Interim Management Statement

Quarto Group Inc
24 April 2008



                             THE QUARTO GROUP, INC.


                          Interim Management Statement


Quarto (QRT.L), the fully-listed international specialist book publisher based
in London, announces its Interim Management Statement for the period since
January 1, 2008.


'Revenues, for the normally quiet first quarter, ended March 31, 2008, rose by
22% to £21.0 million (2007: £17.2 million), helped by a first time contribution
of £3.2 million from MBI, and improved sales in the co-edition segment, which
increased by 15% over 2007's first quarter.


Gross margin overall increased to 34% (2007: 33%), and operating profit almost
doubled to £268,000 (2007: £142,000). The interest charge increased to £0.9
million (2007: £0.6 million), reflecting the debt taken on for the acquisition
of MBI. The normal, seasonal loss (before amortization of non-current
intangibles, and non-recurring items) was £0.7 million (2007: £0.5 million).


'These results are very encouraging,' commented Laurence F Orbach, Chairman and
CEO of The Quarto Group. 'Looked at together with the trailing 12 months'
results, they suggest that our areas of book publishing (at least) are rising
above wider economic uncertainties. Our co-edition forward order book is 27%
ahead of the same time last year.


The first quarter accounts, typically, for no more than 18-20% of Quarto's
annual revenues. For the trailing 12 months, ended March 31, 2008, group
revenues increased to £103.8 million (2007: £92.9 million), operating profit, at
10.4% of sales, rose by 12% to £10.7 million (2007: £9.6 million) and pre-tax
profit, on the same basis, to £7.5 million (2007: £7.3 million). EBITDA
(earnings before interest, tax, depreciation, and amortization) rose to £20.5
million (2007: £18.0 million).


'We are not in the fiction publishing business, nor do we produce very many
high-profile non-fiction books. Our focus is on catering to special interest
audiences. We can only comment on our direct experience, of course, which is
that in both the US and the UK - the two major markets in which we publish and
hold book inventories - the reported sales of our titles through the cash
registers actually increased during the quarter, with the notable, and
anticipated, exception of the home improvement line. Generally, too, our
anecdotal information is that other publishers have had similar experiences.
Where there is weakness, it is visible only in the buying patterns of some
retail chains that, for their own reasons, appear to be hunkering down in
response to a more generally subdued retailing environment. As our art print
business continues to languish, along with most of that industry, we have taken
steps to dispose of our operation in Melbourne, Australia, and to eliminate its
losses.


'Virtually across the board, co-edition revenues were robust,' he continued.
'Taking this, together with the responses we received at two of the four most
important international book fairs - the Bologna Children's Book Fair, and the
London Book Fair - and, barring the appearance of unanticipated storm clouds,
these results point to the likelihood of another successful year for the group.


'Our strong sales of backlist titles continue to drive Quarto's good
performance. It's exciting to note that, in addition to the revenue that we are
beginning to derive from digital channels, our backlist looks likely to add
further licensing income from TV production, and other media, that wish to take
advantage of our deep well of solid content.'


A summarised trading statement to March 31, 2008 (before amortization of
non-current intangibles and non-recurring items) is set out below:

                   
                                   Three months            Trailing 12 months
                               2008            2007         2008         2007
                               £000            £000         £000         £000
Revenue                      20,956          17,244      103,819       92,906
                            ========        ========    =========     ========
Gross profit                  7,141           5,745       37,046       32,708
Overheads                    (6,873)         (5,603)     (26,360)     (23,141)
                           ---------       ---------   ----------   ----------
Operating profit                268             142       10,686        9,567
Interest                       (919)           (600)      (3,228)      (2,287)
                             -------         -------    ---------    ---------
Pre-tax result                 (651)           (458)       7,458        7,280
                             =======         =======      =======      =======
EBITDA                        2,797           2,335       20,476       18,047
                             =======         =======     ========     ========


There has been no material change in the financial position of the Group since
December 31, 2007'


Notes for Editors:

Quarto is an international book producer and publisher with two principal
strands of activity: it publishes, under imprints owned by the Group, books and
art prints in the US, the UK, and Australia; and it creates books that are
licensed to other publishers for publication under their own imprints in many
languages around the world.


In 2007, Quarto increased revenue by 7% to £100.1 million, adjusted EBITDA by
11% to £20.0 million, adjusted pre-tax profit by 5% to £7.7 million and adjusted
diluted earnings per share by 8% to 24.4p, proposing total dividends per share
up 6% at 7.15p.


Enquiries:

The Quarto Group, Inc.
Laurence Orbach (Chairman & CEO)                                020-7700 9003
Mick Mousley (Finance Director)                                 020-7700 9004

Bankside Consultants Limited
Charles Ponsonby                                                020-7367 8851




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