Firm Placing & Open Offer

Volex Group PLC
06 June 2005


Embargoed until 07.01, 6 June 2005

                                 Volex Group plc
                          ('the Company' or ' Volex')

Proposed Firm Placing of 18,076,474 New Ordinary Shares and Placing and Open
Offer of 7,773,866 New Ordinary Shares at 73.5p per New Ordinary Share by
Evolution Securities

Volex, a leading independent producer of electronic and fibre optic cable
assemblies and electrical power cords services group, today announces that it
proposes to raise £15.8 million, net of expenses, by way of a Firm Placing and
Placing and Open Offer of, in aggregate, 25,850,340 New Ordinary Shares at 73.5
pence per share. The Company also announces that it has today entered into new
longer term bank facilities (the 'New Bank Facilities')

Summary of the fundraising:

    •    Raising £15.8 million, net of expenses, through the issue of 25,850,340
         New Ordinary Shares at 73.5 pence per share, through a proposed Firm 
         Placing and Placing and Open Offer with new and existing investors.

    •    The Issue is fully underwritten by Evolution Securities, the Company's
         broker and financial adviser.

    •    The Company has entered into New Bank Facilities on more favorable terms
         until March 2008.

    •    An EGM will be held on 29 June 2005 and, assuming all Resolutions are
         passed, the New Ordinary Shares are expected to commence trading on    
         30 June 2005

Commenting on the Issue, John Corcoran, Group Chief Executive, said:

'The proceeds of the Issue and the provision of the New Bank Facilities, will
enable the Directors to implement a strategy focused on restructuring and
investing in growth opportunities available to the Group. With a strong client
base, a global network and strengthened balance sheet, I believe that the scope
for delivering shareholder return is significant.'

Volex will host an analysts meeting today at 12 noon at the offices of: Allen &
Overy, One New Change, London, EC4M 9QQ

Enquiries:
Volex Group Plc                                                     01925 830101
Dom Molloy, Chairman
John Corcoran, Group Chief Executive
Derek Walter, Group Finance Director

Evolution Securities                                               020 7071 4300
Tim Worlledge, Matthew Wood

Weber Shandwick Square Mile                                        020 7067 0700
Chris Lynch/Nick Dibden

Evolution Securities Limited, which is authorised and regulated in the UK by the
Financial Services Authority and is a member of the London Stock Exchange plc,
is acting for Volex and no one else in connection with the Issue. Evolution
Securities Limited will not regard any other person as its customer in relation
to the Issue and will not be responsible to anyone other than Volex for
providing the protections afforded to its customers nor for giving advice in
relation to the matters described in this announcement.

Neither the Existing Ordinary Shares nor the New Ordinary Shares have been, or
will be, registered under the United States of America Securities Act of 1933
(as amended) (the 'Securities Act') or under the securities laws of any state of
the United States of America or qualify for distribution under any of the
relevant securities laws of Canada, Australia, Ireland or Japan. Accordingly,
subject to certain exceptions, the New Ordinary Shares may not be, directly or
indirectly, offered, sold, taken up, delivered or transferred in or into
Australia, Canada, Ireland, Japan or the United States, except, to the extent
such offer or sale is made into the United States, where such offer or sale is
made as part of an offshore transaction meeting the requirements of Regulation S
under the Securities Act or pursuant to another exemption from, or in a
transaction not subject to, the registration requirements of the Securities Act.

Certain statements in this announcement relating to the Issue are forward
looking statements. By their nature, forward looking statements involve a number
of risks, uncertainties and assumptions because they relate to events and/or
depend on circumstances that may or may not occur in the future and could cause
actual results to differ materially from those expressed in or implied by the
forward looking statements. These include, among other factors: conditions in
the markets and market position, financial position, tax rates, cash flows,
return on capital and operating margins; anticipated investments and capital
expenditures; changing business or other market conditions; and general economic
conditions. These and other factors could adversely affect the outcome and
financial effects of the plans and events described herein. Forward looking
statements contained in this prospectus based on past trends or activities
should not be taken as a representation that such trends or activities will
continue in the future. Subject to any requirement under the Listing Rules,
neither the Company nor Evolution Securities Limited undertakes any obligation
to update or revise any forward looking statements, whether as a result of new
information, future events or otherwise. You should not place undue reliance on
forward looking statements, which speak only as of the date of this
announcement.

