Q1 Trading Update

Quarto Group Inc
21 April 2004


                              THE QUARTO GROUP, Inc
                                        
                    Trading Update for the 1st Quarter, 2004

Set out below is the text of a letter of today's date from Laurence F Orbach,
Chairman and Chief Executive Officer of Quarto, the London-based and listed
international book publisher, despatched to shareholders today, together with
the Annual Report for 2003.

'Quarto's unaudited results for the first quarter of 2004 show strong forward
movement. The first quarter is, seasonally, a weak period, and 2003 was the
first year in Quarto's history in which a profit was recorded for the quarter.
In 2004's first quarter, good sales of backlist titles helped produce larger
profits, and the group is consolidating, and expanding on, the gains made in
2003.

Sales, for the three months' ended March 31, 2004 advanced, in sterling terms,
by 1.7%, to £14.6 million (2003: £14.3 million). But, as the majority of
Quarto's business is overseas, this understates the real improvement in sales
which, on a constant currency basis, were ahead by approximately 12%. Operating
profit, at £525,000 (2003: £278,000) increased by 89%, and pre-tax profit, at
£319,000 (2003: £46,000) was up by 593%. Net debt declined by £2.2 million.

In order to help iron out seasonal factors, Quarto also prepares its results on
a trailing 12 months' basis. For the 12 months' ended March 31, 2004, sales were
flat, in sterling terms, at £74.9 million (2003: £74.5 million). Operating
profit was £6.8 million (2003: £6.2 million), an increase of 9.5%, and pre-tax
profit was 15.7% higher, at £5.9 million (2003: £5.1 million). The figures for
the three and 12 month periods are stated before amortization of goodwill, and
exceptional items.

Summary unaudited income statements for the three months, and 12 months, ended
March 31, 2004 follow:  
     
                    First Quarter to March 31    Trailing 12 Months to March 31
                           2004           2003            2004             2003
                      £ million      £ million       £ million        £ million
Sales                     14.60          14.35           74.87            74.52
                       ----------     ----------      ----------       ----------
Gross profit               5.05           4.56           24.68            24.42
Overheads                 (4.52)         (4.28)         (17.87)          (18.20)
                       ----------     ----------      ----------       ----------
Operating profit           0.53           0.28            6.81             6.22
Interest                  (0.21)         (0.23)          (0.86)           (1.08)
                       ----------     ----------      ----------       ----------
Pre-tax profit             0.32           0.05            5.95             5.14
                       ----------     ----------      ----------       ----------

Commentary

These results show that our operations are performing strongly. The art
publishing business is reviving, and continues to operate in the black, and
several of our new ventures are becoming firmly established. I expect that our
publishing services business will soon reward the investments made last year,
following the recent appointment of a very experienced managing director, and
its period of adjustment after moving to new and larger premises.

Our markets continue to be reasonably buoyant, and our books are in good demand.
Their reception at two important international book fairs - one in London last
month, and the other in Bologna last week - was very positive. The group is in a
very strong position now to expand, both through reaping the benefits of our
investments in new initiatives over the last several years, and by making
acquisitions.

Quarto's results for 2003 were well received by the market. We are now pursuing
the growth strategy outlined in my Chairman's Letter (printed in the Annual
Report for 2003). The Board will be assessing acquisition opportunities under
numerous criteria, chief among them being: (a) does the potential acquisition
fit with the Company's overall strategic direction; (b) is the business being
acquired in a position to benefit from Quarto's expertise in certain relevant
areas; and (c) have we correctly evaluated the risks inherent in making the
acquisition?

In the Annual Report, I have outlined your Board's reasons for concluding that
growth through acquisition is the way forward. Of course, this carries some
risk. On balance, our past acquisitions have performed well, particularly those
that are related to our core expertise. So, we have identified 'fit' as a major
criterion when assessing opportunities. That noted, I don't want to leave
shareholders with the impression that the risk we shall be taking is all that
different from the risk we take when we invest money in producing hundreds of
new titles each year.

Book publishing is phenomenally competitive. Quarto has a low-risk, but not
risk-free, business model for book publishing. The way to minimize risk is to
avoid it. But, it's not the way to grow a business. Management assesses risks
one way and, quite properly, the Board uses different criteria and standards.
It's a system of checks and balances that works.

Quarto remains, after 28 years, a tightly- and entrepreneurially-run company.
It's now time to redouble our focus on succession planning. Shareholders may
remember that several unsuccessful attempts have been made already. The Board
expects, and hopes, that, as the company grows over the next few years, through
significant acquisitions and successful organic initiatives, Quarto will be in a
better position to attract executives with successful experience of running
larger businesses.

A strong manager, with experience of this sort, would be a considerable asset.
This is a continuing focus for your Board, which recognizes that, as Quarto
grows, its culture and corporate governance will have to change and evolve, too.
At the moment, your Board's personal financial interests are closely aligned
with all shareholders as, collectively, the Board owns about a quarter of the
company. The Board takes its fiduciary responsibility very seriously, and we are
fortunate to have independent directors who are extremely experienced in
corporate governance, finance, and change management. Their input is invaluable,
and they have served your company very well.

We have worked hard, for several years now, to improve our trading performance,
and to allow Quarto to grow again. We have learned many valuable lessons along
the way. I hope that you will continue your support of management and the Board
at this exciting time.'

Notes for Editors:

Quarto's International Co-edition Book Publishing Division creates books which
are licensed to other publishers for publication internationally. It also
includes Regent and ProVision, which are Far East-based print broking and
production services businesses, serving both third parties and the Group.

Quarto's Publishing Division primarily publishes books, under imprints owned by
the Group, and art prints, mainly for their domestic markets in the US and
Australia. In addition, it includes two UK-based publishing services businesses
primarily serving the point of sale display market, Western and AP Screen.

In the year ended December 31, 2003, underlying pre-tax profit rose by 12.2% to
£5.7m and underlying EPS by 5.7% to 22.3p - a fifth successive year of increase
in underlying EPS. Dividends per share of 5.75p were up 10% and covered 3.9 x by
underlying EPS.

A Delaware registered corporation, Quarto's Head Office is situated in
Islington, London N7, and its shares are fully listed on the London Stock
Exchange.

Enquiries:

The Quarto Group, Inc
Laurence F Orbach (Chairman & CEO)                               020-7700 9003
Mick Mousley (Chief Financial Officer)                           020-7700 9005

Bankside Consultants Limited
Charles Ponsonby                                                 020-7444 4166





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