public company, which they estimate amounts to
over £150,000 per annum. Given the low market capitalisation of the Company and
the low liquidity of the Existing Ordinary Shares, the Directors consider that
it would be in the best interests of the Company to seek a de-listing of its
shares on AIM.


Current trading and prospects

Whilst trading in the first five months of the current financial year has been
in line with management expectations, your Directors cannot expect the Group to
be immune from the current situation in the property market.

George Kynoch
Chairman
31 March 2008




CONSOLIDATED PROFIT AND LOSS ACCOUNT
Year ended 30 September 2007


                            Notes  Continuing Discontinued     Total     Total
                                   Operations   Operations
                                         2007         2007      2007      2006
                                        £'000        £'000     £'000     £'000
________________________________________________________________________________

TURNOVER                        2       2,638           19     2,657     5,557

COST OF SALES                          (1,387)          (4)   (1,391)   (1,615)
________________________________________________________________________________
GROSS PROFIT                            1,251           15     1,266     3,942

Administrative expenses                (2,441)         (75)   (2,516)   (6,596)

OPERATING LOSS
________________________________________________________________________________
Before exceptional items        2        (739)         (60)     (799)   (2,092)
Exceptional items               3        (451)           -      (451)     (562)
________________________________________________________________________________

OPERATING LOSS AFTER
EXCEPTIONAL ITEMS                      (1,190)         (60)   (1,250)   (2,654)
Sale of subsidiary
undertaking                                 -           12        12    (2,133)
Amounts written
off investments                           (15)           -       (15)      (70)
Interest payable and
similar charges                           (58)          (2)      (60)      (17)
Interest receivable and
similar income                              -            -         -        95
________________________________________________________________________________
LOSS ON ORDINARY
ACTIVITIES BEFORE TAXATION             (1,263)         (50)   (1,313)   (4,779)
                                
                                           
Tax on loss on ordinary    
activities                                  -            -         -         -
________________________________________________________________________________
LOSS ON ORDINARY ACTIVITIES
AFTER TAXATION                         (1,263)         (50)   (1,313)   (4,779)
________________________________________________________________________________
LOSS FOR THE FINANCIAL YEAR            (1,263)         (50)   (1,313)   (4,779)
________________________________________________________________________________

Loss per ordinary share         4       (1.12)p      (0.04)p   (1.16)p   (4.39)p

Loss per ordinary share
on a diluted basis              4       (1.12)p      (0.04)p   (1.16)p   (4.39)p


There are no recognised gains or losses other than those passing through the
profit and loss account.



CONSOLIDATED BALANCE SHEET
At 30 September 2007

                                                               2007       2006

                                                              £'000      £'000
________________________________________________________________________________
FIXED ASSETS

Intangible assets                                               812      1,360
Tangible assets                                                  80         97
Investments                                                       -         50
________________________________________________________________________________
                                                                892      1,507
________________________________________________________________________________
CURRENT ASSETS

Debtors                                                         706      1,222
Cash at bank                                                    429         86
________________________________________________________________________________
                                                              1,135      1,308
CREDITORS: amounts falling due within one year                 (716)    (1,003)
________________________________________________________________________________
NET CURRENT ASSETS                                              419        305
________________________________________________________________________________

TOTAL ASSETS LESS CURRENT LIABILITIES                         1,311      1,812

CREDITORS: amounts falling due after more than one year      (1,091)         -
________________________________________________________________________________ 
NET ASSETS                                                      220      1,812
________________________________________________________________________________

CAPITAL AND RESERVES

Called up share capital                                       1,130      1,130
Share premium account                                           847        847
Shares to be issued                                              91        370
Distributable reserve                                         4,711      4,711
Other reserve                                                   156        156
Profit and loss account                                      (6,715)    (5,402)
________________________________________________________________________________
EQUITY SHAREHOLDERS' FUNDS                                      220      1,812
________________________________________________________________________________

                                                                  

Reconciliation of movement in consolidated shareholders' funds


                                                  30 September    30 September
                                                          2007            2006
                                                         £'000           £'000
________________________________________________________________________________

Loss for the financial year                             (1,313)         (4,779)

Decrease in shares to be issued                           (279)         (2,568)