                                Volex Group plc
                    ('the Company', 'the Group' or ' Volex')

  Proposed Firm Placing of 18,076,474 New Ordinary Shares and Placing and Open
   Offer of 7,773,866 New Ordinary Shares at 73.5p per New Ordinary Share by
                              Evolution Securities

1. Introduction
The Board announces today that the Company proposes to raise £15.8 million, net
of expenses, by way of a Firm Placing and Placing and Open Offer of, in
aggregate, 25,850,340 New Ordinary Shares at 73.5 pence per Ordinary Share. The
Issue comprises 18,076,474 Firm Placing Shares, which have been placed firm
primarily with new and existing institutional investors and 7,773,866 Open Offer
Shares have been placed with new and existing investors subject to a right of
recall to satisfy valid applications from Qualifying Shareholders under the Open
Offer. Qualifying Shareholders are being given the opportunity to participate in
this fundraising by way of the Open Offer, which is being made by Evolution
Securities on the Company's behalf. Under the Open Offer, 7,773,866 New Ordinary
Shares are being offered to Qualifying Shareholders on the basis of:

  5 Open Offer Shares for every 19 Existing Ordinary Shares held at the Record
                                      Date

and so in proportion to any number of Existing Ordinary Shares then held.

The Issue Price represents a discount of 9.3 per cent. to the prevailing
mid-market price of 81 pence per Existing Ordinary Share immediately prior to
the announcement of the Issue at the close of business on 3 June 2005, the
latest practicable time prior to the announcement of the Issue.

The Issue has been fully underwritten by Evolution Securities and is subject to
Shareholder approval. A prospectus containing a notice of EGM is expected to be
dispatched to Shareholders today.

As stated in the Company's trading update in February 2005, the Company has been
in discussions with the Banks to replace the Company's Existing Bank Facilities
with a new facility or facilities. The Company today announces that it has today
entered into new longer term bank facilities on more favourable terms to the
Company (the 'New Bank Facilities'), conditional on completion of the Issue.

Shareholders should be aware that if the Resolutions relating to the Issue are
not approved at the EGM and Admission does not take place on 30 June 2005, the
net proceeds of the Issue will not be received by the Company and the Company
will not be able to draw on the New Bank Facilities. The Existing Bank
Facilities expire on 30 June 2005 and the Company would no longer have banking
facilities and would not have adequate working capital to continue trading from
that date.

The Directors consider that in the scenario outlined above, the withdrawal of
the Existing Bank Facilities would not be in the best interests of either the
Banks or the Company and believe that the Existing Bank Facilities would be
extended for a short period beyond 30 June 2005 whilst they were renegotiated
for a longer period to enable the Company to continue trading. The Directors
believe, however, that such renegotiated facilities would be on substantially
worse terms than both the Existing Bank Facilities and the New Bank Facilities,
in particular in regard to interest rate, use of free cash and repayment
scheduling. Accordingly, the Directors unanimously recommend that Shareholders
vote in favour of the Resolutions to approve the Issue.

2. Information on Volex Group

The Business
Volex Group is a leading independent producer of electronic and fibre optic
cable assemblies and electrical power cords. The Group currently operates from
forty facilities located strategically in Asia, Europe and North and South
America, providing global support to leading producers of computers,
telecommunications systems and networking devices. In addition, the Group
assembles wiring assemblies and harnesses for consumer electronics and
appliances, medical and industrial applications and for the transportation,
defence and aerospace industries.

Products
The Company manufactures a wide range of cable assembly solutions that can be
categorised into three broad product groupings - power products, signal cable
assemblies and multifunction cable harnesses.

Power Products            Volex produces and supplies a wide range of power 
                          cords and cable assemblies finished to OEM 
                          specification. Volex has safety approval certification 
                          for over 20 countries. Volex's power products are used 
                          in computer products, medical products, electrical and 
                          electronic consumer products and industrial tools and 
                          equipment. Power products accounted for 45 per cent. 
                          of the Group's turnover in the 52 week period ended 
                          3 April 2005 (2004: 41 per cent.)

Signal Cable Assemblies   These products carry signals within and/or between
                          equipment for applications such as communications,
                          networking and computing products and medical/
                          industrial equipment. The majority of these cable
                          assemblies are custom designed. Overall, signal cable 
                          assemblies represented approximately 43 per cent. of 
                          turnover in the 52 week period ended 3 April 2005
                          (2004: 46 per cent.). They are subdivided into the 
                          following:

                          Industry Standard
                          Volex offers an extensive range of 'industry standard' 
                          cable assemblies for the communications and computer 
                          market, by which is meant, products which operate in
                          accordance with standardised industry parameters. The  
                          cable assembly is also customised in its design, for 
                          example by reference to length, angle of connector, 
                          moulding and colour. Volex cable assemblies are used 
                          in, inter alia, networking products, servers and 
                          storage systems, internal switching and industrial 
                          products.

