Company Update

GB Group PLC
18 March 2002


                              GB Group plc ('GB')

                                 Company Update



*           Since the start of the year, GB (formerly TelMe Group plc) has
undergone substantial changes and the Board wishes to comment on the current
business carried out by the Group, its prospects and the approach of management
to a number of issues.



*           On 31 December 2001, GB sold its Travel Interests from which it
received a cash payment of £4 million, with a further £1 million in cash if
certain performance criteria are met.



*           As at 8 March 2002, GB had cash deposits of £5.2 million with which
to develop its continuing Customer Relationship Management ('CRM') business.
The cash will be used to grow the business organically and to make constructive
investments and acquisitions.  A recent investment includes taking a 25% in
PostcodeID Limited, a business solutions company based in Bradford with whom it
has developed voice-activated data capture software.



*           GB has four specific lines of business: DataCapture (address
management software products) is product based.  DataCare (bureau service for
data cleansing), DataManagement (providing database outsourcing and data
warehousing service) and DataInsight (analysis and consultancy service on data)
are all service based.



*           GB's customer base includes BskyB, JMC, Thomas Cook, Park Group plc
and Britannia Music.



*           The financial performance of GB's continuing CRM business has
demonstrated a significant improvement since the disposal of the Travel
Interests with the results to the end of February 2002 now being broadly in line
with the corresponding period in the previous year despite a slow start to the
year.



*           Indications are that the improvements to date will continue up to
the full year on 31 March 2002.  The operating profit, that is profit before
central costs, goodwill, interest and tax for the continuing CRM business in the
previous year to 31 March 2001, was £1.1 million.


*           Since the disposal of the Travel Interests, the central costs of the
Group before exceptional items have reduced significantly from £535,000 in the
year to 31 March 2001 to an annualised rate of approximately £250,000.



Details of this announcement will be sent to shareholders on 19  March 2002.



For further enquiries, please contact:


GB Group plc

Richard Law, Chief Executive                                       01244 657333

Peel Hunt KBC
David Davies                                                      020 7283 9666

Weber Shandwick Square Mile
Richard Hews/Trish Featherstone                                   020 7950 2800








As previously announced, the sale of the Group's Travel Interests was completed
on 31 December 2001, and the Group received a cash payment of £4 million at that
time.  If the turnover of these travel businesses were to increase significantly
during the twelve months to 31 December 2002, the Group would receive an
additional cash payment of £1 million.  The Group had cash deposits of £5.2
million at 8 March 2002, with which to develop its continuing Customer
Relationship Management ('CRM') business.  These cash resources will be used to
grow the business organically and to make relevant and constructive investments
and acquisitions, such as the recent investment in PostcodeID described below.



At the Extraordinary General Meeting held on 11 January 2002, shareholder
approval was given to change the name of the Group from TelMe Group plc to GB
Group plc. The reason for this was that the TelMe brand name is an important
part of the Travel Interests and belongs naturally with ownership of those
interests, whilst now the largest business in the Group is carried out under the
brand name of GB Group.  The name GB Group plc is now being used, and this
implementation of the change of name has been notified to The Stock Exchange.



Given the recent substantial changes in the Group, the Board considers it is an
appropriate moment to comment on the current business carried out by the Group,
its prospects, and the approach of management to a number of particular issues.



The Businesses of GB Group



The idea underlying the GB Group ('GB') is to provide efficiently a number of
important, and straightforward building blocks for the large and sophisticated
CRM sector.  CRM is a fast-growing business area whose overall aim is to
provide, for businesses, a more knowledgeable understanding of their current and
future customers needs.  This allows businesses to analyse their customer
databases and turn their stored data into knowledge, which can be used to
predict future buying patterns, and so create more profitable relationships with
their customers.  A fundamental aspect of achieving this aim is for businesses
to record, interpret and use customer data accurately and effectively.



GB is a data business which specialises in customer and marketing data.  It uses
its advanced information technology and operational skills to provide products
and services to its clients enabling them to maximise the value of their
customer data.



These products and services are underpinned by The National Register(R), a
regularly updated database of 48 million individuals and households developed by
GB, which is used to check the accuracy of customer data held by GB's clients.
Industry observers have described The National Register(R) as by far the most
comprehensive dataset available in the UK.



GB has four specific lines of business; one is product based and three service
based, as follows:



Product Based



GB Data Capture



GB Data Capture is address management software that makes use of sophisticated
data searching, data matching and data capture routines to enable clients with
large numbers of customers to build and keep accurate their customer databases.
Some of GB's largest clients have many millions of customers and GB's software
is essential in enabling them to manage their business and interact with their
customers.  In particular, GB software helps organisations comply with data
protection legislation which obliges companies to ensure that the data they hold
on customers is accurate and current.



