Trading Statement

Parity Group PLC
25 May 2001



25 May 2001 - Embargoed until 07.01am


                              Parity Group plc:

                     Strategic Review and Trading Update


Summary

Following the appointment in March of Ian Miller as Group CEO, the Board is
delighted to announce today, in a separate release, the appointment of Bill
Cockburn as Non-executive Chairman of the Group.

The Board of Parity Group plc also announces the result of a strategic review
initiated by the CEO. The review indicates that the rapid evolution of the IT
services market requires changes in the service offerings of the Group and a
more focussed marketing and sales approach. This requirement is reflected in
an unsatisfactory trading performance in the first four months of this year
which has also been aggravated by the current economic slowdown. In order to
position the Group for growth, a restructuring programme has been implemented
as outlined below.

The Group results before goodwill amortisation are expected to show a small
loss for the first six months of the year after allowing for restructuring
costs. However, the Board is optimistic of a much better second half
performance as the benefits from accelerating the implementation of the
strategy and restructuring come through.


Strategy

Parity intends to become one of a new breed of IT service companies that
concentrate on providing a clearly defined range of value creating service
offerings to its international blue chip client base. These service offerings
are designed to be responsive to clients' demands for comprehensive solutions
to their system development and IT resource needs and will be provided through
Parity's business streams - Parity Solutions, which includes Training, and
Parity Software Services.

Each of Parity's business streams will retain its own management structure and
market focus while also exploiting the cross-business synergies which exist
principally between geographic areas and in key accounts. Thus the divisions
will play to the strengths of the Group while retaining their identity and
autonomy.

Key benefits of the new Group strategy will include:

*         Growth at or above market rates through solutions-oriented service
          offerings

*         Improved visibility from longer-term contracts for services such as
          applications and content management and human capital management.

*         Higher levels of repeat business from key accounts, using
          strengthened client relationship management techniques to leverage the
          excellent reputation of Parity in its blue-chip client base


Further details of the revised service offerings within each of the Group's
businesses are given in the appendix.



Restructuring

As a consequence of the strategic review and the need to improve an
unsatisfactory trading performance during this period of change and economic
slowdown, the Board is implementing a restructuring programme involving one-
off costs of £3m. This is aimed at eliminating unnecessary activities,
increasing utilisation, implementing new IT systems and reducing overheads. It
also includes the costs of Board restructuring (£0.9m) and bad debt write-offs
in Europe (£0.5m), where credit controls have been strengthened. The majority
of the cost is expected to be charged against profits in the first half of
2001. As a result of the programme, the ongoing cost base of the Group will
reduce by over £1m in the second half of 2001 and over £2m in a full year.

Trading Update

The Board stated in Parity's preliminary results for the year ended 31
December 2000 on 6 March 2001 that market conditions in the UK and Europe had
been stable to improving, but that the US market had softened due to short
term economic uncertainty. The Board has continued to see the impact of the US
situation on the Group's activities. Parity's US business was expected to
start slowly and then improve as confidence in the economy returned. That
improvement has not yet been seen, and costs are being managed down to
minimise the impact of lower revenue.

The businesses in Continental Europe have also been affected, with major US
multinationals cutting or freezing headcount.  Revenues have been stable since
the beginning of the year, notwithstanding increased competition due to
software houses selling out their staff into the contractor market in order to
maintain utilisation rates. This will continue to limit growth prospects in
the short term. Management is responding to this by focusing on major accounts
that require a broader range of IT staffing solutions and where the Group's
international relationships can be leveraged. Steps are also being taken to
reduce significantly the overhead base of the business by scaling it to
current revenue levels.

In the UK, Parity Solutions has seen demand for its skills-based business
deteriorate significantly over the last few months as the UK market has moved
towards buying value-added business propositions rather than IT capability.
The new strategic focus on specific service offerings and key accounts is now
in place and is already paying dividends. However, trading performance in the
first half of 2001 will be substantially lower than last year. Parity Training
has made a good start to the year with a strong level of demand.