                          High Speed
                          Volex offers a range of standard and custom high speed 
                          cable assemblies, including Fibre Channel and 
                          InfiniBand, to a number of OEM customers. Cable
                          assemblies are engineered to meet the stringent 
                          electrical and mechanical requirements of industry 
                          standard specifications and are increasingly being 
                          used in system area networks, parallel processing 
                          applications and server storage systems.

                          Radio Frequency
                          Volex offers a range of radio frequency cable 
                          assemblies including flexible, conformable, semi-
                          rigid, corrugated and phase matched assemblies. These 
                          products are used within switching devices, industrial 
                          automation, telecoms networks, testing and measurement 
                          and antenna products.

                          Fibre Optic
                          Volex offers custom designed fibre optic cable 
                          assemblies. These products are used within Sonet/SDH 
                          Devices, networking cables, switching devices and base
                          stations.

Multifunction Cable 
Harnesses                 These hybrid products have both power and signal
                          transmission capabilities within the cable harness. 
                          Overall, multifunction cable assemblies represented 
                          approximately 12 per cent. of turnover in the 52 week
                          period ended 3 April 2005 (2004: 13 per cent.). 
                          Multifunction cable harnesses include specialist 
                          wiring harnesses, which Volex designs, manufactures 
                          and supplies for use in commercial and off-road 
                          vehicles and aerospace and defence applications,
                          and multifunction cable assemblies for a variety of 
                          other applications including medical and industrial 
                          markets.

In the 52 weeks ended 3 April 2005, the Group's turnover was spread across five
different business sectors: Data/Telecommunications 39 per cent. (43 per cent.:
2004); Consumer Appliances 20 per cent. (18 per cent.: 2004); Consumer
Electronics 19 per cent. (17 per cent.: 2004) Vehicles and Aerospace 12 per
cent. (13 per cent.: 2004); and Medical/Industrial 10 per cent. (9 per cent.:
2004).

The Directors believe that the breadth of Volex's product portfolio provides a
significant competitive advantage to the Group. This broad range of products
enables Volex to service a wide range of customer product supply requirements
and offer the customer an opportunity to utilise Volex as its consolidated
supplier of products across the cable assembly spectrum.

Geographical Locations
The Group is headquartered in Warrington, United Kingdom. It operates regional
centres in Castlebar, Ireland to service the European signal cable assembly
market, in Quincy, USA to service the North American market, and in Singapore to
service the Asian and South American power product and signal cable assembly
markets. The Singapore regional centre also manages the European power product
business. Each regional centre manages its multi-site regional operations. In
addition, the Group's specialist wiring harness businesses are based in the
United Kingdom and service predominantly a UK/European customer base. The Group
currently operates from some 42 locations across the World. Of these, 25 are
manufacturing centres and the majority of these centres also house sales
offices; 8 are engineering/sales/logistics support units; and 9 are purely sales
offices. Turnover by geographic location for the 52 weeks ended 3 April 2005 was
26 per cent. for Europe (excluding the UK) (24 per cent.: 2004), 16 per cent.
for the UK (17 per cent.: 2004), 31 per cent. for the Americas (31 per cent.:
2004) and 27 per cent. for Asia (28 per cent.: 2004).

The average number of employees employed by the Group in the 52 week period
ended 3 April 2005 was 10,059 (2004: 9,297).

Customers
Volex has a worldwide base of multinational customers, including Ericsson,
Nortel Networks, Alcatel, Lucent Technologies Qualcomm, Cisco Systems, HP, IBM,
Dell, StorageTek, Solectron, Flextronics, Celestica, Jabil, Canon, Philips,
Apple, Epson, Lexmark, Black & Decker, LG Electronics, Panasonic, Electrolux,
Invensys, Johnson and Johnson, GE Medical Systems, Case New Holland, Komatsu,
JCB, Rolls Royce Aero Engines and BAE systems. This customer base spans a wide
range of sectors, each of which utilises the broad range of cable assembly
solutions offered by the Group. This broad spread is reflected in the fact that
the Group's top ten customers account for only 42 per cent. of the Group's
turnover.

3. Background to and reasons for the Issue

Following several years of achieving sustained revenue growth, the Group
experienced a significant downturn in demand for its product ranges between 2001
and 2003. During this time the Group's revenue fell 45 per cent. to £230.1
million in 2003 with operating profit (before exceptional items and impairments)
falling 98 per cent. to £0.6 million. In the 52 weeks ended 4 April 2004 revenue
increased to £238.4 million and operating profits to £2.5 million.

This downturn was principally caused by difficulties within the
telecommunications and server market, to which the Group had significant
exposure. As demand for wire line and wireless infrastructure was depressed, a
number of operators and carriers experienced financial difficulties which led to
limited investment in networks by both carriers and enterprises. Furthermore
demand for information technology server and networking products remained low,
as a result of depressed prices and low-cost entrants and developments in the
server segment of high-speed copper technologies.

