Placing and Open Offer

Millfield Group PLC
09 July 2003


Date:                    9 July 2003
On behalf of:            Millfield Group plc
Embargoed until:         0701hrs



NOT FOR RELEASE, DISTRIBUTION OR PUBLICATION IN WHOLE OR IN PART IN OR INTO THE
UNITED STATES, CANADA, REPUBLIC OF IRELAND, JAPAN OR AUSTRALIA



Millfield Group plc

Proposed Placing and Open Offer to raise approximately £8.85 million (net of
expenses)



Millfield Group plc ("Millfield" or "the Company"), a leading independent
financial services advisory group, today announces that it proposes to raise
approximately £8.85 million (net of expenses) by means of a Placing and Open
Offer.



The Group has also announced today separately its audited results for the year
ended 31 March 2003 and details of the intended investment by Norwich Union in
Lifetime, the Group's personal portfolio services venture.



Highlights



•                  Placing and Open Offer of 20,512,996 New Ordinary Shares of
0.175p each at 49.5p per share to raise approximately £8.85 million (net of
expenses)

•                  Open Offer to Qualifying Shareholders on the basis of 29
New Ordinary Shares for every 100 existing Ordinary Shares

•                  The primary purpose of the Placing and Open Offer is to
provide additional working capital for the Group and to support the business
plans of Group companies

•                  Placing and Open Offer underwritten by Collins Stewart
Limited, Nominated Adviser and Broker to the Company



Enquiries:


Millfield Group plc
Paul Tebbutt, Chief Executive                               Tel: [phone]
Harry Roome, Finance & Operations Director                  Tel: [phone]


Collins Stewart Limited                                     Tel: [phone]
Simon Atkinson/Stephen Keys

Redleaf Communications                                      Tel: [phone]
Emma Kane/Katharine Sharkey                                  Mob: [phone]







Notes to Editors



•                  Millfield Group plc was floated on the Alternative
Investment Market of the London Stock Exchange in March 2001.



•                  Millfield is a national independent financial advisory
company in the UK, offering truly independent advice, primarily in the pensions,
life insurance, investment and mortgage sectors, as well as long-term care
provision, personal wealth management and the corporate financial planning
arena.  Millfield also has specialist divisions dealing with offshore
investment, insurance and employee benefits.



•                  Further information is available on the Millfield website:
www.Millfield-partnership.co.uk



This summary should be read in conjunction with and is subject to the full text
of the attached press announcement.



Collins Stewart Limited which is authorised and regulated by the Financial
Services Authority, is acting as Nominated Adviser and Broker to the Company in
relation to the Placing and Open Offer and for no other person, and will not be
responsible to any person other than the Company for providing the protections
afforded to clients of Collins Stewart or for providing advice in relation to
the Placing and Open Offer or any other matter referred to in this document for
the purposes of Regulation 13(I)(g) of the POS Regulations.



Collins Stewart's responsibilities as Nominated Adviser are owed solely to the
London Stock Exchange and are not owed to the Company or any Director or to any
other person in respect of their decision to acquire New Ordinary Shares in
reliance on any part of this document.  No representation or warranty, express
or implied, is made by Collins Stewart as to any of the contents of this
document.



This announcement does not constitute an offer to sell, or the solicitation of
an offer to subscribe for, the New Ordinary Shares in any jurisdiction in which
such offer or solicitation is unlawful.  The New Ordinary Shares have not been,
and will not be, registered under the United States Securities Act of 1933, as
amended (the "Securities Act").  No Prospectus in relation to New Ordinary
Shares has been or will be lodged with, or registered by, the Australian
Securities and Investment Commission.  No Prospectus in connection with the
distribution of the New Ordinary Shares has been or will be filed with, and no
exemptions will be obtained from, any securities commission or similar
regulatory authority in Canada.  As a result of regulations in the Republic of
Ireland, the Open Offer is not being made to shareholders resident in the
Republic of Ireland.  In order to comply with South African law, Qualifying
shareholders resident in South Africa may require the approval of the South
African Exchange Control authorities if they wish to take up their entitlements
under the Open Offer.  Shareholders resident in other overseas territories
should consult their professional advisers as to whether they require any
governmental or other consents or need to observe any other formalities to
enable them to take up their entitlement.








