Rights Issue, etc

ROSS GROUP PLC
10 August 1999


                Ross Group PLC ('the Company')
                               
         Subdivision of each Ordinary Share of 5p into
   one ordinary share of 0.2p and one Deferred Share of 4.8p
                              and
       Consolidation of every 25 ordinary shares of 0.2p
               into one New Ordinary Share of 5p
                          followed by
                               
   Rights Issue of 20,093,357 Rights Shares on the basis of
    17 New Ordinary Shares for every 5 New Ordinary Shares
                at 5.5p per Rights Issue Share

Introduction

The   Board  announced  today  that  it  proposes   to   raise
approximately  £800,000 net of expenses by  way  of  a  Rights
Issue.

In order to enable the Rights Issue to proceed it is necessary
to carry out a Capital Reorganisation as follows:

-  a subdivision of each existing ordinary share of 5p into
   one ordinary share of 0.2p and one deferred share of 4.8p; and
-  the  consolidation of every 25 ordinary shares  of  0.2p
   into one New Ordinary Share of 5p.

The Rights Issue involves the issue of up to 20,093,357 Rights
Shares  on  the  basis of 17 Rights Shares  for  every  5  New
Ordinary Shares at a price of 5.5p per Rights Share after  the
Capital Reorganisation.  The Rights Issue is conditional  upon
the  approval  of  shareholders at the  Extraordinary  General
Meeting  ('EGM'), convened for 2.35p.m. or, if later,  on  the
conclusion or adjournment of the Annual General Meeting of the
Company on 3 September 1999.  The Rights Issue has been  fully
underwritten  by Mr Evans, who is a Director and the  Chairman
of  the Company, save in respect of 929,951 Rights Shares that
the  Directors have irrevocably undertaken to take  up in  the
Rights Issue.

The  Preference Shareholders will also be entitled  to  attend
and  vote  at the EGM as their preferential dividend  is  more
than six months in arrears.

Background to and reasons for the Rights Issue

At  the  time of Mr Evan's appointment to the Board  in  April
1995,   the   Group   was  experiencing   severe   cash   flow
difficulties.  The Group's bankers have been supportive  since
that  time but have set demanding targets to bring the Group's
borrowings to a more acceptable level.

As  you  will  be  aware the accounts for the  year  ended  31
December 1998 showed a pre-tax profit of £354,000 on sales  of
£21.3 million.  In his Chairman's statement Mr Evans said that
1998  proved  to  be a difficult year for the Group.   Adverse
Trading  conditions resulted in depressed sales for the  Group
and  a  reduction in pre-tax profit compared to  the  previous
year.

In  1998,  the  Group's available facilities were  reduced  by
approximately £l.6 million and this year, the Group has agreed
to  further facility reductions.  The majority of the  Group's
borrowing  facilities are in the form of bank overdrafts.   As
is  normal  for  bank  overdrafts of this  type,  their  terms
include  repayment on demand and regular reviews.  A condition
of continuing these facilities is successful completion of the
Rights Issue.

The  demanding targets set by the Group's banks, combined with
a  difficult trading environment since the end of  last  year,
which the Directors believe will result in a significant  pre-
tax loss in the first half of 1999, have placed severe strains
on  the working capital available to the Group.  The difficult
trading  environment,  during the course  of  this  year,  has
principally  affected both the Technical  Services  and  Power
divisions,  As  mentioned in the Annual Report, the  Technical
Services division began this year with a low order book at its
Rhayader  facility;  in addition, a major  aerospace  contract
that was expected to be performed mainly in the early part  of
1999  will now fall predominantly into the second half of  the
year.   This  has  affected  the revenue  from  the  Technical
Services division for the first half of the year, The loss  of
a  major  customer to the Power division has also resulted  in
substantially lower revenue from this division over  the  same
period.

The  Board  has  therefore  been  reviewing  opportunities  to
improve  the  working capital position and  is  proposing  the
Rights  Issue announced today.  The net proceeds of the Rights
Issue  will  be  in  part  applied to reduce  bank  borrowings
provided  under  a temporary facility of £300,000  and  up  to
£200,000  will  be used to increase the Group's investment  in
product  development  and marketing with the  remainder  being
used for working capital purposes.

Capital Reorganisation

Immediately prior to the Rights Issue it is proposed that  the
Capital Reorganisation will take place.  This will involve the
sub-division of each existing ordinary share of 5  pence  each
into  one  ordinary share of 0.2 pence each and  one  deferred
share of 4.8 pence each.  Every twenty-five ordinary shares of
0.2pence  each will then be consolidated into one New Ordinary
Share of 5 pence each.

The  Deferred Shares will not be listed.  The Deferred  Shares
will carry minimal rights and will have little, or no economic
value.

