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2004

THUS Group plc today announces the completion of the sale of its non-core Interactive Creative division to Rowan (176) Limited

The Interactive Creative division designs, produces and distributes marketing competitions and promotions principally through the UK print media, managing high volume player response levels via telephone, Internet and post.

Consideration for the sale will comprise a £50,000 completion payment and an earn-out component equal to 20% of EBITDA* up to a maximum of £1 million per annum for each of the two years following completion. The earn-out component will be payable at the end of each twelve month period. In addition, working capital, which is not expected to exceed £250,000, will be retained by THUS.

As highlighted in the Group's AGM trading update, the performance of the Interactive Creative division has deteriorated over recent months. As a result, THUS expects Interactive Creative to deliver turnover of approximately £3.0 million for the six months ending 30 September 2004 compared with £13.0 million for the year ended 31 March 2004. In addition, first half EBITDA* is expected to be negative compared with £2.9 million for the whole of last year. The net book value of the fixed assets is less than £0.1 million.

Staff consultation is now complete and 23 staff from Interactive Creative will transfer from THUS to Rowan (176) Limited as part of the sale.

THUS will continue to provide telecommunication services to Interactive Creative on an arm's length basis to support its business following the sale.

Commenting on today's announcement William Allan, Chief Executive, THUS, said: "THUS's strategy is to deliver telecommunication services to the UK business market by leveraging our advanced national network and services capability. Interactive Creative operates principally in the consumer market and is not therefore central to our core business. Given the recent deterioration in Interactive Creative's performance, we see the sale as value accretive for THUS shareholders, enabling the Company to focus more sharply on its growth areas of data and telecommunication and Internet services."

* Earnings before interest, tax, depreciation and amortisation