NOT FOR RELEASE, DISTRIBUTION OR PUBLICATION IN WHOLE OR IN PART IN OR INTO THE
UNITED STATES, CANADA, REPUBLIC OF IRELAND, JAPAN OR AUSTRALIA



Millfield Group plc

Proposed Placing and Open Offer to raise approximately £8.85 million (net of
expenses)



Introduction



Millfield Group plc announces today that the Company proposes to raise
approximately £8.85 million, net of expenses, by way of a Placing and Open Offer
of 20,512,996 New Ordinary Shares, at the Issue Price. Qualifying shareholders
have the right to subscribe for New Ordinary Shares on the basis of 29 New
Ordinary Shares for every 100 existing Ordinary Shares.  The Placing and Open
Offer is underwritten by Collins Stewart.



The primary purpose of the Placing and Open Offer is to provide additional
working capital for the Group and to support the business plans of Group
companies.



This announcement also contains details of developments at Lifetime, the Group's
personal portfolio services venture.



Background to the Placing and Open Offer



In the past 12 months the volumes of business in protection and mortgage
products have risen sharply whilst the number of product providers has declined
and as a result the administration processes by which providers handle this type
of business have been put under increasing strain. This has led to a number of
product providers having considerable backlogs and delays in the completion of
such business. At the same time, product providers have been unwilling to
advance commissions on protection and mortgage products prior to the completion
of business because of their interpretation of the rules relating to inducements
and soft commissions.



The change in Millfield's business mix in relation to these products has
resulted in an increased requirement for working capital for the Group to fund
the pipeline debtor which arises between the date when a policy is submitted to
a product provider and the subsequent receipt of money by Millfield from that
provider.



Whilst the Directors have based their assessment of the Group's working capital
requirements on present experience, there are initiatives being progressed by a
number of product providers and actions being pursued by the Company, which the
Directors believe will, in due course, accelerate the processing and issue of
business and reduce the Group's working capital requirements.

Lifetime



Lifetime was established approximately a year ago as a joint venture to develop
the systems and infrastructure and seek the necessary regulatory approvals to
launch a personal portfolio services business in the United Kingdom. A total of
£3.5 million was invested by the Company and its former joint venture partner,
AM Corporation, to fund the start up and development of Lifetime's business. The
development of Lifetime has progressed and it is intended that Lifetime launches
its portfolio management and investment service towards the end of this year
following regulatory approval which is expected to be obtained in the autumn and
live testing.



In December 2002 Millfield acquired the interests of AM Corporation and one of
its directors in Lifetime taking Millfield's interest in the issued ordinary
share capital of Lifetime to approximately 78 per cent. of the ordinary share
capital.  The Directors of Millfield believe that the market for the provision
of such personal portfolio services such as those which Lifetime will offer will
be a key part of the distribution channel for financial and investment products
in years to come.  Considerable interest has been expressed by industry
participants in supporting Lifetime, spurred on by developments in this area by
certain of the UK's leading financial product providers. This has culminated in
Norwich Union Life agreeing heads of terms to take a strategic investment in
Lifetime.





Current Trading and Prospects



Since Millfield's flotation in March 2001, its business has grown from a small
base of 100 advisers to over 500 advisers and accountancy professionals today
and substantially put in place the infrastructure that the Directors believe is
necessary to deliver its business objectives. The market's expectation is for
the Group to reach profitability (before goodwill, amortisation and losses
arising from Lifetime) in the current financial year and the Directors of
Millfield retain their determination to achieve this.



The Group's plan anticipates a turnaround from the results for the year ended 31
March 2003 and reflects:



•           Increases in turnover and gross margin from new advisers

        Millfield Partnership Limited had 83 more advisers at the end 31 March
2003 than a year earlier who will generate a full year's production this year.
The Group's plan anticipates an increase in adviser numbers during the current
year through focused recruitment.



•           Anticipated contribution from acquisitions

        Last year the Group put in place the stepped acquisition of 7 IFA firms,
which will make a full twelve months' contribution during the current financial
year.



•           Contribution from RST Group and Simply Millfield

        These companies only started trading as members of the Group in February
2003.  The RST Group currently offers accountancy services from 9 offices and
plans to make further acquisitions of small accountancy practices during the
year. Simply Millfield is a new company and its plan is to establish and grow
its direct term assurance business during the current year.