The Group has also experienced a number of exceptional circumstances which
affected the financial performance of the Company. These included the rise in
commodity prices, in particular copper which rose approximately 65 per cent.
between 1 November 2003 and 31 March 2005. This rise in price was at a rate
which the Group has been unable to pass onto its customer base in full. In
addition, a fire in the Group's Tijuana, Mexico factory in September 2004
severely impacted the North American division's operational efficiency.

The downturn in the Group's trading has meant that the level of debt within the
Group has restricted the financial flexibility of the Group. Although £4.0
million of debt has been repaid over the past 2 years, the Group has not been
able to generate sufficient cash flow to invest in the future growth of the
Group's business or to complete the restructuring of the Group and to meet all
of its previously agreed debt repayments which had been rescheduled by agreement
with the Banks.

The Directors believe the Issue will provide the Group with the financial
security to enable it to invest in the restructuring of the operational cost
base and in the future growth of the business. Further, the Company has entered
into the New Bank Facilities which, if they become unconditional, provide an
element of stability and certainty on the funding structure of the Group for the
next 3 years, to June 2008. These new facilities are conditional on the Issue
becoming unconditional and will allow the Group greater financial flexibility
during this period.

4. Strategy of the Group

The Directors have in recent years pursued a strategy of realigning costs
commensurate with actual and projected levels of turnover and restructuring the
operations of the Group to meet the changing market challenges and
opportunities. This strategy has, however, been limited by the financial
resources available to the Group as set out above. Following receipt of the net
proceeds of the Issue and the provision of the New Bank Facilities, the
Directors intend to implement a three-year growth plan focused on restructuring
and investing in the growth opportunities available to the Group. These key
strategies within this growth plan are set out below:

   • Reduce the number of manufacturing locations. The Group currently
     operates 25 manufacturing locations worldwide, which the Directors believe
     can be reduced by shifting to larger factories in low cost areas in order
     to maximise economies of scale. Furthermore, where manufacturing does not
     provide any level of differentiation, the Group plans to outsource
     production utilising the Group's sourcing and supply chain strengths. By
     reducing the Group's manufacturing footprint and concentrating capacity in
     low cost regional locations, the Directors believe the Group can reduce its
     cost base without adversely affecting service levels for its customers as a
     whole.

   • Improving the operational performance of the Group by reorganising
     under-performing divisions and geographical areas within the Group,
     principally by realigning reporting lines and streamlining the organisation.
     The approach will be to leverage the specific strengths of key management
     teams across the wider Group whether on a product or market basis, with a
     particular focus on improvement on the Asian signal cable assembly and 
     North American power product businesses.

   • Further develop sourcing competence at the component layer and establish
     sourcing competence at the assembly level. The Directors intend to develop
     the functional capabilities of the Group principally by investing in its
     engineering teams to reconfigure, standardize and/or substitute existing
     supplies to effect cost reduction. This will also allow the Group to
     increase its outsourcing capabilities. In addition, the Group will invest in
     its supply chain management resources to improve the performance of its
     supply base and to reduce inventory, for example through further development
     of its vendor managed inventory ('VMI') programme.

   • Develop new markets to increase revenue. The Directors intend to
     supplement the existing global customer account management team with
     additional resources to increase the Group's marketing and technological
     expertise. New markets to be targeted include the medical market, the low
     frequency radio base station market and the industrial market. The medical
     and industrial markets today account for 10 per cent. of Group turnover and
     the Directors believe they provide significant opportunities for the Group.
     Progress has already been made in the development of key medical accounts
     and the industrial customer base is growing strongly. In the case of the 
     low frequency element of the telecommunication base station market, as an
     example one of our largest customers has an annual cable assembly spend of
     some £15 million, which the Directors believe again represents an area of
     opportunity for the Group.

   • The Group has demonstrated competence in product design, especially
     where the functionality and design of the assembly is not dependent on
     customer specified componentry, and has already secured a number of 
     specific programmes in this way. The Group will increasingly focus on 
     product development opportunities, particularly within the Powercord arena 
     where a number of new product opportunities exist requiring investment. The
     Directors believe investment in new products will help the Group to  
     increase its product margins and to develop a differentiating strength for 
     the Group.

   • Build alliances to expand the product set and technology offering. This
     will allow the Group to access low cost manufacturing and technical
     competence to facilitate new product development and/or fill product
     portfolio gaps. The Group will thereby be able to access new customers, new
     markets and/or increase its service to global customers with reduced costs
     or risk. The Group is already in discussion with a major Asian cable
     manufacturer in this regard.