The  New  Ordinary Shares will have the same rights (including
voting  and dividend rights and rights on a return of capital)
as  the Ordinary Shares.  Since certain Shareholders' holdings
of  shares  are not divisible exactly by 25 and that fractions
of  shares cannot be issued, the holdings of some Shareholders
will be rounded down.  Consequently, Shareholders holding less
than  25 Ordinary Shares will not hold any New Ordinary Shares
following   the   Capital  Reorganisation.    The   fractional
entitlements  of  those Shareholders will  be  aggregated  and
those   shares   sold  for  the  benefit   of   the   relevant
Shareholders.

Under  the  Capital Reorganisation certificates  for  the  New
Ordinary  Shares  will  be despatched to  Shareholders  on  10
September  1999  and  CREST accounts  will  be  credited  with
Shareholders'  new  entitlements  on  6  September  1999.  Any
previous  certificates  will become valueless  and  should  be
destroyed.


Rule 9 of the Takeover Code

The Rights Issue has been underwritten by Mr Evans.

Pursuant to Rule 9 of the Takeover Code, any person, or  group
of  persons acting in concert, holding shares carrying between
30 per cent. and 50 per cent. of the voting rights of a public
company may not normally acquire further shares without making
a  general offer to all voting and equity shareholders in that
company.   In addition, any such person, or group  of  persons
acting  in concert, holding shares carrying less than  30  per
cent.  of  the  voting  rights of a  public  company  may  not
normally acquire shares which would take his or its holding of
shares  to a level at which such holding carries 30 per  cent.
or  more  of  the  voting rights of a public  company  without
making  a  general  offer to all equity shareholders  in  that
company.

Mr   Evans   is  interested  in  6,497,960  Ordinary   Shares,
representing 4.4 per cent. of the issued voting share  capital
of  the  Company.  He also holds share options in  respect  of
another  2,000,000  Ordinary Shares,  which  bring  his  total
potential  shareholding  (before  the  Rights  Issue  and  the
Capital Reorganisation) in issued voting share capital to 5.57
per  cent.  (including the Preference Shares  which  currently
carry voting rights).

If  all  the  Rights Shares, the subject of  the  underwriting
agreement,  were allotted and issued to Mr Evans in connection
with  the  Rights  Issue then he would become  the  holder  of
20,307,047   New  Ordinary  Shares  (following   the   Capital
Reorganisation) representing 70.63 per cent. of the  Company's
enlarged  issued  voting  capital  (including  the  Preference
Shares which currently carry voting rights) and 78.1 per cent.
of the Company's enlarged issued ordinary share capital.

In  addition,  the Company and Mr Evans have entered  into  an
agreement  confirming  that the Company  will  be  capable  of
carrying  on  its  business at all times independently  of  Mr
Evans and that all transactions and relationships between  the
Company  and Mr Evans will be at arm's length and on a  normal
commercial basis.

In  the  event  that Mr Evans holds over 75 per cent.  of  the
Company's  enlarged issued ordinary share capital  immediately
following  the  Rights Issue Mr Evans has undertaken  to  make
appropriate  arrangements  for reducing  his  shareholding  to
below 75 per cent.

The  Takeover Panel has agreed, subject to the approval of the
independent  shareholders voting  on  a  poll,  to  waive  any
obligation that Mr Evans might otherwise incur under Rule 9 of
the  Takeover  Code, as a consequence of his  subscription  of
Rights  Shares in connection with the Rights Issue, to make  a
general  offer for the New Ordinary Shares in the Company  not
already owned by him and those acting in concert with him.

In  the event that, but for the waiver referred to above,  the
underwriting of the Rights Issue by Mr Evans were to give rise
to  an  obligation to make an offer pursuant to that rule,  Mr
Evans has informed the Company that his intentions would be to
continue the Group's existing business activities and to  make
no  major  changes to the business, including any redeployment
of its fixed assets, or the employment of its staff.  Mr Evans
has  indicated that he is fully supportive of the Company  and
believes  that  the  proposed Rights  Issue  is  in  the  best
interests of the Shareholders.

Were  Mr  Evans to hold more than 50 per cent. of  the  issued
voting share capital in the Company immediately following  the
Rights Issue, then Rule 9 of the Takeover Code would not again
require  him to make a general offer to all voting and  equity
shareholders  in  the Company should he increase  further  his
shareholding.

Mr   Evans   is  chairman  and  sole  owner  of  International
Communications  for  Management,  an  international  group  of
companies   providing  strategic  business  intelligence   and
corporate marketing services.  Through a network of 19 offices
worldwide, his businesses currently employ approximately 1,200
employees.  The total turnover of these companies is in excess
of  £100  million  per  annum.  It is Mr Evans'  intention  to
realise   sufficient   current   investments   to   fund   his
subscription in connection with the Rights Issue.