•           Reduced cost base

        The Directors have undertaken a review of the cost base of its wholly
owned advisory businesses. Notwithstanding the continuing growth in the number
of locations, the upgrade of facilities and the ability of the infrastructure to
process increased volumes from an increasing number of advisers, measures have
already been put in place which the Directors anticipate will result in
administrative expenses for these businesses in the current year being over 10
per cent. lower than last year. These cost reductions have been in the areas of
employee-related costs, information technology and marketing expenditure, as
well as through the transfer of business from Millfield Private Clients SARL in
Guernsey to Millfield Partnership in London. Further process improvements are
being made which, the Directors anticipate, will result in additional savings
coming into effect from the second quarter of the current financial year
onwards.



•           Marketing strategies

The Group put in place four focused marketing strategies over the last year
which are now starting to generate incremental turnover.



The Group's financial plan for the current year assumes no further deterioration
in market conditions. In light of the current market environment, an average
adviser productivity increase beyond those resulting from specific marketing
strategies, of less than 1 per cent., have been assumed, although the Directors
remain determined to achieve substantially higher adviser productivity levels in
time.



The Group's management accounts for the two months ended 31 May 2003 show:



•           the Group's advisory businesses trading in line with Directors'
expectations;

•           RST Group trading profitably; and

•           Simply Millfield establishing its business through controlled
growth, with advertising levels not yet up to the levels required to generate
profits.



There are a number of factors that give the Directors of Millfield confidence
that going forward there is the prospect of considerable upside to the Group's
current year plan. These factors include that:



•           the Group will continue to seek to recruit new advisers and
increasingly has been attracting experienced advisers with track records of high
productivity. The Directors believe that this will, over time, contribute to
improving average adviser productivity levels within the Group;



•           the development of multi-tie distribution arrangements, as envisaged
by CP121, the FSA's consultation paper on "reforming polarisation"'. If enacted,
it is likely that this would promote business between the UK's leading product
providers and selected larger distribution groups of the kind which Millfield
would seek to be;



•           the establishment of the Group's business centre in Hull remains a
fundamental part of the Group's plan to achieve efficiencies and incremental
revenue through the efficient and, in some cases, direct electronic processing
of business;



•           Simply Millfield, the Group's new direct term assurance business,
provides a foundation for the distribution of non regulated, standardised
products, as envisaged by the Sandler report;



•           the programme of stepped acquisitions of other IFA firms and RST
Group, a consolidator of accountancy services businesses, implemented by the
Group provides the opportunity to enhance earnings for the Group;



•           Product Innovations Limited, the Group's recently established
product design business, has the opportunity to build on the initial series of
investment products that it is designing on behalf of its clients; and



•           implementation of the arrangements concerning Adviserco Limited,
further details of which are set out in paragraph 3(f) of Part IV of the
Prospectus, so as to provide incentives to increase productivity for our IFAs
and other advisers through better control and servicing of clients.



In addition, the Directors believe that Lifetime represents a significant
opportunity to build value for the Group.





Details of the Placing and Open Offer



The Company is proposing to raise approximately £8.85 million net of expenses,
by way of a Placing and Open Offer of 20,512,996 New Ordinary Shares at the
Issue Price.



Collins Stewart has agreed to use reasonable endeavours to procure institutional
investors to subscribe for the New Ordinary Shares, subject to recall to satisfy
valid applications under the Open Offer. The Placing has been underwritten by
Collins Stewart.



The Placing and Open Offer are conditional upon the following conditions being
satisfied by 8.00 a.m. on 5 August 2003 (or such later date being not later than
3.00 p.m. on 19 August 2003 as the Company and Collins Stewart may agree):



(1)        the passing of the Resolution;



(2)        the Placing Agreement becoming unconditional and not having been
terminated; and



(3)        Admission of the New Ordinary Shares becoming effective.