5. Current Trading and Prospects

The Company has today released its unaudited preliminary results for the 52 week
period ended 3 April 2005, extracts from this statement are set out below:

'After the downturn experienced through late 2001, Volex Group has taken
significant actions to reduce debt and return to profitability. Having achieved
a revenue peak of £418 million in FY2001, the Group experienced a dramatic
decline to £230 million in FY2003 and has improved from that low point to close
the last financial year (2005) at a revenue level of £245 million. Despite the
limited access to funds, a number of key actions have been undertaken over this
period:

• Gross borrowings have been reduced from £72 million to £45 million;
• Gross margins have recovered from a low of 11.6 per cent. to 2005 levels of
  14.5 per cent. through reductions in material costs and labour cost reductions
  by moving to lower cost areas;
• Facilities have been closed and manufacturing transferred to low cost
  locations and under- utilised assets have been disposed of;
• A strong global purchasing function has been established;
• The global account team was enhanced and has delivered momentum to the
  emerging medical and industrial business which has grown to 10 per cent. of
  Group revenue; and
• New management and systems have been introduced to the harness businesses
  (Wiring Systems and Ionix).

The financial year 2005 had been expected to improve further on these
achievements. The Group delivered revenues in 2005 at a level of £245 million
which, when the effects of currency translation are removed was a growth year on
year of 8 per cent. The Group has benefited from the general improvement in the
demand across most of the markets that we service but has also made significant
strides in developing new business opportunities in targeted markets such as the
medical sector. The broadening of the customer base in existing and new markets
remains a key focus for the Group and reduces the impact of cyclical demand
patterns in any one sector.

However, while the market demand profile supported the revenue ambitions of the
Group the translation of those revenues to operating profit was disappointing
and was impacted by unanticipated events, some of which were one-off in nature.

• The escalation of commodity prices, particularly copper and petroleum,
  impacted the Group by circa £6 million in profit. While the sales teams have
  been successful in passing some of these effects through to the customer base,
  there was a lag between the supply base increases and the successful 
  conclusion of negotiations with those same customers.

• The turnaround of North America division was adversely impacted by an
  unsuccessful change in management, resulting in a failure to achieve the 
  product transfer and margin improvement targets for the business, and by a 
  fire in one of two buildings in Tijuana, Mexico that created loss of sales in 
  the period.

On a positive note, the Group has already addressed many of these areas and, the
better performing divisions achieved operating margins of 6 per cent. plus in
the year. Operationally the Group recovered the Tijuana fire impact successfully
and the speed and effectiveness of that recovery bears testament to the ability
of the Group to manage significant events without impacting the supply line to
the customer base. The Group has changed the leadership of North America
(October 2004) and positioned one of the non-executive directors back into the
regional leadership position. The Group has built a new team and strengthened
sales, engineering and operations. The Group has developed a strong global
purchasing function that has mitigated the full effect of rising commodity
prices by materials savings secured elsewhere in the supply chain.

Despite the limited access to funds the Group continued to focus on cost
reduction, re-profiling the manufacturing footprint and the level of debt within
which the Company had to operate. In the year three further facilities were
announced for closure: Conover (US), Malaysia and Philippines. The Group
strengthened its focus and resource allocation in global account management to
penetrate new markets, new accounts and the existing accounts for incremental
revenues, some of which were already realized in the reported year.'

With a strong client base, a global network and strengthened balance sheet
following the Issue, the Directors believe that the scope for delivering
improved shareholder returns is significant and remain positive on the prospects
and outlook for the Group during 2005.

6. Board Changes

The Group also announces today that, conditional upon Admission, it will be
immediately appointing two new directors, Craig Mullett and Heejae Chae ('the
Proposed Directors').

Both Craig and Heejae have extensive knowledge of the cable and interconnector
markets, having both been for five years, senior executives with the Amphenol
Corporation, a NYSE listed company and the world's third largest producer of
electronics connectors, cables and interconnect systems.

Craig, aged 36, who was the director of business development at Amphenol, will
be joining the Group as a non-executive Director. He will assume responsibility
for a number of special projects and will work with the executive team in
implementing and developing, as necessary, the strategy described in this
announcement for returning the Group to profitability. Craig is currently
President of Branison Group, a corporate finance firm located in Connecticut,
USA.

Heejae, aged 36, was worldwide general manager of the Radio Frequency Group of
Amphenol. He will become Chief Operating Officer and will work with the Chief
Executive in the implementation of the strategy, taking responsibility for the
improvement of the manufacturing operations.