Address management software is sold on an annual licence basis with the amount
paid by the client dependent on the size of installation or number of users.
This is a high value product with the largest licences generating in excess of
£100,000 annually.  Customers for this product include Npower and HM Customs and
Excise.





Service Based



GB DataCare



GB DataCare provides clients with bureau services which enable them to keep
their customer data up to date and accurate.



Clients send GB their customer databases or marketing campaign lists which are
then checked for accuracy against the most up to date reference databases from
organisations such as British Telecom (telephone numbers) and Consignia,
formerly Royal Mail, (postcodes) whose details are contained within The National
Register(R).



The GB service is high volume and is able to process up to 3 million customer
records over a 24 hour period.  Customers, which include WH Smith and a number
of major banks, are charged on a project basis.



GB DataManagement



GB Data Management provides outsourced database warehousing and database
maintenance to those clients who have decided no longer to host and manage their
customer data in-house.



GB installs the client's database onto its own IT systems at GB's premises and
then regularly updates, cleans and maintains the database while enabling the
client to have remote access to the database.



These arrangements are typically long term and high value.  Earlier this year GB
won a three-year contract to build and operate a customer database for Park
Group plc worth £0.8 million.  Other clients include the beverages division of
Nestle, JMC and Thomas Cook.



GB DataInsight



GB Data Insight provides analysis and consultancy services and tailored
software, aimed at identifying important trends and extracting valuable
information from an organisation's customer and transactional data.  Large
companies generate and record many millions of customer transactions and the
huge volume can mask business critical information and trends.  GB applies
sophisticated analytical techniques and consultancy services to interpret this
data and to maximise the value of the findings.



Customers include BskyB, which has used the service to improve its customer
loyalty and recruitment rates.  Analysis and Consultancy work is charged for
either on a project basis or on a high value licence basis.  Other customers
include Park Group plc and Britannia Music Company.



Research and Development



It is GB's objective to ensure that its products and services are positioned as
the best in their market, and tailored to the requirements and expectations of
clients.  GB has a proactive development programme aimed at developing new and
improved products for our existing markets.  New technology is also being
developed in conjunction with strategic partners such as PostcodeID (see below).



Performance of the Continuing Business



The preliminary results for the financial year to 31 March 2002, expected to be
released in May, and the subsequent Annual Report, will necessarily include the
results of the Travel Interests for the nine months until their sale on 31
December 2001.  An important object of this communication, therefore, is to give
shareholders an idea of the financial performance of the continuing CRM business
as it now is, following the sale of the Travel Interests.




The financial performance of GB's continuing CRM business has demonstrated a
significant improvement since the disposal of the Travel Interests.  This is as
a result of both a clearer focus and an improved market.  Accordingly the
results for the eleven month period to the end of February 2002, are now broadly
in line with the corresponding period in the previous year, despite the slow
start to the year reported to shareholders at the interim stage in December
2001.  Whilst the month of March is particularly important to the overall result
for the year, indications are that the improvement experienced to date will
continue up to the full year end on 31 March 2002.



The operating profit, that is profit before central costs, goodwill, interest
and tax for the continuing CRM business in the previous year to 31 March 2001
was £1.1 million.  The central costs of running the Group have reduced
significantly since the disposal of Travel Interests.  In the year to 31 March
2001, central costs, before exceptional items, were £535,000 and they have now
been reduced to an annualised rate of approximately £250,000.



The Board is encouraged by the strength and profitability of its product based
business reflected in new software licence sales and the renewal of existing
licences.  The service based activities of GB, which have accounted for much of
the growth of the CRM activities over the last two years, represent a
significant opportunity for future growth for the business moving forward.  The
Board is, however, conscious that in rapidly developing a presence in these
markets, operating margins have not been as high as they potentially can be.  It
is a priority of management in the coming year to increase the operating margins
from the service areas of the business by improving efficiency and to improve
margins overall.



Cashflow



GB has generated a positive cash flow from its operations since the disposal of
its Travel Interests.



PostcodeID



On 4 February 2001 GB announced that it had exercised an option to acquire 25%
of the share capital of PostcodeID Limited, a provider of business solutions for
the customer service market based in West Yorkshire.  The option to subscribe
for shares was entered into in July 2001, and since that time GB has been
working with PostcodeID to develop voice activated data capture software, which
PostcodeID believes will find significant application in the growing call centre
markets.  GB provides its National Register(R) database to PostcodeID under
licence.



The Board is, of course, most conscious of the substantial fall in the value of
the company's share price both over a period of time and in particular, since 11
September.  It remains committed to, and is concentrating on, maximising value
for shareholders, and will continue to communicate directly and fully to
shareholders about the progress of the company.





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