Proposed Demerger of QuadraNet and Crestport

BGR PLC
7 March 2000


BGR PLC

Proposed Demerger of QuadraNet and Crestport

Introduction

Today, in a separate announcement, your Board announces the Group's
results for the year ended 31st October 1999, and its intention to
recommend to Shareholders the Demerger of Crestport Limited by a
distribution to Shareholders of 4 Ordinary Shares in QuadraNet (the parent
company of Crestport following the Demerger) for every 1 Ordinary Share
held in BGR at the Record Date (5.00pm on 6th April 2000, or such later
time and/or date as may be designated by the Directors as the record date
for the Demerger).

Background to and Reasons for the Demerger

The Company purchased Crestport in February 1999.  The strategy of this
purchase was the synergy of the restaurant computer related software
developed by Crestport and the Group's own restaurant division.  This was
enhanced by the working relationships that had existed since May 1996 with
Ken Stratford with the co-development of the restaurant EPOS software that
subsequently became the operating system used at the Group's first
restaurant, Bank in Aldwych, London.

Crestport's continued product development and internet activities together
with its strong growth during 1999 has identified significant
opportunities that exist for Crestport.  It has been concluded that the
best way forward to take advantage of these opportunities is for Crestport
to become independent from the Group to allow it to pursue all
opportunities with the benefit that it will be free from possible
conflicts arising from its parent shareholder being both owner, customer
and a competitor to its other customers.  The proposed Demerger will also
enable Crestport to have a more appropriate Board structure that brings
the relevant experience it now requires to move to its next stage of
development.

In addition, the Directors believe Crestport's strong growth expected from
the existing business along with the additional significant opportunity
arising from the development of a portal web-site warrants its own profile
and identity with customers and shareholders.

The Demerger Proposals

The Demerger will be effected by the Demerger Agreement.  By its terms BGR
will declare a dividend of £556,666 to be satisfied, in specie, by
QuadraNet issuing, credited as fully paid, Demerger Shares to Qualifying
Shareholders and the transfer by BGR of its entire shareholding in
Crestport to QuadraNet.  The QuadraNet Shares will be issued on the basis
of 4 QuadraNet Shares for 1 BGR Share held at the Record Date.

History and Development of QuadraNet

Information Technology (IT) is important to the efficient and effective
management of restaurant businesses.  When it delivers accurate
operational and financial data to all parts of the business, both in real-
time and for use in strategic decision-making, it provides restaurant
operators with a critical business advantage.  Accordingly, prior to
opening Bank Restaurant in 1996 (a significant London City-based
restaurant), BGR commissioned an evaluation of IT systems then available
to the restaurant sector.  This analysis concluded that those systems did
not achieve the objectives of integration, standardization of components
and the ability to keep pace with technological advances.  The decision
was therefore taken to develop a fully-integrated IT solution for Bank
Restaurant using state of the art technology and development tools.

These systems were successfully developed and implemented prior to Bank
Restaurant's  launch and subsequently further refined.  Crestport was
formed in October 1997 with the objective of exploiting the perceived
competitiveness of those products in the market place.  Crestport had two
clear objectives: further development of IT products for BGR restaurants
and other new projects associated with BGR, and the marketing of these
products to other restaurant operators.

Crestport was established with 3 staff (Ken Stratford, Roy Tabb & Mark
Caiger), and currently has 15 full-time employees supporting IT systems in
more than 40 restaurants.  In February 1999, Crestport was acquired by
BGR, and has operated as a subsidiary since that date.

Current Business

The Group's emphasis to date has been on providing information technology
solutions for the restaurant sector with two clear product streams within
the integrated suite of software.  These are point-of-sale systems (and
associated components, such as stock control) and  reservations systems
(and the equivalent associated components, such as customer databases).
The Group presently employs independent product teams to deal with the
sales, configuration and training of each product stream.

Point-of-Sale Systems

Electronic Point-of-Sale (EPOS) systems are used in the retail sector to
accept payment for sale of goods or services.  This is particularly true
for full-service restaurants, where the majority of transactions are made
using electronic payment cards.  In developing its EPOS system, the Group
has incorporated features that not only take advantage of modern, Windows-
based technologies, but also represent the functional requirements of the
users.  By working closely with experienced restaurateurs, the Directors
believe that they have developed a product that maximizes the efficiency
of the front-of-house staff, as well as providing innovative monitoring
functions which assist management in real-time operation.