Group Strategy

The   proposed  fund-raising  will  provide  the  Group   with
sufficient working capital for its current requirement.  It is
anticipated that up to £200,000 of the funds raised will  also
be   used  to  increase  the  Group's  investment  in  product
development and marketing.  The investment in these two  areas
should result in an improvement in the long-term prospects for
the businesses within the Group.

The  Directors are continuing to review ways of  reducing  the
Group's  debt  and are optimistic that further reductions  are
possible  over the coming 12 months.  The Board believes  that
any  reduction  in funding should not be carried  out  at  the
expense  of  reducing  the working capital  available  to  the
Group.

It  is  the  Board's  intention to  appoint  a  new  executive
director  within six months of completion of the Rights  Issue
and  at the time of this appointment Mr Evans will become  the
Company's non-executive Chairman.

Current trading and prospects

The  difficult  trading conditions experienced in  the  latter
part of 1998 have continued and worsened in the first half  of
1999   and   the  interim  results  of  the  Group   will   be
substantially  below those in the comparable period  in  1998.
The  Group's  interim results should be available for  release
before  the  end  of  October and the Directors  anticipate  a
significant pre-tax loss.  However, the outlook for the second
half  is  more  promising  and the Board  expects  the  Group,
subject  to the completion of the Rights Issue, to  enter  the
new  millennium  in a stronger position than it  is  currently
experiencing.

Terms and Conditions of the Rights Issue

Subject  to the fulfillment of various conditions the  Company
will  offer  20,093,357 Rights Shares  by  way  of  rights  to
Qualifying Shareholders at 5.5p per share payable in  full  on
acceptance.  The Rights Issue will be made on the basis of  17
Rights Shares for every 125 Ordinary Shares held by Qualifying
Shareholders  on  the Record Date, and so proportion  for  any
other number of Ordinary Shares then held, which is equivalent
to:

  17 Rights Shares for every 5 New Ordinary Shares after the
                    Capital Reorganisation

and  otherwise on the terms and conditions as set out  in  the
Prospectus  and the Provisional Allotment Letter.   Fractional
entitlements  will not be allotted to Qualifying  Shareholders
but  will be aggregated and sold and the proceeds retained for
the benefit of the Company.

The  Rights Shares will, when issued and fully paid, rank pari
passu  in  all  respects  with the New  Ordinary  Shares.   No
dividend  is  payable  to shareholders  for  the  year  to  31
December 1998.

The Rights  Issue has been underwritten by Mr Evans, save  for
those rights the Directors have irrevocably undertaken to take
up, and  is  conditional on Admission becoming effective on or
before  28 September 1999 (or such later date as Mr Evans  and
the Company  may agree, being not later than 29 October 1999).

Mr Evans will receive an underwriting commission in respect of
19,163,406  Rights  Shares, the subject  of  the  underwriting
calculated by reference to the Issue Price per Rights Share.

Application has been made to the London Stock Exchange for the
New  Ordinary Shares and the Rights Shares to be  admitted  to
the  Official List.  For Qualifying Shareholders,  Provisional
Allotment Letters in respect of Rights Shares are expected  to
be  despatched on 3 September 1999 and dealings in the  Rights
Shares, nil paid, are expected to commence at 8:30 a.m.  on  6
September  1999.  Provisional Allotment Letters are not  being
sent to certain Overseas Shareholders to whom the Rights issue
is not being extended.  The Provisional Allotment Letters will
show  the  number of Rights Shares provisionally  allotted  to
Qualifying  Shareholders  and certain  instructions  regarding
acceptance   and   payment,   renunciation,   splitting    and
registration in respect of the Rights Shares.  The Provisional
Allotment  Letters  will be renouncable  until  3.00  p.m.  23
September 1999.

Extraordinary General Meeting

An  EGM  of  the Company to be held at 150 Aldersgate  Street,
London  EC1A 4EJ at 2.35 p.m. or, if later, on the  conclusion
or adjournment of the Annual General Meeting of the Company on
3 September 1999, at which the Resolutions will be proposed:

(i)  to  sub-divide each Ordinary Share into one deferred  share
     of  4.8p and one ordinary share of 0.2p; and to consolidate
     every  25  ordinary shares of 0.2p into  one  New  Ordinary
     Share of 5p;

(ii) to  authorise  the subscription by Mr  Evans  of  Rights
     Shares  carrying  (together with all New  Ordinary  Shares
     derived  from  existing Ordinary Shares) 30 per  cent.  or
     more  of  the  voting rights of the Company in  connection
     with the Rights Issue without him being required to make a
     general offer for the Company under Rule 9 of the Takeover
     Code;