With the changes that are now taking place within the Group and having been with
the Group for over 15 years, Dom Molloy will be resigning as Chairman and
retiring from the Board following the EGM. The Group has already commenced a
search for a new non-executive Chairman, who needs to have experience of running
a multinational business and, in particular, has been involved in corporate
restructurings in the past. The Company hopes to have identified and be able to
appoint a new non-executive Chairman before the AGM in September 2005. For the
interim period until that appointment, David Beever, who has been a
non-executive Director since 2002, will assume the role of Chairman.

7. Principal Terms of the Issue

The Issue

Under the Issue, the Company intends to raise £19.0 million, comprising
approximately £13.3 million by way of the Firm Placing and approximately £5.7
million under the Placing and Open Offer (in each case before expenses).
Qualifying Shareholders are being given the opportunity to participate in the
fundraising by way of the Open Offer, which is being made by Evolution
Securities as agent for and on behalf of the Company.

Due to the size of the fundraising relative to the current market capitalisation
of the Company, the Directors believe it is necessary to broaden the shareholder
base of the Company through a non pre-emptive issue by way of the Firm Placing
in order to raise the necessary funds.

Under the Issue, 30 per cent. of the New Ordinary Shares are being offered to
Qualifying Shareholders pursuant to the Placing and Open Offer and 70 per cent.
are being placed firm (subject, inter alia, to the conditions set out below)
with certain new and existing investors pursuant to the Firm Placing in order to
provide such investors with certainty as to the minimum number of New Ordinary
Shares they will receive. The Directors believe that this has been an important
factor in attracting these investors to support the Issue. The Directors also
consider that all Ordinary Shareholders should have the opportunity to
participate in the Issue to mitigate and reduce the dilutive effect of the Firm
Placing on Ordinary Shareholders and consequently, the Issue also comprises the
Open Offer.

The Issue Price represents a discount of 9.3 per cent. to the prevailing
mid-market price of 81 pence of an Existing Ordinary Share on 3 June 2005
immediately prior to the announcement of the Issue.

The Issue has been fully underwritten by Evolution Securities. The Issue is
conditional upon the Placing Agreement having become unconditional in all
respects and not having been terminated in accordance with its terms. The
Placing Agreement is conditional, inter alia, upon the satisfaction of the
following conditions:

(i) the passing of the Resolutions at the Extraordinary General Meeting; and

(ii) Admission becoming effective by not later than 8.00 a.m. on 30 June 2005
(or such later time and/or date as the Company and Evolution Securities may
agree being not later than 3.00 p.m. on 30 September 2005).

Application has been made to the UK Listing Authority for the New Ordinary
Shares to be admitted to the Official List and application has been made to the
London Stock Exchange for the New Ordinary Shares to be admitted to trading on
its market for listed securities. It is expected that Admission will become
effective and that dealings will commence in the New Ordinary Shares at 8.00
a.m. on 30 June 2005. The Existing Ordinary Shares are listed on the Official
List and traded on the London Stock Exchange.

None of the New Ordinary Shares have been marketed or been made available in
whole or in part to the public in conjunction with the application for Admission
other than pursuant to the Open Offer. The New Ordinary Shares will, when
issued, rank pari passu in all respects with the Existing Ordinary Shares,
including the right to vote and receive dividends and other distributions
declared following Admission.

The Firm Placing

The Company proposes to raise approximately £13.3 million (before expenses)
through the issue of the Firm Placing Shares at the Issue Price, which
represents a discount of 9.3 per cent. to the closing mid-market price of 81
pence of an Existing Ordinary Share on 3 June 2005, being the last dealing day
prior to the announcement of the Issue. The Firm Placing Shares represent 70 per
cent. of the Issue and will represent 32.6 per cent. of the Company's issued
share capital immediately following Admission.

The Placing and Open Offer

As stated above, the Board wishes to allow existing Ordinary Shareholders to
participate in the Issue. Accordingly, Qualifying Shareholders are being given
the opportunity to participate in the Issue by way of an Open Offer. The Company
intends to raise approximately £5.7 million (before expenses) from the issue of
the Open Offer Shares which represents approximately 30 per cent. of the funds
the Company intends to raise pursuant to the Issue. Pursuant to the Placing,
Evolution Securities has conditionally placed the Open Offer Shares (other than
the Committed Shares) subject to a right of recall in order to satisfy valid
applications for Open Offer Shares received from Qualifying Shareholders.

Evolution Securities, on behalf of the Company, is inviting Qualifying
Shareholders to apply for Open Offer Shares under the Open Offer at the Issue
Price payable in full on application, on the basis of:

           5 Open Offer Shares for every 19 Existing Ordinary Shares

held by such Qualifying Shareholders and registered in their names on the Record
Date and so in proportion for any other number of Existing Ordinary Shares then
held.

