GLN Glen Grp

RNS Number:7149A
Glen Group PLC
31 March 2006


                     Glen Group plc ("Glen" or "the Group")
                                 Trading Update

Very significant progress has been made in the six month period since 30
September 2005. On 15th February, just over six weeks ago, we completed the
acquisition of Eclectic Holdings Limited ("Eclectic"), an IT value added
services provider with a portfolio serving the corporate market. The
consolidated interim results to 31st March 2006 will therefore reflect the
trading performance of Eclectic since 15th February 2006 as well as the results
of Glen and our SME-focused operating company, Glen Communications Limited
("Communications").

Eclectic

Eclectic was acquired for an initial consideration of #2,212,500. A further
maximum consideration of #787,500 will be payable, by a further issue of shares
in Glen, if Eclectic's profits before interest, tax and amortisation ("PBITA")
exceed certain targets for the twelve month period ending 31st July 2006. The
maximum additional consideration is based on achieving PBITA of #400,000.

The directors are pleased to note that the financial performance of Eclectic to
28th February 2006, as shown in the latest unaudited management accounts, is
materially better than the equivalent period last year, and currently ahead of
internal budgets. The Board do, however, wish to stress that it is too early to
predict whether the maximum earn-out will be achieved, although early signs are
encouraging.

The Board have taken steps to integrate the Eclectic business with the rest of
the Group and have reorganised certain aspects of the Group operations with the
creation of a central support team in Glen. This change allows the operating
companies to focus exclusively on the operational side of the business and
avoids duplication of back office functions.

Communications

Following the appointment in January 2006 of Craig Saunderson as Managing
Director of Communications, we have made a number of significant changes to the
business in order to materially reduce its overhead costs and re-focus its sales
activity. The major changes are:

   * The operational headquarters have been moved from Scotland to Rotherham
     in South Yorkshire. This places Communications at the heart of the English
     market, which is approximately ten times larger than the Scottish market. A
     sales and support base remains in Scotland to service Scottish customers.
   * We have exited our prepaid phone card business, which had ceased to be a
     core activity. This was achieved in a management buy-out of this business,
     at a nominal sum, which allowed us to take costs off our books.
   * We have revisited and enhanced some aspects of our sales performance and
     have reduced the size of our sales team. We now have a fully focused, and
     more stable, sales group of six individuals.

These changes are already starting to have a positive effect on the business.

We are also pleased to report that Communications has recently signed a reseller
agreement which will allow us to launch a full carrier-class Voice over IP
("VoIP" or "broadband voice") service to the business market. The Glen broadband
voice service, which will be hosted independently, will provide a rich feature
set and be competitively priced. We expect to formally launch this early in the
next quarter. Although we have used a broadband voice service for the last year,
we have been reluctant to promote it widely as it lacked certain essential
business features. We are now confident that the new service has the range of
features and robustness required to satisfy our target market.

We expect to issue our interim results by mid June.


Eric M Hagman CBE
Chairman
31st March 2006

ENQUIRIES

Glen Group plc
Graham J Duncan
Chief Executive              0845 119 2100

College Hill
Alex Walters                 020 7457 2020



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