Reservations Systems

Ken Stratford brought to the Group at the outset several years experience
in the concept and design of restaurant reservations systems.  Having
worked with leading restaurateurs, Ken Stratford had successfully
implemented several restaurant reservation systems.  The Group undertook a
redevelopment of the reservations software and now has a product that the
Directors believe is pre-eminent in the restaurant sector.  The Directors
believe that there is no other restaurant reservations product that can
match the flexibility and accuracy of the Group's product.  The third
version of the software termed RES V3, is now installed at more than 30
leading restaurants.  A significant advantage of this product is
scaleability: it can be implemented at individual small restaurants, but is
equally able to be used in multi-terminal, muti-site environment such as
central reservations facilities.

Central to the effectiveness of the Group's reservations systems are the
sophisticated booking algorithms.  These algorithms  and the interactive
configuration process are, in the Directors' opinion, unique to RES V3 and
enable optimisation of the flow of customers through the restaurant
concerned.  The Directors believe, based on the performance of the system
to date, that the profits can be increased by as much as 17 per cent. over
paper-based schemes, with increments of 5-8 per cent. being typical.  Each
site has its own networked version of the product, with the IT
infrastructure necessary to support the product in a comprehensive,
reliable manner.

Sales Profile

While it is the objective of the Group to supply as many components of the
integrated solution as possible for any one restaurant or group of
restaurants, it recognises that customers may have strategies that differ
across their range of operational requirements.  The sales profile of
customers to date shows that the Group has sold systems to 37 restaurants
in respect of reservations systems and 18 in respect of point-of-sale.  Of
these, some 13 customers are using components from both product streams in
fully integrated implementations.

Future Development

Background

With the present rate of acceleration of the Internet, both in terms of
private and corporate use, any advantage gained by its use can have a
significant effect on business performance.  The number of world-wide
users is estimated to grow from approximately 142.2 million at the end of
1998 to approximately 398.6 million by the end of 2002.  The number of web
users in Europe is expected to grow to 136 million over that period, with
23 million in the UK - (38 per cent. of the entire population).  The
Directors believe that a company with the appropriate technology can
accordingly achieve substantial additional exposure to potential
customers.

There has been an increasing trend towards the use of electronic
transactions on the Web, both in the form of e-commerce (for example,
direct purchasing) and in making reservations for various events through
specialised web sites.  Customers already book airline, opera and movie
tickets, and many other forms of entertainment and hospitality using their
own computers.  Improvements in the security of the Internet mean that
consumers have more confidence in using credit cards to make purchases and
secure reservations.

Using the Internet for Restaurant Reservations

The restaurant sector has lagged behind most other sectors in using the
Web to increase potential markets.  One reason for this has been lack of
investment in IT in the restaurant sector, coupled with the fact that the
process of making restaurant reservations is one that is both relatively
complicated and also traditionally the domain of the restaurant manager
and receptionist.  Whilst a number of restaurants, and in particular the
larger groups, have web sites that advertise their locations, menus and
specialities, very few of them implement any form of e-commerce, either in
the form of reservations services or direct selling of goods.

A major Internet-based advance in the restaurant sector in the past few
years has been the emergence of third party ('customer-facing') web sites
that provide convenient centralised information about restaurants.  These
web sites are effectively on-line versions of the conventional book and
magazine-based restaurant guides.  Very few of these sites offer a
reservation service, unless it is effectively 'off-line' and dealt with by
the web-site's telephone operators sometime later that day.

Where internet-based reservations systems have been established, they
offer 'on-line' reservations but they are not 'live'.  These web sites are
allocated a small inventory of tables by various restaurants, which then
allows the possibility of making a confirmed reservation.  These tables
are, however, mostly at less busy times, as the restaurant cannot afford
to release tables that subsequently remain unsold to web-sites.  For
example, a restaurant may allow a customer-facing web site to sell tables
at 18h00 and 18h30, as those tables are always available.  However, any
peak-time tables will need to remain in the control of the master
reservations book.

The Opportunity

The Directors believe that providing real-time information on the status
of reservations at restaurants via the Internet would significantly
increase bookings.  Restaurants would be marketed and presented to a world-
wide audience of potential customers, while customer-facing web sites
would be able to 'sell' tables at all times, including advance bookings.

Several Internet companies have approached the Group to discuss
collaborative ventures, aimed at combining the Group's sophisticated
configuration and scanning algorithms with a Web-based front end.  In
addition, several of the Group's existing restaurant clients have
expressed their interest in the Group expanding its repertoire to become
more involved in the Internet, particularly with respect to enhancing the
reservations products.  The Directors believe that most restaurants will
want to have a presence on multiple customer-facing web sites and will not
want to be tied to exclusive marketing arrangements with only one such
supplier.

The number of full-service restaurants in the UK is estimated to be about
20,000 (i.e. excluding fast food outlets, bars and pubs), of which about
6,000 are located in London.  The number of  'professional operators'
(annual turnover in excess of £250,000) is estimated to comprise 15-23 per
cent. of that number, suggesting a figure of about 1,200 in London alone.

