Related Party Transaction, Placing and Issue of...

Milestone Group Plc
                         ("Milestone" or the "Company")

             Related Party Transaction, Placing and Issue of Equity

Milestone  Group PLC (AIM: MSG), the AIM quoted digital solutions and technology
agency, announces the issue of, in aggregate, 28,318,584 ordinary shares of 0.1
pence  each in  the capital  of the  Company (the  "Ordinary Shares") to Deborah
White and Guy van Zwanenberg (together the "Related Parties") in satisfaction of
accrued but unpaid remuneration under their respective terms of engagement.

Further  details of  the share  issue are  set out  below. Ms  White and  Mr van
Zwanenberg are existing directors of the Company.

+---------------------+---------------+------------+----------+----------+
|Name of Related Party|   Number of   |Amount being|Resultant |Resultant |
|                     |Ordinary Shares|satisfied[1]|Holding of|Percentage|
|                     | to be Issued  |            | Ordinary |Holding of|
|                     |               |    (£)     |  Shares  |  Issued  |
|                     |               |            |          | Ordinary |
|                     |               |            |          |  Shares  |
+---------------------+---------------+------------+----------+----------+
|Deborah White        |  26,106,195   |  295,000   |34,883,774|  16.22%  |
+---------------------+---------------+------------+----------+----------+
|Guy van Zwanenberg   |   2,212,389   |   25,000   |3,323,500 |  1.55%   |
+---------------------+---------------+------------+----------+----------+
|Total                |  28,318,584   |  320,000   |38,207,274|  17.77%  |
+---------------------+---------------+------------+----------+----------+

[1] Based on the most recent placing price of 1.13 pence per Ordinary Share. The
Company's  closing middle market share  price on 16 December 2010 was 1.30 pence
per Ordinary Share.

The  issue of the Ordinary  Shares to the Related  Parties, as set out above, is
considered  to be a related party transaction under the AIM Rules for Companies.
The  independent director of the Company  (being Anthony Moss) considers, having
consulted  with Strand Hanson  Limited ("Strand Hanson"), that  the issue of the
Ordinary Shares is fair and reasonable insofar as the Company's shareholders are
concerned.

In  addition,  Milestone  announces  that,  in  accordance with the terms of the
Company's engagement letter with Strand Hanson in relation to its appointment as
Nominated Adviser to the Company, the Company has allotted a further 400,000 new
Ordinary Shares to Strand Hanson at a deemed aggregate value of £5,000, based on
a price of 1.25 pence per Ordinary Share.

The  Company also announces the issue  of 15,000,000 Ordinary Shares to HBS 049
Limited, at a deemed aggregate value of £159,000, based on a price of 1.06 pence
per  Ordinary Share, in  respect of the  conversion of the  outstanding loan and
accrued  interest thereon in accordance with the terms of the Loan Agreement, as
announced  on  31 March  2010. Following  this  conversion,  HBS  049 Limited is
interested   in,   in   aggregate,   30,000,000 Ordinary   Shares,  representing
approximately  13.95 per  cent.  of  the  enlarged  issued  share capital of the
Company.

The  Company announced on 8 June 2010 that the  repayment of the loan in the sum
of  £160,000, previously disclosed  in Milestone's annual  accounts for the year
ended  30 September 2009 as a post balance sheet  event, had been extended to 1
December  2010. Repayment  of  this  loan  is  currently being renegotiated. The
Directors  are of the view that an appropriate repayment schedule will be agreed
with  the lender  that will  not adversely  impact the Company's working capital
requirements.

Milestone  has also  agreed to  issue 1,966,337 Ordinary  Shares to Mr Cormac A.
Crawford,   at  a  deemed  price  of  1.13 pence  per  Ordinary  Share,  raising
approximately £22,220. Following admission, Mr Crawford will hold, in aggregate,
18,954,772 Ordinary  Shares,  representing  approximately  8.81 per cent. of the
enlarged issued share capital.

The  proceeds of this placing will be used to provide additional working capital
and  to reduce the Company's existing liabilities.  As previously announced, the
Company  continues  to  actively  manage  its  liabilities and is reliant on its
ability  to  manage  the  timing  of  settlement of such liabilities and further
fundraisings will be required in the short term.

Application will be made for, in aggregate, 45,684,921 new Ordinary Shares to be
admitted  to trading  on AIM,  which is  expected to  occur by no later than 29
December  2010.  The new  Ordinary Shares  will rank  pari passu in all respects
with the Company's existing Ordinary Shares.

Following  the above  mentioned share  allotments, Milestone  will have in issue
215,033,881 Ordinary  Shares with voting  rights. The Company  does not hold any
Ordinary  Shares in treasury.  The figure  of 215,033,881 Ordinary Shares may be
used  by shareholders in the Company as  the denominator for the calculations by
which they will determine if they are required to notify their interest in, or a
change  in their interest in,  the share capital of  the Company under the FSA's
Disclosure and Transparency Rules.

So  far as the Company is aware,  and subject to any new notifications received,
the  following  persons  will  have  a  notifiable  interest in the issued share
capital of Milestone following the above share allotments:


+-----------------------+-------------------------+----------------------------+
|                       |   Current percentage    |Resultant percentage holding|
|                       |         holding         |                            |
+-----------------------+-------------------------+----------------------------+
|Deborah Jane White     |        8,777,579 (5.18%)|         34,883,774 (16.22%)|
+-----------------------+-------------------------+----------------------------+
|HBS 049 Limited        |       15,000,000 (8.86%)|         30,000,000 (13.95%)|
+-----------------------+-------------------------+----------------------------+
|Cormac Crawford        |      16,988,435 (10.03%)|          18,954,772 (8.81%)|
+-----------------------+-------------------------+----------------------------+
|Brett  J.  Desmond (all|                         |                            |
|held  by  IIU  Nominees|                         |                            |
|Limited)               |       15,929,204 (9.41%)|          15,929,204 (7.41%)|
+-----------------------+-------------------------+----------------------------+
|Lynchwood Nominees Ltd |        9,083,489 (5.36%)|           9,083,489 (4.22%)|
+-----------------------+-------------------------+----------------------------+
|Martin King            |        6,667,049 (3.94%)|           6,667,049 (3.10%)|
+-----------------------+-------------------------+----------------------------+
|Reginald  John  Brealey|                         |                            |
|(all   held   by   W  B|                         |                            |
|Nominees Ltd)          |        5,475,000 (3.23%)|          5,475,000.(2.55%)*|
+-----------------------+-------------------------+----------------------------+
|Bryan Lynam            |        5,309,735 (3.14%)|          5,309,735 (2.47%)*|
+-----------------------+-------------------------+----------------------------+
*  No longer  representing a  notifiable interest  in the Company's issued share
capital.

FOR FURTHER INFORMATION, PLEASE CONTACT:

 Milestone Group PLC

 Deborah White, Chief Executive              Tel: [phone]


 Strand Hanson Limited (Nominated Adviser)

 Richard Tulloch / David Altberg             Tel: [phone]


 Hybridan LLP (Broker)

 Claire Louise Noyce                         Tel: [phone]









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Source: Milestone Group PLC via Thomson Reuters ONE

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