(iii)to  increase  the authorised share capital  of  the
     Company  by  £1,340,000 to £15,840,000 by the creation  of
     26,800,000   New  Ordinary  Shares.   The  increase   will
     represent  a  343.6 per cent. increase  to  the  Company's
     authorised  ordinary share capital as  compared  with  the
     Company's  authorised ordinary share  capital  immediately
     after  the  Capital  Reorganisation  and  is  required  to
     facilitate the Rights Issue;

(iv) to authorise the Directors for the purposes of section 80
     of  the  Act  to allot relevant securities (as defined  in
     section  80  (2)  of  the  Act)  up  to  £1,004,667.85  in
     connection  with  the  Rights Issue and  otherwise  up  to
     £430,000  in nominal amount (representing 33 per cent.  of
     the  enlarged issued ordinary share capital of the Company
     after  the  Capital Reorganisation and the Rights  Issue).
     This  authority shall expire on the earlier of 30  October
     2000 and the conclusion of the next Annual General Meeting
     of the Company;

(v)  to  authorise the Directors to allot equity securities for
     cash, outside the pre-emption provisions of section 89  of
     the  Act,  for  the  purposes  of  the  Rights  Issue,  in
     connection  with any other offer by way of rights  in  the
     future  and  otherwise  up to £65,000  in  nominal  amount
     representing  approximately 5  per  cent.  of  the  issued
     ordinary  share  capital after the Capital  Reorganisation
     and the Rights Issue; and

(vi) to  make  various  changes to the Company's  articles  of
     association ('Articles').

Following  the  Capital Reorganisation and the  Rights  Issue,
there  will remain authorised but unissued at least  8,596,832
New  Ordinary Shares (representing approximately 25 per  cent.
of  the Company's enlarged authorised ordinary share capital).
The Directors have no present intention of issuing any of such
authorised but unissued share capital other than in connection
with options granted under the Share Option Scheme.

Irrevocable Undertakings

The Directors (including Mr Evans) have irrevocably undertaken
to  vote in favour of all the Resolutions, except Mr Evans who
will abstain from voting on Resolution 2 to be proposed at the
EGM,  and  to  take up their rights in respect  of  their  own
aggregate  holdings of 6,837,960 Ordinary Shares  representing
4.63 per cent. of the current issued ordinary share capital of
the Company.

Working Capital

The  majority of the Group's borrowing facilities are  in  the
form  of  bank  overdrafts and as is normal for this  type  of
facility, their terms include repayment on demand and  regular
reviews.   The next such review is due on 31 December 1999.

Key  conditions  attaching to the Group's currently  available
bank facilities include:

(i)   satisfactory completion of the Rights Issue;

(ii)  satisfactory completion of the banks' review due  on  31
      December 1999; and

(iii) repayment of a temporary bank facility,

In the event that the bank facilities are withdrawn, the Group
would  experience difficulties in continuing to trade and  the
Directors  would  be required to seek alternative  sources  of
funding.  Actions related to this might include:

(i)   a  sale or sales of businesses and/or assets  which
      are considered to be non-core;

(ii)  the  reorganisation and relocation of certain businesses
      in  order to achieve appropriate cost savings, potentially
      releasing assets for disposal;

(iii) negotiation of alternative sources of finance  from
      Shareholders; and

(iv)  approaching  the existing lenders with  a  view  to  re-
      scheduling the bank debt.

In  the  event that the existing bank facilities are withdrawn
and  these actions are unsuccessful the Group would be  unable
to continue to trade.

Notwithstanding the above, the Directors are  of  the  opinion
that,  subject to the banks being satisfied that all necessary
conditions  for the renewal of these facilities will  be  met,
and  after taking into account the net proceeds of the  Rights
Issue,  the  Group  has  sufficient working  capital  for  its
present requirements, that is for at least 12 months from  the
date of this document.

                 Expected Timetable of Events
                                                                      1999
                                                                
Record date for Rights Issue                close of business on 27 August
                                                                
Latest  time  and date  for  receipt  of             2.35pm on 1 September
forms of proxy
                                                                
Extraordinary General Meeting                        2.35pm on 3 September
                                                                
Despatch    of   Provisional   Allotment                       3 September
Letters
                                                                
Dealings commence in New Ordinary Shares                       6 September
and Rights Shares nil paid
                                                                
Latest   time  and  date  for  splitting            3.00pm on 23 September
Provisional Allotment Letters                          
                                                                
Latest  time for acceptance and  payment            3.00pm on 27 September
in full and registration of renunciation               
                                                                
Despatch  of definitive certificate  for                         4 October
the Rights Shares

Enquiries:

Ross Group PLC
Peter  Mottershead, Managing Director       Tel:[phone]
Simon Ashworth, Company Secretary

Beeson Gregory Limited
Tim Redfern and Tony Bartlett               Tel:  [phone]