Implementation

Internet Phase 1 - Gateway

The Directors believe that the most appropriate way to develop a web-based
reservations presence is to provide a Gateway (or 'Portal') web site that
controls all access to the restaurant local reservations systems.  This
Gateway site will effectively allow the Group to:

(a)  retain control and security over the intellectual property (the
     bookings algorithms) and be able to supervise configurations more
     readily, and

(b)  facilitate any customer-facing web site to provide a reservations
     service for any and/or all restaurants that operate the Group's
     reservation system.

A preliminary domain name for the Gateway has been registered as
livebookings.com.  Thus any 'customer-facing' sites will gain access to
live reservations data at the restaurants via livebookings.com.  Typical
queries for the interface would be 'Is there a table for 4 available on
Friday night at 8pm at restaurant X?', as well as recording booking
details.  The reservations service sites should therefore be able to
improve significantly their service (both in terms of efficiency and
accuracy) by having live information.  Importantly, restaurants should be
able to select from service web sites based on any commercial agreements
they wish to enter into, rather than as a function of the reservations
system they implement.

Internet Phase 2 - Non-Branded Bookings

The Group is also developing a 'non-branded' bookings data acquisition
system set up for incorporation into restaurants' own web sites.  The
motivation for this is essentially branding and 'customer capture'.  Thus,
if a potential customer accesses the web site of a specific restaurant,
they will be able to book 'live' from there, retaining the branding of
that site.  In addition, other options for availability would be
restricted to affiliated restaurants rather than competitors, as is the
case with using a third party bookings service provider.

Growth of Core Business

The Directors believe that the implementation of the Internet extensions
to the reservations system will have a significant impact on the core
business - restaurant IT systems.  It is also their belief that any
restaurant that does not have systems such as the Group's systems
installed will be at a competitive disadvantage, particularly with regard
to Internet-based reservations.  Any customer-facing web site that does
not make use of such systems will not be able to provide a real-time
service.  The Directors believe that the businesses supporting these web
sites will therefore assist the Group to implement reservations systems at
as many restaurants as possible.  These customer-facing sites have their
own lists of restaurants (presently, restaurants tend to release their
restricted inventories of tables to one web site) that would benefit from
access to live Internet reservations.

The Directors believe that sales of reservations systems are also expected
to increase sales of point-of-sale systems, enabling the Group to provide
more integrated IT solutions.  The Group has already on a number of
occasions been asked to tender for EPOS systems following successful
implementation of RES V3.

Revenue Generation

The Directors anticipate that the Group's continuing revenues will be
generated from the following principal areas of activity:

*    Software installations for reservation systems and EPOS systems
*    Maintenance; and
*    Internet activities with income generated from shared revenues with
     third party web sites and from restaurant booking charges.

The Directors believe that revenues generated from Internet activities
will accelerate and become a major contributor to the Group's revenues.


Directors and Senior Management

Directors

* Professor Julian Jack, Non-Executive Chairman, aged 64.
  Professor Jack is professor of cellular neuroscience at Oxford
  University and a Fellow of University College, Oxford.  He has been a
  Trustee/Governor of the Wellcome Trust since 1987 and, apart from his
  scientific role, he has been particularly concerned with finance,
  investment and corporate governance.  He was involved in the
  International Share sale of Wellcome plc in 1992, and also the takeover
  by Glaxo plc in 1995.  He was Deputy Chairman of the Trust, with Sir
  Roger Gibbs as Chairman, from 1994 to 1999.  During that time he chaired
  committees concerned with governance, including the negotiation of a new
  constitution of the Trust with the Charity Commissioners and the
  recruitment of Sir Dominic Cadbury as the new Chairman.  He has been a
  member of the Investment Committee of the Trust since 1989.  He was
  appointed non-executive Chairman of the Company on 6 March 2000.
  
* Dr Ken Stratford, Chief Executive, aged 45
  Dr. Ken Stratford is the founder of Crestport and has been managing
  director since its launch in 1997.  His University education was in
  mathematics and engineering and he subsequently worked for 10 years in
  De Beers as a computer programmer/I.T. consultant.  After a period of
  academic life in which he acquired a D.Phil (Oxford) he began
  consultancy to the restaurant industry.  In early collaboration with
  leading restaurateurs, he developed the optimizing booking algorithms
  that now form the cornerstone of the reservations software sold by the
  Group.

