Issue of Equity

NWF Group PLC
25 November 2005


Embargoed until: 07.00, 25 November 2005



                                 NWF GROUP PLC

        PLACING OF 1,071,843 NEW ORDINARY SHARES AT 560 PENCE PER SHARE


NWF Group plc ('NWF' or 'the Company'), the diversified sales and distribution
business, announces that, subject inter alia to the approval of its
shareholders, it proposes to raise approximately £6.0 million by way of a
Placing of 1,071,843 new Ordinary Shares ('Placing Shares') at a price of 560
pence per Ordinary Share.

Graham Scott, Chief Executive of NWF commented: 'This fundraising is an
important milestone in the Group's development as it will widen our
institutional shareholder base and enable us to significantly increase capacity
and meet growing demand within our Distribution business. The Group will
maintain its programme of developing all four divisions which we believe is the
best strategy to continue the future growth and success of the Group.'


Background and reasons for the Placing

The Group has previously announced that it has obtained planning permission to
build three new warehouses and associated infrastructure at its Wardle site to
enable the expansion of the Distribution division's storage capabilities. The
proposed development will increase the Distribution division's capacity by
approximately 42,000 pallets, which represents a 54 per cent. increase in the
division's on and off-site capacity.

The three new warehouses will be built on 18.5 acres of land adjoining the
existing Wardle site, over which the Group has an option to acquire for a
consideration of approximately £1.8 million. The Board anticipates that this
freehold land (including a further small parcel of land required to improve site
access) will be acquired prior to the end of the Group's current financial year.
It is expected that the proposed development work will commence in the first
half of 2006 with an anticipated completion date of early 2007.

The total cost of the proposed development, including fees and other related
infrastructure costs, is estimated at £15 million. The proceeds of the Placing,
together with the financing facilities with the Royal Bank of Scotland Group,
further details of which are outlined below, will be used to provide the funds
required for the proposed development. The financing facilities will also
provide additional working capital facilities for the Group.


Financing

The Group has entered into new facility agreements with the Royal Bank of
Scotland Group which provide the Group with banking facilities of £52.7 million.
The new facilities comprise:

 •  £7 million term loan for the development (repayable on or by 30 November
    2008);
 •  £9 million revolving credit facility (available until 30 November 2008);
 •  £2.7 million term loan (repayable on or by 30 November 2008);
 •  £25 million invoice discounting facility (available until 30 November
    2008);
 •  £5 million overdraft facilities; and
 •  £4 million of asset lease facilities.


Current trading and prospects

The Board's stated strategy is to deliver growth through the continued expansion
of its four separate operating divisions through ongoing development of the
existing operations or through appropriate acquisitions.

The proposed development of the Wardle site will increase the Distribution
division's storage capacity by 54 per cent. and will add significant scale to
this division. The Board is confident that it can gain further customers to
utilise the three new warehouses, as well as providing increased ambient storage
facilities for its existing customers. Continued demand exists for the
Distribution division's services from both grocery food suppliers and
supermarkets. The division has recently won a new contract with Somerfield
Stores Limited, as announced on 11 August 2005, and the Deeside warehouse is now
fully utilised as a result of contracts with Patak's Food Limited, HP Foods and
others.

The Feeds division is continuing to increase its market share and has increased
its combined production capacity of compound feeds at Wardle (Cheshire) and
Wixland (Devon) to around 400,000 tonnes per annum. In addition to producing
compound feeds the division also manufactures blended feeds at Wardle and
Wixland and new blend plants have been established at Ayr (Scotland), Penrith
(Cumbria) and Exeter (Devon). The Feeds division, with its two major feed mills
and three satellite operations, is able to provide an increased service to its
livestock farming customers located on the western side of Britain.

The Fuels division continues to trade in line with the Board's expectations and
the acquisition of Broadland Fuels Limited, based in Norfolk, in August 2005
extends the division's geographical reach to East Anglia.

The Garden Centre division, despite trading conditions remaining tough, is
trading ahead of the prior year period with improved margins and profits. The
division has continued with its strategy of developing its existing sites during
the current year and the Board is satisfied with the progress of Victoria Garden
Centre, acquired during November 2004.

As a result the Board is confident of the financial and trading prospects and
outlook of the Group for the short, medium and longer term.


Details of the Placing

The Company is proposing to raise £5.7 million (net of expenses), by way of a
placing of 1,071,843 new Ordinary Shares at 560 pence per Ordinary Share.
Charles Stanley, as agent for the Company, has conditionally agreed to use its
reasonable endeavours to procure subscribers for the Placing Shares. The Placing
Shares will represent 11.7 per cent. of the issued share capital of the Company
as enlarged by the Placing. The Placing Price of 560 pence per share represents
a 10.0 per cent. discount to the middle market closing price of 622.5 pence per
Ordinary Share on 24 November 2005 (the latest practicable date prior to the
announcement of the Placing).

The Board considers that it would be in the Group's and shareholders' best
interests for the funds to be raised by the Placing. An offer to allow all
existing shareholders to subscribe for the Placing Shares would have
necessitated the production of a prospectus at significant additional cost,
diversion of management time and a delay in the Company receiving the proceeds
of the Placing.

The Placing is conditional, inter alia, on the passing of the resolution at the
Extraordinary General Meeting (referred to below) and Admission.

Application will be made to the London Stock Exchange for the Placing Shares to
be admitted to trading on AIM. It is expected that Admission will become
effective and that trading will commence on 22 December 2005.

The Placing Shares will, when issued and fully paid, rank pari passu in all
respects with the Company's existing Ordinary Shares, including the right to
receive any dividend or other distribution thereafter declared, made or paid.

It is expected that the Placing Shares will be delivered in CREST on 22 December
2005 and that share certificates for the Placing Shares to be held in
certificated form will be despatched by 5 January 2006.


Extraordinary General Meeting

In order to give effect to the Placing, an Extraordinary General Meeting of the
Company, to be held at the offices of Brabners Chaffe Street LLP, 1 Dale Street,
Liverpool L2 2ET, is being convened at 11.00 a.m on 21 December 2005.


Timetable

Latest time and date for receipt of Forms of Proxy
for use at the EGM                              11.00 a.m. on 19 December 2005

Extraordinary General Meeting                   11.00 a.m. on 21 December 2005

Expected date of admission and commencement of
trading of the New Ordinary Shares               8.00 a.m. on 22 December 2005

CREST member accounts expected to be credited                 22 December 2005


A circular setting out details of the Placing has been posted to shareholders
today. Copies of the circular will be available free of charge during normal
business hours on weekdays (excluding public holidays) from the date hereof
until the date falling one month after the date of Admission from the offices of
Charles Stanley & Co. Limited, 25 Luke Street, London EC2A 4AR.


For further information please visit www.nwf.co.uk or contact:

Graham Scott, Chief Executive   Mark Taylor            John West / Claire Melly
NWF Group plc                   Charles Stanley & Co.  Tavistock Communications
Tel: [phone]              Tel: [phone]     Tel: [phone]


Charles Stanley & Co. Limited, which is authorised and regulated in the United
Kingdom by The Financial Services Authority, is acting for NWF Group plc in
connection with the Placing and for no one else in connection with the Placing
and will not be responsible to anyone other than NWF Group plc for providing the
protections afforded to customers of Charles Stanley & Co. Limited nor for
giving advice to any other person on the contents of this document or in
relation to the Placing generally.






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