Trading Statement

Millfield Group PLC
09 May 2005

Date:                         9 May 2005
On behalf of:                 Millfield Group plc ("the Group")



Millfield Group plc
Pre-Close Period Trading Update


Prior to entering its close period, Millfield Group plc, a leading independent
financial services advisory group, today announces an update on the Group's
progress since its merger with Inter-Alliance Group Plc on 1 October 2004 and on
the enlarged Group's trading prior to its year end of 31 March 2005.


Since the merger, we have achieved our key objective of undertaking all of the
main elements of the integration of the two businesses within the six months to
31 March 2005.  The Group structure has now been considerably simplified and we
have successfully exited all non-core businesses, details of which are set out
below.  As a result, the Group is now positioned to focus on the growth and
development of its trading activity.


In the second half of the year trading performance in both parts of the merged
group has been consistent with that in the previous six months.  Cash resources
available to support the continued trading and development of the Group are in
line with our expectations and the Directors believe that they are sufficient
for the foreseeable future.


Underlying headcount in the core business has also remained stable with total
numbers at the year end of 1,654 in the UK.  In January previously non-regulated
business was taken over by the FSA; as a result we closed down the Trinon
non-regulated network which had 86 contributing advisers and rationalised Legacy
Protect, reducing numbers by 57 - average productivity from these advisers was
under £25,000. We continue to implement minimum standard requirements which will
result in some further headcount reductions which we expect to be more than
offset by recruitment.


The main areas involved in the integration and restructuring of the Group have
been:



Corporate Structure and Branding - at 31 March 2005, the businesses of
Inter-Alliance Group Plc and Inter-Alliance (Group Practices) Limited were
transferred to Millfield Partnership Limited.  The UK National advisory business
now trades under the Millfield brand and the Inter-Alliance brand is only used
for the Group's International business.



Disposals - we have disposed of, or closed down, Millfield Moncur Jackson
Limited, Simply Millfield Limited, Product Innovations Limited, Inter-Alliance
(Mortgages) Limited, Trinon Limited and the external business of Intelliflo Plc.



Millfield Associate Partnership - we have restructured the arrangements with the
Associate firms so that we do not now necessarily expect to assume 100%
ownership of them.  They will now be accounted for as associates rather than
subsidiaries.



Training - we have integrated the internal training arrangements for the Group
in Millfield Academy, a non-profit making company funded by the product
providers.



Operations - the operations of the businesses have been merged.  The main
changes were:



•               Premises.  A rationalisation plan is being implemented to reduce
Group properties from 46 at the merger to 14 strategic locations and 7
satellites.  13 properties have already been closed, including the Inter-
Alliance head office buildings, and the balance will be closed by 31 December
2005.  Our Hull operations centre has moved to new premises.

•   Staffing.  Staff numbers engaged in overhead activities have been reduced
from 546 at the time of the merger to 406.

•   Systems.  Millfield Partnership has been migrated onto the Atlas system.  At
the end of May we will transfer to a new purpose built, hosted IT operations
centre and switch to Telstra, the AAA rated carrier, as a single telecoms
supplier.

•   Business Processes.  A single set of processes has been implemented, using
the Millfield business centre in Hull.

•   Purchasing.  A review has taken place of the Group's main suppliers.


Commissions - Common fee and commission terms were implemented across the Group
with effect from 1 April 2005.



During this quarter we are launching three major business initiatives:



 1. Multi-tie.  Depolarisation is being implemented from 1 June and at the same
    time we are launching our multi-tie division, Millfield Alliance.  This will
    allow advisers to offer over 100 products from our six multi-tie partners
    (Axa, Friends Provident, Norwich Union, Prudential, Scottish Widows and
    Skandia) and to operate whole of market to facilitate the servicing of
    existing client policies.



 2. Mortgages.  On 12 May we are launching the Millfield Mortgage Solutions
    Mortgage Club, providing specialist support to this large market segment.



 3. Lifetime.  Our joint venture wrap account business was launched with a pilot
    group of Millfield advisers on 25 April and will now be progressively rolled
    out.



As set out above, we have carried through our plans for the integration and
simplification of the Group during the second half of last year.  The Group's
principal operating businesses are now the National advisory company, Millfield
Partnership (incorporating the business received from the Millfield Associate
Partnership, and Millfield Enterprise firms as well as the branch based
business), the Sage IFA network, RST, the accountancy firm and the
Inter-Alliance International business.



Outlook



We have laid the foundations for the new Group to move ahead successfully.  We
have implemented a structure which allows us to focus on the growth of a core
group of businesses, each with a single operational base.  The Group is now very
distinctively positioned in the IFA and advisory market which is otherwise
predominantly served by networks.  As a result we currently have a record
recruitment pipeline with 150 applications being processed at present.  The
Group has seen turnover growth recommence in the last two months and expects
revenue in this financial year to be in line with market expectations.



As a result of the integration and restructuring of the Group, we have achieved
a 26% reduction in the run rate for overhead costs from £49m at the time of the
merger to £36m at the start of the New Year.  The reduction of overheads arising
from the restructuring of arrangements with Millfield Associate Partnership
firms is mirrored by a reduction in the gross margin for the Group.



The Group's gross margin for the current year will be dependent on the mix of
business between the different channels.  Initially we would anticipate a level
of around 25% with progressive growth through the year, as income from the
aforementioned business initiatives develops, with the aim of achieving margin
levels of 30%.



We have the resources to take the Group forward and have made excellent progress
in building the successful and profitable business that we envisaged at the time
of the merger.  In addition, we have a number of major business initiatives
being delivered.





Enquiries to



Millfield Group plc
Paul Tebbutt, Chief Executive                           Tel: [phone]



Redleaf Communications
Emma Kane/Sanna Lehtinen                             Tel: [phone]



Notes to Editors



About Millfield



•         Further information on Millfield is available at:
www.millfield-partnership.co.uk

•         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.






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