Qualifying Shareholders may subscribe for New Ordinary Shares pro rata to their
shareholdings on the Record Date on the basis of:



         29 New Ordinary Shares for every 100 existing Ordinary Shares



held at the close of business on the Record Date at a price of 49.5p per share.
Fractional entitlements to New Ordinary Shares will be aggregated and will be
allotted to Placees under the Placing. The New Ordinary Shares must be paid for
in full on application, which must be lodged not later than 3.00pm on 31 July
2003. To the extent that the New Ordinary Shares are not taken up under the Open
Offer they will be allotted to the Placees under the Placing.



The net proceeds of the Placing and Open Offer will primarily be used as working
capital by the Group and to support the business plans of Group companies.



Further details of the Open Offer and the terms and conditions on which it is
being made, including the procedure for acceptance and payment, are set out in
Part II of the Prospectus and in the accompanying Application Form. To be valid,
Application Forms must be received by Capita IRG Plc not later than 3.00p.m. on
31 July 2003.



The Open Offer is not being made to certain overseas shareholders, as outlined
in Part II of the Prospectus.



The New Ordinary Shares will, when issued, rank pari passu in all respects with
the existing issued Ordinary Shares, including the right to receive all
dividends and other distributions declared, made or paid on or after, or by
reference to a record date on or after, the date of their issue and will be
issued free of all liens, charges and encumbrances.

The Prospectus



A Prospectus produced by the Company and containing the full terms of the
Placing and Open Offer, together with the relevant Application Forms and Form of
Proxy, are expected to be despatched to Qualifying Shareholders later today.





Extraordinary General Meeting



An extraordinary general meeting of the Company at which a special resolution
necessary to implement the Placing and Open Offer will be proposed has been
convened for 9.45 a.m. on 4 August 2003, or otherwise immediately following the
conclusion of the Annual General Meeting also convened for 9.30 a.m. that day.





Expected timetable of principal events




Record Date for the Open Offer                                      close of business on 3 July 2003


Latest time and date for splitting (to satisfy bona fide            3.00 p.m. on 29 July 2003
market claims only)


Latest time and date for receipt of Application                     3.00 p.m. on 31 July 2003
Forms and payment in full under the Open Offer


Latest time and date for receipt of Forms of Proxy                  9.45 a.m. on 2 August 2003


Annual General Meeting                                              9.30 a.m. on 4 August 2003


Extraordinary General Meeting                                       9.45 a.m. on 4 August 2003


Dealings in the New Ordinary Shares expected to commence            8.00 a.m. on 5 August 2003


CREST member accounts credited                                      5 August 2003


Expected date of despatch of definitive certificates                By 12 August 2003





Enquiries:


Millfield Group plc
Paul Tebbutt, Chief Executive                                 Tel: [phone]
Harry Roome, Finance & Operations Director                    Tel: [phone]


Collins Stewart Limited                                       Tel: [phone]
Simon Atkinson/Stephen Keys

Redleaf Communications                                        Tel: [phone]
Emma Kane/Katharine Sharkey                                    Mob: [phone]




Collins Stewart Limited which is authorised and regulated by the Financial
Services Authority, is acting as Nominated Adviser and Broker to the Company in
relation to the Placing and Open Offer and for no other person, and will not be
responsible to any person other than the Company for providing the protections
afforded to clients of Collins Stewart or for providing advice in relation to
the Placing and Open Offer or any other matter referred to in this document for
the purposes of Regulation 13(I)(g) of the POS Regulations.



Collins Stewart's responsibilities as Nominated Adviser are owed solely to the
London Stock Exchange and are not owed to the Company or any Director or to any
other person in respect of their decision to acquire New Ordinary Shares in
reliance on any part of this document.  No representation or warranty, express
or implied, is made by Collins Stewart as to any of the contents of this
document.



This announcement does not constitute an offer to sell, or the solicitation of
an offer to subscribe for, the New Ordinary Shares in any jurisdiction in which
such offer or solicitation is unlawful.  The New Ordinary Shares have not been,
and will not be, registered under the United States Securities Act of 1933, as
amended (the "Securities Act").  No Prospectus in relation to New Ordinary
Shares has been or will be lodged with, or registered by, the Australian
Securities and Investment Commission.  No Prospectus in connection with the
distribution of the New Ordinary Shares has been or will be filed with, and no
exemptions will be obtained from, any securities commission or similar
regulatory authority in Canada.  As a result of regulations in the Republic of
Ireland, the Open Offer is not being made to shareholders resident in the
Republic of Ireland.  In order to comply with South African law, Qualifying
shareholders resident in South Africa may require the approval of the South
African Exchange Control authorities if they wish to take up their entitlements
under the Open Offer.  Shareholders resident in other overseas territories
should consult their professional advisers as to whether they require any
governmental or other consents or need to observe any other formalities to
enable them to take up their entitlement.