* David Eades FCCA, Finance Director, aged 38
  David Eades is a qualified member of the Chartered Association of
  Certified Accountants.  He started his career in private practice before
  moving to Plessey Electronics Group.  He subsequently moved to Bradbury
  Blinds Ltd as Finance Director.  The company became a 100 per cent.
  Subsidiary of Faber Fabrikers in Denmark.  At the age of 29 he was
  appointed Managing Director of Faber Blinds UK, a post he held for six
  years.  He subsequently went to Cutty Catering Specialists and assisted
  in the flotation of BGR plc.  He currently holds the post of Finance
  Director of all the subsidiaries of BGR plc, concentrating on the
  finance, information flow and systems development.  He has been a
  director of Crestport since the company was formed and has worked
  closely with Ken Stratford during this time.

* Stephen Barclay, aged 57
  Stephen Barclay, non-executive director, aged 57, qualified as a
  Chartered Accountant in 1964 with Robson Rhodes before going to Wharton
  Graduate School of Finance, University of Pennsylvania, where he
  graduated in 1967 with an MBA.
  
  In 1989 he established Clifton Financial Associates Plc ('CFA') to
  provide corporate finance advice to small companies.  CFA is acting as
  financial adviser to the Company.  In August 1998 CFA was purchased by
  Talisman House Plc and Stephen Barclay was appointed executive chairman.
  He is currently a non-executive director of BGR and MICE Group Plc and
  he is also a governor of the London School of Economics and Political
  Science.  He was appointed a director of the Company on 6 March 2000.

The Group intends in the near future to appoint an Operations Director and
a Sales/Marketing Director.  The Group will in the near future take out
key man insurance for the sum of at least £1 million in respect of Dr. Ken
Stratford.

The Group currently employs a total of 15 personnel.

Trading Record of Crestport

The trading record of Crestport is summarised below.

                                  Period      Year ended  Year ended
                                  ended 31st  31st        31st
                                  October     October     October
                                  1997        1998        1999
                                  £'000       £'000       £'000
                                                          
Turnover                          -           184         341
Cost of sales                     -           (95)        (30)
Gross (loss)/profit               -           89          311
Operating expenses                -           (104)       (142)
Operating (loss)/profit           -           (15)        169
Interest payable and similar      -           (51)        (4)
charges
(Loss)/profit on ordinary                                 
activities before taxation        -           (66)        165
Tax on (loss)/profit on                                   
ordinary activities               -           -           -
Retained (loss)/profit for the    -           (66)        165
period

Current Trading and Prospects

Crestport's turnover for the year to 31 October 1999 showed an increase of
85 per cent. over the corresponding period for the previous financial
year, with profit before taxation of £0.165 million for the year ended 31
October 1999.  A significant part of this increase was attributable to new
customers and the Directors believe this trend will continue.

In addition to achieving continued organic growth the Directors also
anticipate that the development of the Group's web-based systems will
generate significant future revenues.

Against this background, the Directors view the future with confidence.

Terms of Placing

15,384,615 new Ordinary Shares have been placed at 26p per share
conditional inter alia on Admission to raise approximately £3.57 million
net of expenses for the Company.  In addition, 1,538,461 Sale Shares have
been placed on the same terms on behalf of Kenneth Stratford.

The new Ordinary Shares which are the subject of the Placing represent
approximately 15 per cent. of the Enlarged Share Capital of the Company.
Collins Stewart has agreed to use its reasonable endeavours to place the
new Ordinary Shares and the Sale Shares and to subscribe for or purchase
any new Ordinary Shares or Sale Shares not taken up under the Placing.

Stephen Barclay has subscribed for 192,308 new Ordinary Shares under the
Placing.

Ken Stratford has undertaken not to dispose of his existing holding of
Ordinary Shares for a period of one year following Admission and
thereafter (save in certain specified circumstances) not to dispose of
more than one third of the Ordinary Shares comprising such existing
holding in each year thereafter.  The other Directors have undertaken not
to dispose of their existing holdings of Ordinary Shares for a period of
one year following Admission, save in certain specified circumstances.

Use of Proceeds

The proceeds of the Placing available to the Company are anticipated to be
approximately £3.57 million net of expenses and are intended to be used in
further developing and marketing the Group's products, particularly for
use on the Internet.



Expected Timetable Of Principal Events

                                                                          2000
EGM                                                         12.15pm on 6 April
Completion of Demerger                                       6.00pm on 6 April
Dealings in the Demerger Shares expected to commence on AIM  8.30am on 7 April


7 March 2000

ENQUIRIES:

BGR plc                                              Tel: [phone]
Tony Allan, Chairman
Jeremy Ormerod, Finance Director

QuadraNet                                            Tel: [phone]
Dr. Ken Stratford, Chief Executive
David Eades, Finance Director

Collins Stewart                                      Tel: [phone]
Stuart Lane

College Hill                                         Tel: [phone]
Matthew Smallwood
Justine Warren