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Cartucho Group Ltd (CTGP)

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Thursday 31 August, 2006

Cartucho Group Ltd

Trading Update

Cartucho Group Ltd
31 August 2006


Press Release                                                 31 August 2006




                             Cartucho Group Limited



                         ('Cartucho' or 'the Company')



                                 Trading Update


On 20 July 2006, Cartucho Group, a growing developer and manufacturer of ink
refill kiosks, announced that it had installed 284 kiosks under its contract
with its major customer in the US.  As at 29 August 2006, the number of kiosks
installed and generating revenues stood at 379 kiosks.

The announcement on 20 July 2006 referred to the Company's decision taken
jointly with its major customer to install 540 kiosks by mid-September 2006 and
then reduce significantly the speed of the remainder of the roll out in order to
enable the marketing effort and sales initiatives to gain greater traction.

New initiatives that have been put in place, including more aggressive and
dynamic pricing and in-store marketing are driving up refill rates.  The average
refill rates in mature markets, those installed for more than 10 weeks, has
exceeded recent expectations and across the whole of the installed base total
refills have increased by 66% in the six weeks ending 25 August 2006.  The
Directors expect to see positive trends continuing during the remainder of this
year.

As the number of kiosks in the field has risen, the demands on the Company's
outsourced service and support organisation have risen in parallel, and the
Company received notification from its major customer to suspend further
installations, resumption of the roll out being contingent upon service and
support performance meeting with its approval.  Consequently, the Company has a
major initiative underway with its outsourced service provider to upgrade the
provision of service and support levels with immediate effect, with the goal
that enhanced levels of service and support will facilitate the recommencement
of the roll out in October 2006, subject to the approval of its major customer.

The delay in the roll out is not expected to have a material impact on results
this financial year, given the limited contribution from kiosks in an immature
market.  This shortfall is mitigated by higher than expected refill rates for
established markets.  The delay may have an impact on 2007 results depending
upon the speed of transition of the remaining 171 kiosks to mature status
through the end of 2006 and the start of 2007.  Provided that the resumption of
the roll out occurs in the above time frame, and given the better than expected
refill rates of the established kiosks and the current trends observed in the
transition from immature to mature market, the Directors do not expect the delay
to have a material effect on the forecasts for the 2007 financial year.

The improving refill rates are encouraging and the opportunity to upgrade all
kiosks to the latest software and hardware configurations, with the added
benefits of greater remote diagnostics and maintenance routines, should enable
more kiosks to deliver higher refill rates and drive improvement to the overall
averages.

The Company's trials of 10 ink refill kiosks each in two major US chains in the
drug store and mass grocery sectors on a revenue share basis are progressing
well and the Company has also now signed a reseller agreement with a distributor
covering more than 30 Caribbean and Latin American countries.


                                    - Ends -

For further information:

Cartucho Group Limited
Mike Willcocks, Chief Executive                       [email protected]

Media enquiries:

Abchurch
Chris Lane / Franziska Bohnke                          Tel: +44 (0) 20 7398 7700
[email protected]                      www.abchurch-group.com




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

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