Definitions



The following definitions apply throughout this document, unless the context
otherwise requires:-



"Act"                        The Companies Act 1985, as amended

"Admission"                  In relation to any Ordinary Shares, the admission 
                             of those shares to trading on AIM becoming
                             effective

"AIM"                        The Alternative Investment Market of the London 
                             Stock Exchange

"Application Form"           The application form accompanying the Prospectus on
                             which Qualifying Shareholders may apply for New
                             Ordinary Shares under the Open Offer and which 
                             forms part of the terms and conditions of the Open 
                             Offer

"Board" or "Directors"       The board of directors of the Company

"Company" or "Millfield"     Millfield Group plc

"Collins Stewart"            Collins Stewart Limited

"CREST"                      The computerised settlement system to facilitate 
                             the transfer of title to Shares in uncertificated 
                             form operated by CRESTCo

"CRESTCo"                    CRESTCo Limited

"EGM" or
"Extraordinary General 
Meeting"                     The extraordinary general meeting of the Company 
                             convened for 9.45 a.m. on 4 August 2003 notice of 
                             which is set out at the end of the Prospectus

"Form of Proxy"              The form of proxy accompanying this document for 
                             use at the EGM

"FSA"                        The Financial Services Authority

"Group"                      The Company and its subsidiaries

"IFA"                        Independent financial adviser

"Issue Price"                49.5p per New Ordinary Share

"Lifetime"                   Lifetime Group Limited, registered in England and 
                             Wales with number 4344611

"London Stock Exchange"      London Stock Exchange plc

"New Ordinary Shares"        The 20,512,996 new Ordinary Shares being made 
                             available to Qualifying Shareholders under the Open 
                             Offer

"Norwich Union Life"         Norwich Union Life Investment Partnership

"Open Offer"                 The conditional offer by Collins Stewart, on behalf 
                             of the Company, to Qualifying Shareholders to
                             subscribe for the New Ordinary Shares on the terms 
                             and subject to the conditions set out in Part II of 
                             the circular and in the Application Form

"Ordinary Shares"            Ordinary Shares of 0.175p each in the capital of 
                             the Company

"Placees"                    Parties which agree to subscribe for New Ordinary 
                             Shares under the Placing

"Placing"                    The placing by Collins Stewart, subject to recall 
                             to satisfy valid applications by Qualifying
                             Shareholders under the Open Offer, of the New 
                             Ordinary Shares, as described in this document

"Placing Agreement"          The agreement dated 9 July 2003 between the 
                             Company (1) and Collins Stewart (2) and under which 
                             Collins Stewart has conditionally agreed to use 
                             reasonable endeavours to procure placees
                             for the New Ordinary Shares subject to recall to 
                             satisfy valid applications under the Open Offer

"Prospectus"                 The prospectus to be issued by the Company dated 
                             9 July 2003

"Qualifying Shareholders"    Shareholders on the register at the Record Date 
                             other than certain overseas holders as described in 
                             the paragraph headed ''Overseas Shareholders'' in 
                             Part II of the Prospectus

"Record Date"                Close of business on 3 July 2003

"Resolution"                 The resolution to be proposed at the EGM, notice of 
                             which is set out at the end of the Prospectus

"RST Group"                  RST Group Limited, registered in England and Wales 
                             with number 4141507

"Shareholders"               Holders of existing Ordinary Shares

"Share Option Schemes"       Together the Millfield Group plc Approved Share 
                             Option Scheme, the Millfield Group plc Unapproved 
                             Share Option Scheme and the Millfield Group plc IFA 
                             Share Option Scheme

"Simply Millfield"           Simply Millfield Limited, registered in England and 
                             Wales with number 4344616

"United Kingdom" or "UK"     The United Kingdom of Great Britain and Northern 
                             Ireland




                      This information is provided by RNS
            The company news service from the London Stock Exchange