The UK IT staffing business is performing satisfactorily in challenging market
conditions and has won some 15 preferred supplier agreements since the
beginning of the year. Parity Selection, following its launch last year, is
making strong progress in the UK and Prime Selection has been integrated and
is performing fully in line with expectations.

The issues identified above, including charging the full cost of restructuring
are expected to result in small pre-tax loss before goodwill amortisation in
the first six months of 2001. The Board expects a much-improved second half
performance following the cost savings from restructuring and as the new
strategic direction begins to generate growth.

Ian Miller, Parity Group CEO said:

'Since taking over as Chief Executive in March, my view of Parity as a high
quality IT services provider has been completely supported by what I have
found. The company has excellent people with up to date skills, an impressive,
blue-chip client base, and a reputation for quality of delivery that is rare
in this industry. That said, much needs to be done to better address the clear
opportunities offered by the market, even in today's conditions.

'The strategic review that we have recently completed is resulting in a far
clearer focus on value propositions that relate to the business issues and
opportunities for Parity's clients. These play to Parity's undoubted business
and technical strengths, and are already having an impact on sales as clients
respond favourably to the new approach. I see no reason why we should not get
Parity back to growth at or above market rates in all three lines of business.'

For further information, please contact:

Ian Miller, Chief Executive, Parity Group plc            Tel: [phone]
Ray King, Finance Director, Parity Group plc             Tel: [phone]


Giles Sanderson/Harriet Keen, Financial Dynamics         Tel: [phone]


 Appendix
 Parity's Businesses and Services

Parity's businesses are organised into two divisions - Parity Solutions, which
includes Training, and Parity Software Services.  Together these make up three
related business streams with key strengths in their respective markets:

Parity Solutions provides end-to-end IT solutions for business and government,
including web architecture, IT systems design and integration and applications
management. Its strengths include its excellent balance of traditional and
e-business skills, its true 'end to end' capabilities and its first class
business control systems.  Its large blue chip client base includes the Post
Office, BT, BAT and the MoD.

In future Parity Solutions will go to market with value-added service
offerings in areas where it has great depth of skills and experience, and will
strengthen its sales and account management processes to support the change.
Service offerings will be focused on :

*         Applications management
*         Content management
*         Customer relationship management
*         Interactive commerce
*         Legacy integration
*         Security

Five key target industries have been chosen based on growth prospects and
profitability. These are Financial Services, Manufacturing, Government, Energy
and Communications.

The Board believes that over the next two years, companies will concentrate
their IT budgets on getting the most out of the considerable recent investment
in IT systems.  Parity Solutions will therefore provide offerings to address
two key themes:

*         Increasing business value from past and current investment in IT
*         Realising the potential of linking e-business systems and legacy
          systems

Parity Training, which provides IT and management training, is one of the
country's top four training companies. Its strengths include the unrivalled
quality of its courses, the breadth of its offerings and its excellent client
base.

Parity Training will continue to provide excellent classroom training together
with new e-learning offerings in Europe and the United States.

Parity Software Services provides IT staffing solutions, including strategy
and planning, permanent and temporary staffing, and Human Capital Management
(HCM) services. Its strengths include its international footprint, its
technology for Client Relationship Management, its differentiated position as
an IT resource management/solutions provider and its excellent blue chip
client base in both Europe and the USA. Clients include IBM, Unilever,
Reuters, JP Morgan Chase and Shell.

Parity Software Services is developing value-added offerings which will put it
at the centre of the huge HRM market. It will provide services which enable
companies to manage more effectively their IT resources, reduce wastage and '
time to market', increase the retention and utilisation of scarce skills and
reduce the total cost of IT support services. This move into HCM consultancy
will reduce the cyclical nature of revenue streams associated with traditional
staffing and offer excellent margins.