Q1 Update/Annual Meeting

Quarto Group Inc
02 May 2007


Wednesday May 2, 2007

                             THE QUARTO GROUP, INC.

                 Q1 Trading Update and Annual Meeting Statement

                        'in line with our expectations'

At the AGM in London this morning of Quarto, the fully listed independent book
producer and publisher, based in London, Laurence F. Orbach, Chairman and Chief
Executive, will state:

'The first quarter of the year is traditionally very quiet, typically
contributing less than one-fifth of annual revenue and a small loss, and this
year is no exception. In the UK, and some continental European countries,
business remains a little subdued, but it has continued reasonably strongly in
the US and Australia. Happily, our operating profit in the quarter improved
marginally, in spite of the substantial decline of the US dollar, our principal
trading currency.

Two important book fairs, which are normally held in March, the London Book Fair
and the Bologna Children's Book Fair, took place this year in April. Initial
reports from these events are very encouraging, and we are working to convert
the strong response to our forthcoming titles into firm orders. At the London
Book Fair, our new JR Books imprint, run by veteran publisher Jeremy Robson,
announced an entertaining new book by Michael Winner, Fat Pig Diet, to be
published later this year. His new list has a strong line up of titles.

In our international co-edition book publishing segment, the bankruptcy of AMS,
on the last business day of 2006, left a hole in the sales of our children's
imprint, Q+. We had previously decided strategically to re-orient the unit's
titles towards a trade, rather than warehouse club, market. AMS's bankruptcy has
only accelerated that shift. Thankfully, the re-energized publishing list was
strongly supported at both the London and Bologna book fairs. Our quarterly
publication, The World of Fine Wine, received the Art Vinum 'Best Media' award
at a glittering ceremony in Stuttgart.

The publishing segment, which operates mostly in the US and Australia, performed
well. Book returns were down on the prior year and there were solid sales
improvements, in local currencies. At some of our special interest publishing
units in the US, Amazon.com has become our largest customer, displacing the
retailing book giant, Barnes & Noble. This is an interesting development,
perhaps not yet indicative of a sea change in consumer habits, but of a trend
that's worth following.

For the first quarter, to March 31, 2007, unaudited operating profits* of
£142,000 (2006: £132,000) are up 8%, on revenue of £17.2 million (2006: £18.0
million), down 4% as a result of the substantial decline in the US dollar
(average rate in the period 1.95, compared to 1.75 last year). On a constant
currency basis, revenue was up 4%. The trading performance in the first quarter
was in line with our expectations. For the 12 months' ended March 31, 2007
operating profits* increased by 2% to £9.6 million (2006: £9.4 million). A
summarised trading statement is set out below:

                                      March 31, 2007
                         Three months             Trailing 12 months
                           2007         2006+          2007         2006+
                           £000          £000          £000          £000
Revenue                  17,244        17,951        92,906        95,975
Gross profit              5,745         6,041        32,708        33,209
Overheads               (5,603)       (5,909)      (23,141)      (23,831)
Operating profit            142           132         9,567         9,378
Interest                  (600)         (608)       (2,287)       (2,342)
Pre-tax result            (458)         (476)         7,280         7,036
EBITDA                    2,335         2,265        18,047        17,904

+ restated for a change of accounting policy from expensing the pre-press
development costs of creating a new title to capitalizing them and writing them
off over a three-year period following the first delivery of a new title. This
accounting policy was first adopted with the 2006 full year results.

* before amortization of non-current intangibles and non-recurring items.'

Notes for Editors:

Quarto is an international book producer and publisher with two principal
strands of activity: it publishes, under imprints owned by the Group, books and
art prints in the US, the UK, and Australia; and it creates books that are
licensed to other publishers for publication under their own imprints in many
languages around the world.

In 2006, Quarto increased adjusted pre-tax profit by 9% to £7.3 million and
adjusted diluted earnings per share by 6% to 22.5p, proposing total dividends
per share up 4% at 6.75p.

Enquiries:

The Quarto Group, Inc.
Laurence Orbach (Chairman & CEO)                          020-7700 9003
Mick Mousley (Finance Director)                           020-7700 9004

Bankside Consultants Limited
Charles Ponsonby                                          020-7367 8851




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