Fractional entitlements to Open Offer Shares will not be allotted to Qualifying
Shareholders and no cash payment will be made in lieu of fractional
entitlements, which will be aggregated and allotted to placees under the Placing
for the benefit of the Company. Accordingly, the entitlement of Qualifying
Shareholders will be rounded down to the nearest whole number of Open Offer
Shares.

To the extent that Evolution Securities is unable to procure placees for the
Open Offer Shares at the Issue Price, Evolution Securities has agreed to
subscribe itself, as principal, at the Issue Price for any Open Offer Shares for
which valid applications are not received from Qualifying Shareholders under the
Open Offer.

To be valid, completed Application Forms and payment in full must be received by
3.00 p.m. on 27 June 2005. Application Forms are personal to Qualifying
Shareholders and may not be transferred except to satisfy bona fide market
claims. Qualifying Shareholders should be aware that the Open Offer is not a
rights issue and, therefore, any Open Offer Shares not applied for under the
Open Offer will not be sold in the market for their benefit Any person who is in
any doubt as to his/her tax position or who is subject to tax in a jurisdiction
other than the United Kingdom should consult an appropriate professional adviser
immediately.

8. Related Party Transaction

Owing to the size of its shareholding in the Company, Cycladic Capital
Management who holds approximately 12.6 per cent. of the Existing Ordinary
Shares, is deemed to be a related party of the Company for the purposes of the
Listing Rules. The issue of 5,645,510 Placing Shares to Cycladic Capital
Management under the Firm Placing will be a transaction with a related party for
the purposes of the Listing Rules, and will require separate approval by the
Shareholders at the EGM by way of the Ordinary Resolution. Cycladic Capital
Management has undertaken that it will not, and will take all reasonable steps
to ensure that its associates (as defined in the Listing Rules) will not, vote
on the Ordinary Resolution.

9. Irrevocable undertakings and Directors' intentions

Placing and Open Offer
All of the Directors who currently hold Ordinary Shares have irrevocably
undertaken to take up in full their Open Offer Entitlement under the Open Offer
and, in addition, certain of the Directors also intend to participate in the
Firm Placing. Accordingly, the Directors intend to subscribe for, in aggregate,
445,596 New Ordinary Shares, representing 1.7 per cent. of the Issue.
Furthermore, the Proposed Directors, Heejae Chae and Craig Mullett, intend to
participate in the Firm Placing in respect of, in aggregate, 1,158,000 New
Ordinary Shares, which, together with the Directors participations, will
represent a total of 6.2 per cent. of the Issue.

Voting
Those Directors who have an interest in Existing Ordinary Shares have each
irrevocably undertaken to the Company and Evolution Securities that they, having
a beneficial and non beneficial interest between them in aggregate of
approximately 0.83 per cent. of the Existing Ordinary Shares, will vote in
favour of the Resolutions.

Cycladic Capital Management, which holds 3,710,000 Ordinary Shares, has
irrevocably undertaken to the Company and Evolution Securities that it will
abstain, and will take all reasonable steps to ensure that its associates (as
defined in the Listing Rules) abstain from voting in respect of the Ordinary
Resolution relating to the related party transaction.

10. Share Option Schemes

Holders of options under the Share Option Schemes are not entitled to
participate in the Open Offer. Under the rules of the Share Option Schemes, the
Directors may make such adjustments to the number of Ordinary Shares under
option and to the exercise prices to take account of certain variations in the
capital of the Company as they see fit. Any such adjustments may, in accordance
with the rules of the relevant Share Option Scheme, be subject to written
confirmation from the auditors of the Company that such adjustments are, in
their opinion, fair and reasonable and also, where applicable, subject to HM
Revenue & Customs approval. If any such adjustments are made, holders of options
under the Share Option Schemes would be notified of any such adjustment in due
course.

The Remuneration Committee has begun a review of the Company's management
incentive arrangements. It intends to discontinue the practice of granting share
options to senior executives (including Directors). In its place it will
introduce a long term share incentive plan under which it will conditionally
award shares in the Company which will only vest three years later if
predetermined corporate performance targets have been achieved. In due course,
detailed proposals will be put before Shareholders in General Meeting for
approval.

11. Extraordinary General Meeting

The Prospectus (containing Listing Particulars) to be sent to Shareholders today
in connection with the Issue, accompanied by a Form of Proxy fur use at the EGM
and an Application Form for use in connection with the Open Offer, contains a
notice convening the EGM to be held at 11.00 a.m. on 29 June 2005 at the offices
of Allen & Overy LLP, One New Change, London EC4M 9QQ, at which the Resolutions
will be proposed for the purposes of approving the Issue.