Increase in share capital                                    -              65

Premium on shares issued                                     -             491
________________________________________________________________________________
Net movement in shareholders' funds                     (1,592)         (6,791)

Opening shareholders' funds                              1,812           8,603
________________________________________________________________________________
Closing shareholders' funds                                220           1,812
________________________________________________________________________________


CONSOLIDATED CASH FLOW STATEMENT
Year ended 30 September 2007

                                                   Note        2007       2006
                                                              £'000      £'000
________________________________________________________________________________

Net cash outflow from operating activities            A        (537)    (1,334)

Returns on investments and servicing of finance
Interest received                                                 -         95
Interest paid                                                   (60)       (17)
________________________________________________________________________________
Net cash (outflow)/inflow from returns on
investments                                                     (60)        78
and servicing of finance
________________________________________________________________________________

Taxation Paid                                                     -        (33)
________________________________________________________________________________

Capital expenditure and financial Investment
Payments to acquire tangible fixed assets                        (4)       (60)
Purchase of investments                                           -        (50)
Purchase of business                                  B         (50)         -
________________________________________________________________________________
Net cash outflow from investing activities                      (54)      (110)
________________________________________________________________________________

Acquisitions and disposals

Purchase of subsidiary undertakings                               -        (99)
Proceeds of disposal of subsidiary                    C           8        100
Net overdraft disposed with subsidiary                            -        291
Proceeds from the disposal of shares                             35          -
________________________________________________________________________________
Net cash inflow from acquisitions and disposals                  43        292
________________________________________________________________________________

Net cash outflow before financing                              (608)    (1,107)
________________________________________________________________________________
Financing

Net cash proceeds from share issue                                -        (38)
Capital element of finance lease                                  -         (4)
Loan note drawn down                                          1,000          -
________________________________________________________________________________
Net cash inflow/(outflow) from financing                      1,000        (42)
________________________________________________________________________________
Increase/(decrease) in cash in the year              D,E        392     (1,149)
________________________________________________________________________________



NOTES TO THE CONSOLIDATED CASH FLOW STATEMENT
Year ended 30 September 2007


A. RECONCILIATION OF OPERATING LOSS TO NET CASH OUTFLOW
    FROM OPERATING ACTIVITIES
                                                           2007           2006
                                                          £'000          £'000
________________________________________________________________________________
Operating loss                                           (1,250)        (2,654)
Depreciation charge                                          20             47
Loss on sale of assets                                        -              5
Goodwill amortisation and impairment                        348            869
Decrease in work in progress                                  -             80
Decrease/(increase) in debtors                              471            (56)
(Decrease)/increase in creditors                           (126)           375
________________________________________________________________________________
Net cash outflow from operating activities                 (537)        (1,334)
________________________________________________________________________________


B. PURCHASE OF BUSINESS

                                                                         £'000
________________________________________________________________________________
Assets acquired:
Tangible fixed assets                                                        4
Goodwill                                                                    79
________________________________________________________________________________
                                                                            83
________________________________________________________________________________
Settled by:
Cash paid                                                                   50
Deferred consideration                                                      33
________________________________________________________________________________
Cash received                                                               83
________________________________________________________________________________


C. SALE OF SUBSIDIARY UNDERTAKING
                                                                         £'000
________________________________________________________________________________
Assets disposed of:
Tangible fixed assets                                                        1
Debtors                                                                     45
Creditors                                                                  (50)
________________________________________________________________________________
                                                                            (4)
Surplus on disposal                                                         12
________________________________________________________________________________
Cash received                                                                8
________________________________________________________________________________


Telco Solutions Limited contributed £60,000 to the Group's operating cash
outflow and paid £2,000 in respect of net returns on investments and servicing
of finance.


D.  RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET DEBT

                                                           2007           2006
                                                          £'000          £'000
________________________________________________________________________________
Increase/(decrease) in cash in the year                     392         (1,353)
(Increase)/decrease in debt in the year                  (1,000)           204
________________________________________________________________________________
Movement in net debt in the year                           (608)        (1,149)
Opening (net debt)/funds                                    (16)         1,133
________________________________________________________________________________
Closing net debt                                           (624)           (16)
________________________________________________________________________________


E. ANALYSIS OF CHANGES IN NET DEBT

                             30 September       Cash flows        30 September
                                     2006                                 2007
                                    £'000            £'000               £'000
________________________________________________________________________________
Cash at bank                           86              343                 429
Bank overdraft                       (102)              49                 (53)
________________________________________________________________________________
                                      (16)             392                 376
Loan                                    -           (1,000)             (1,000)
________________________________________________________________________________
                                      (16)            (608)               (624)
________________________________________________________________________________



NOTES TO THE ACCOUNTS
Year ended 30 September 2007


1.  ACCOUNTING POLICIES

The financial information set out above has been prepared using accounting
policies consistent with 2006.

