Share Placing/Trading Update

Millfield Group PLC
21 April 2004

21 April 2004



Millfield Group plc

Share Placing and Trading Update



Share placing

Millfield today announces a placing to raise approximately £3.6 million net of
expenses through the issue of 6,400,000 new Ordinary Shares at 60p, and a
trading update ahead of its results for the year ended 31 March 2004. The
proceeds of the placing, which has been underwritten by Collins Stewart, will be
used to provide working capital for the Group. Following the placing, the
Directors expect the Group to be self-financing.



The issue of new shares is conditional on shareholder approval and a circular is
expected to be sent to shareholders later this week.



Trading update

The Group has made further progress in achieving its strategic objectives in the
six months ended 31 March 2004. Adviser numbers have grown from 600 at 30
September 2003 to 625 at 31 March 2004. During the period, 135 new advisers
joined Millfield.  The net increase takes account of those advisers who have
moved on because they could not meet Millfield's productivity standards.



Productivity has grown due to the returning confidence from the improvement in
market conditions and the focus on headhunting high quality advisers, so that in
Millfield Partnership, average submitted business levels for the remaining
advisers has grown from £85,000 in the year ended 31 March 2003 to approximately
£100,000 for the year ended 31 March 2004.



The Directors expect to announce an increase in turnover for the year to 31
March 2004 of over 50% compared to last year. During the six months to 31 March
2004, turnover has been over 20% higher than in the previous six months. This
was slightly below Directors' expectations, reflecting the number of advisers
removed and the underperformance in various companies within the Group.



Costs have been in line with expectations with like for like reductions from the
first half of the year.  As a result, the Directors expect to announce losses,
significantly reduced from the first half of the year, of approximately £3
million for the second half (ignoring the effect of the change in accounting
policy referred to below).



Change in accounting policy

The presentation of the accounts for the year to 31 March 2004 will be affected
by a change of accounting policy arising from the publication of new guidance
under FRS 5.  Recognition of turnover will now take place when a policy is
issued by a product provider rather than at the earlier date at which it is
submitted to the provider, as was the case previously.  Also the cost of lapses
arising on old policies will now be treated as a reduction in turnover rather
than a cost of sales.



The effect of these changes will be to delay the recognition of turnover and
profits and to increase the gross margin percentage.   Whilst the Group's
turnover growth is approximately 50%, reported turnover will be reduced by
approximately 20% compared to the previous accounting policy and gross margins
will increase from approximately 31% to 35%.  Compared to the previous policy,
the negative impact on earnings for the year ended 31 March 2004 is estimated to
be £2 million, evenly split between the two halves of the year.  The changes
have no effect on the fundamentals of the business or on its plans for the
future.



Current trading

The prospects for the business remain excellent.  Turnover has grown at over 50%
for each of the last three years and strong growth is expected to continue for
the next year.  In the last year, like for like costs have been reduced and a
further reduction of approximately £1m is planned this year. The Directors are
confident in the Company's ability to capitalise upon improving market
conditions thereby increasing adviser productivity and enabling the Company to
continue to recruit high quality professional & specialist advisers capable of
meeting Millfield's standards.



Turnover is currently at a run rate that is approximately 25% higher than the
average for the year just ended. Turnover growth will be driven by the planned
increase in the number of advisers running at over 10 per month (net of any
leavers) and productivity improvements. Productivity increases are expected to
be enhanced by the contribution of marketing initiatives now in place and the
implementation of our new business processing system.



New business processing platform

To be successful Millfield must be capable of continually delivering a better
adviser and client proposition. A new business processing system is being
implemented, which in conjunction with  our business centre in Hull, will make
our processing more efficient and cost effective. Millfield has committed
approximately £1 million to the implementation of this and other e-commerce
initiatives. The Directors are confident that material benefits in productivity
will be delivered as a result.  The first phase of the implementation has been
completed with phase 2 to be completed by September 2004.



Lifetime

The Company remains in negotiation with a number of parties with a view to
selling down part of Millfield's shareholding in Lifetime Group Limited.
Millfield currently owns 41% with Norwich Union Life owning 49.9%.  FSA
authorisation for Lifetime is anticipated in the next three months.



Looking Forward

Millfield is one of the companies driving the industry's revolution in
distribution. It has a clear pre determined view of where it is taking
distribution and is capable of orchestrating support for this from both inside
and outside the Group. Millfield has the infrastructure to operate effectively
in the changing regulatory environment and the capacity to grow.



The Board believes that only those companies that remain strong will prosper as
the advisory market continues to change and consolidate. Millfield offers a
compelling proposition for high quality independent IFAs and specialist
advisers.





Enquiries to:



Millfield Group plc

Paul Tebbutt, CEO                                  020 8604 2607
Harry Roome, Finance & Operations Director         020 8604 2623



Redleaf Communications (Financial PR)
Emma Kane/Nick Lambert                              020 7955 1410



Notes to Editors



About Millfield



•          Millfield is now an established UK national independent
financial advisory group, offering truly independent and specialist advice,
covering regulated and non regulated financial planning. Specialist services
include employees benefits, business solutions for SMEs, corporate financial
planning, pensions advice, life insurance, investment and mortgage's, as well as
long-term care provision, private client services and professional partnerships
with accountants, solicitors and estate agencies.



•          Further information is available on the Millfield website:



www.millfield-partnership.co.uk.








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