At the EGM, Resolutions will be proposed to:
   • increase the authorised share capital of the Company;
   • authorise the directors to allot and issue, inter alia, the New Ordinary
     Shares;
   • disapply the statutory pre-emption rights in respect of the allotment
     and issue of, inter alia, the New Ordinary Shares pursuant to the Firm
     Placing; and
   • approve the issue of 5,645,510 Firm Placing Shares to Cycladic Capital
     Management pursuant to the Firm Placing as a related party transaction for
     the purposes of the Listing Rules.

12. Necessity for Shareholder approval

In making an assessment of their voting intentions, Shareholders should be aware
that if the Resolutions relating to the Issue are not approved at the EGM and
Admission does not take place on 30 June 2005, the net proceeds of the Issue
will not be received by the Company and the Company will not be able to draw on
the New Bank Facilities. The Existing Bank Facilities expire on 30 June 2005 and
the Company would no longer have banking facilities and would not have adequate
working capital to continue trading from that date.

The Directors consider that in the scenario outlined above, the withdrawal of
the Existing Bank Facilities would not be in the best interests of either the
Banks or the Company and believe that the Existing Bank Facilities would be
extended for a short period beyond 30 June 2005 whilst they were renegotiated
for a longer period to enable the Company to continue trading. The Directors
believe, however, that such renegotiated facilities would be on substantially
worse terms than both the Existing Bank Facilities and the New Bank Facilities,
in particular in regard to interest rate, use of free cash and repayment
scheduling. In these circumstances, the Company would not be in a position to
implement the strategy described in this announcement. Indeed, in order to
secure ongoing facilities, the Company may have to sell some or all of its
trading subsidiaries to realise funds to repay some or all of the outstanding
loans within the Existing Bank Facilities, albeit, that such funds realised may
be insufficient to repay all of the outstanding loans. This would greatly
diminish the value of the Group and accordingly, the Directors unanimously
recommend that Shareholders vote in favour of the Resolutions to approve the
Issue.

13. Recommendation

The Board, which has been so advised by Evolution Securities, considers the
Resolutions, including the transaction with the related party, to be fair and
reasonable so far as Shareholders are concerned and in the best interests of the
Company and its Shareholders as a whole. In providing advice to the Board,
Evolution Securities has taken into consideration the Directors' commercial
assessment of the Issue.

Accordingly, the Directors unanimously recommend that Shareholders vote in
favour of the Resolutions (save for Cycladic Capital Management and its
associates (as defined in the Listing Rules) in respect of the Ordinary
Resolution) to be proposed at the Extraordinary General Meeting, as they have
irrevocably undertaken to do in respect of their own beneficial and
non-beneficial shareholdings, which amount to 245,740 Ordinary Shares
(representing approximately 0.83 per cent. of the Company's current issued share
capital).

                      EXPECTED TIMETABLE OF PRINCIPAL EVENTS

Record Date for entitlement under the Open Offer                                close of business on 3 June 2005

Posting date of the prospectus and the Application Form                         6 June 2005

Latest time and date for splitting Application Forms (to satisfy bona fide 
 market claims only)                                                            3.00 p.m. on 25 June 2005

Latest time and date for receipt of completed Application Forms and payment in 
 full in respect of the Open Offer                                              3.00 p.m. on 27 June 2005

Latest time and date for receipt of Forms of Proxy for the Extraordinary 
 General Meeting                                                                11.00 a.m. on 27 June 2005

Extraordinary General Meeting                                                   11.00 a.m. on 29 June 2005

Dealings expected to commence in the New Ordinary Shares                        30 June 2005

Delivery in CREST of New Ordinary Shares to be held in uncertificated form      30 June 2005

Despatch of definitive share certificates in respect of New Ordinary Shares to 
 be held in certificated form                                                   By 7 July 2005

                                ISSUE STATISTICS

Number of Existing Ordinary Shares                                              29,540,692

Number of New Ordinary Shares being issued pursuant to the Firm Placing         18,076,474

Number of New Ordinary Shares being issued pursuant to the Placing and Open 
 Offer                                                                          7,773,866

Issue Price                                                                     73.5 pence

Net proceeds of the Issue                                                       £15.8 million

Number of Ordinary Shares in issue following Admission                          55,391,032

New Ordinary Shares expressed as a percentage of the Existing Ordinary Shares   87.5%

Market capitalisation of the Company at the Issue Price following Admission     £40.7 million

Words and expressions where defined in the Prospectus to be issued by the
Company and dated 6 June 2005 shall, unless the context requires otherwise, have
the same meaning in this document.






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