The financial information for the year ended 30 September 2007 and 2006 set out
above does not constitute statutory accounts within the meaning of section 240
of the Companies Act 1985. The information has been extracted from the statutory
accounts of Mercury Group plc for the year ended 30 September 2007, which have
not yet been filed with the Registrar of Companies. Statutory accounts for the
year ended 30 September 2006 have been delivered to the Registrar of Companies.
Statutory accounts for the year ended 30 September 2007 were approved by the
Board of Directors on 28 March 2008, are audited and will be delivered to the
Registrar of Companies following the Annual General Meeting on 1 May 2008.

The Company's auditors, Kingston Smith LLP, have reported on the 2007 and 2006
accounts under section 235(1) of the Companies Act 1985. Those reports were not
qualified within the meaning of section 235(2) of the Companies Act 1985 and did
not contain statements made under section 237(2) and 237(3) of the Companies Act
1985.


2.  SEGMENTAL ANALYSIS

                                                          2007            2006
                                                         £'000           £'000
________________________________________________________________________________
Sales
United Kingdom                                           2,657           5,557
________________________________________________________________________________
Sales
                                                                          
SMPA                                                     2,638           3,397
                                                                         
Discontinued operations                                     19           2,160
________________________________________________________________________________
                                                         2,657           5,557
________________________________________________________________________________
Operating profit/(loss)
                                                             
before exceptional items
                                                             
SMPA                                                      (174)             51
Discontinued operations                                    (60)           (589)
Central and plc related costs                             (499)         (1,590)
________________________________________________________________________________
                                                          (733)         (2,128)
Exceptional items                                         (517)           (526)
________________________________________________________________________________
Operating loss after exceptional items                  (1,250)         (2,654)
________________________________________________________________________________
                                                            
Operating net assets
                                                            
SMPA                                                       946           1,325
Discontinued operations                                      -              34
Central and plc related costs                             (102)            469
________________________________________________________________________________
                                                           844           1,828
Borrowings                                                (624)            (16)
________________________________________________________________________________
Net assets                                                 220           1,812
________________________________________________________________________________


3. EXCEPTIONAL ITEMS
                                                            2007          2006
                                                           £'000         £'000
________________________________________________________________________________
Operating items
Redundancies and employee termination costs                   50           242
Relocation costs                                               -            31
Deal abort costs                                               -           289
Re-financing costs                                           185             -
Write-offs on agreement of SMPA's earn out accounts          216             -
________________________________________________________________________________
                                                             451           562
________________________________________________________________________________

Non-operating items
________________________________________________________________________________
(Surplus)/loss on disposal of subsidiary undertaking         (12)        2,133
________________________________________________________________________________

There will be no tax impact related to this exceptional item due to the losses
for tax purposes.



4.  LOSS PER ORDINARY SHARE


Loss per share are calculated on the results shown in the table below. The basic
loss per share calculation are based on a weighted average number of ordinary
shares of 1p each of 112,975,684 (2006: 108,927,248). The diluted number of
ordinary shares of 1p each is 114,645,684 (2006: 111,112,248). The effect of the
share options on the calculation of the earnings per share was anti-dilutive.

                                                          2007            2006
                                                         £'000           £'000
________________________________________________________________________________
Continuing operations                                   (1,263)         (2,166)
Discontinued operations                                    (50)         (2,613)
________________________________________________________________________________
                                       Total            (1,313)         (4,779)
________________________________________________________________________________


5. POSTING OF REPORT AND ACCOUNTS


The 2007 Report and Accounts will be posted to shareholders on 31 March 2008 and
will be available from the Company's website www.mgplc.co.uk.


Contacts:

George Kynoch, Chairman, 020 7393 4000

David Worlidge, John East Partners Limited 020 7628 2200



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