First Dealings

Infoserve Group PLC
23 June 2006



                              INFOSERVE GROUP PLC
                  ('Infoserve', 'the Company' or 'the Group')

                                Admission to AIM

-  Share dealings in Infoserve, the 'local' online  search
   engine, begin today on AIM.


-  Infoserve has raised £2 million (before expenses) via a placing of
   4,860,267 new Ordinary Shares at 41.15p per share. WH Ireland is the
   Company's Nominated Adviser and Broker.


-  Infoserve specialises in 'local search' marketing, where buyers and sellers
   are brought together through searches combining a specific business sector
   with a particular location.


-  The Company is soon to launch a new, Oracle-based local search platform.


-  Infoserve operates within the online and mobile network directory market,
   the importance and popularity of which are expanding quickly. Research
   suggests that when looking for goods and services locally, 76% of UK
   consumers would first search online.


-  Company growth evidenced by rapidly increasing turnover,rising from 
   £ 0.8 million in 2004 to £1.5 million in 2005 and £0.6 million for the first
   quarter of this year.


-  The Company lists approximately 2.7 million small to medium enterprises
   (SMEs) in its family of online business directories.


-  Key strategic partners include The Daily Telegraph, The Daily Mail, the
   Football League and Sky Digital TV.


-  New funds raised will be used to invest in expanding the sales team and 
   further developing Infoserve's local search technology.


-  At the placing price, Infoserve's market capitalisation is approximately
   £6 million.


Steve Barnes, Chief Executive Officer comments

'I am delighted with our move to AIM. We believe that Infoserve has a number of
leading local search products which gives us a great platform from which to gain
a leading position in the rapidly growing online directory market.'

Press enquiries

Steve Barnes, Chief Executive Officer            Tel: [phone]
Infoserve Group plc

Biddicks - Financial Public Relations            Tel: [phone]

Zoe Biddick



PLACING STATISTICS

Placing Price                                                            41.15 p

Number of New Ordinary Shares being placed on behalf of the
Company                                                                4,860,267

Number of Ordinary Shares in issue immediately following the
Placing                                                               14,580,267

Percentage of the Enlarged Share Capital available in the         33.33 per cent
Placing

Market capitalisation on Admission at the Placing Price               £5,999,780

Estimated gross proceeds of the Placing receivable by the             £2 million
Company

Estimated net proceeds of the Placing receivable by the Company    £1.61 million


COMPANY OVERVIEW

Infoserve specialises in online local search marketing whereby buyers and
sellers are brought together through searches combining a specific business
sector with a particular location. Infoserve has focused on the local search
market since 1999 and has a database of 2.7 million business records which are
listed across a network of 280 websites. This network includes a portfolio of
wholly owned business directory and specific industry websites, the websites of
a number of major online media partners such as the Daily Telegraph, the
Daily Mail and the BBC Radio Times, as well as Football League official club
sites and Sky digital TV. These sites receive over 24 million visitors per
month.


Infoserve has an established business model, with over 10,000 UK customers,
consisting mainly of small and medium-sized enterprises (''SMEs''). Infoserve
offers these businesses opportunities to achieve greater consumer awareness
through a range of products. These include enhanced business listings and
improved positioning, website creation, advertising banners and SMS marketing
solutions.


Infoserve has built up a team of over 100 sales executives and intends to
develop its business model by expanding its sales team to over 300 over the next
24 months, enabling it to increase its customer base. Infoserve is soon to
launch a new Oracle-based local search platform. This will incorporate the use
of keywords linked to specific business records which describe the products,
brands and services offered by businesses in order to provide more relevant and
detailed local search results than are currently provided by competitors. The
Directors believe that Infoserve has an advantage over its main competitors
which are, principally, search engines and traditional business directory
providers. Infoserve offers local search results across a broad range of high
profile branded websites, and increasingly enables consumers to search for goods
and services by specific keywords, across a growing range of technology
platforms to give greater relevance to local search results. The Company
proposes to seek admission of its entire issued and to be issued ordinary share
capital to trading on AIM and is raising up to £2 million by way of a placing of
4,860,267 New Ordinary Shares. The proceeds of the Placing will be used to
invest in expanding the sales team and further developing Infoserve's local
search technology.



MARKET BACKGROUND


Local search, allowing businesses within a particular locality to be found, is
not an entirely new phenomenon and has existed for many years in the form of
telephone and printed business directories. However, traditional advertising
methods are now beginning to be challenged by online local search, as the use of
digital and mobile technology grows. Online local search is beginning to make an
impact, producing results limited to a specific locality and allowing
advertisers to target specific products and places. Recent research suggests
that when looking for goods and services locally, 76 per cent of UK consumers
would first go online, compared to 18 per cent who would consult a paper
directory and 6 per cent who would call a directory enquiry service. Online
local search is now an important component in marketing strategy.



Online and mobile network searching provides greater depth and detail than
previously available through paper directories. Real-time updated business
records can be viewed which can include full descriptions of each business and
the products and services available as well as maps and directions, thereby
delivering a more informative result and service to consumers.


With approximately 40 per cent of all online searches relating to products and
services near a person's home or work, local search represents an opportunity
for advertisers to connect with their customers. According to recently published
research, the worldwide local search market will grow from $347million in 2004
to $4.07 billion by 2010. The UK is currently the largest online advertising
market in Europe. The Directors expect that the UK online local search market
will experience similar growth to the worldwide local search market.



HISTORY


Infoserve was established in 1999 with the vision of harnessing the potential of
the internet as a marketing tool to deliver accurate, useful and more detailed
local content to consumers than had previously been available. Infoserve
established www.cityvisitor.co.uk, one of the early online business directories
in the UK, in 2000, and developed this site into one of the most used business
finders on the internet in the UK. Between 2000 and 2003, a period when
investment by SMEs in online marketing was low, Infoserve's strategy was to
build its technical platform and improve search performance in readiness for the
anticipated growth in online marketing by SMEs. In 2003, Infoserve began to
broaden its customer base by listing local outlets of regional and national
businesses. Infoserve's development continued with the opening of sales
operations in Teesside in 2004 and in Leeds in the following year.



OVERVIEW OF THE BUSINESS

Infoserve is a provider of online marketing services to SMEs in the UK.
Infoserve provides marketing services to its customers by presenting them to
potential purchasers of their goods and services who are searching online for
local suppliers. Infoserve enables its business customers to be found across a
network of both general directory and industry specific websites, as well as on
Sky digital TV and mobile phones. Infoserve offers these businesses
opportunities to achieve greater consumer awareness through a range of products.
These include enhanced business listings and improved positioning, website
creation, advertising banners and SMS marketing solutions.



Revenue


Infoserve currently has three distinct income streams. Over 70 per cent of
revenue is derived from selling enhanced business listings and improved
positioning for businesses within Infoserve's network of sites, in order to
offer greater exposure to consumers. All 2.7 million businesses are listed free
of charge across the network but paid-for listings are enhanced through the
addition of prominent text and graphics as well as by being positioned above
free listings.


Revenue is also derived from the design, production and hosting of websites, and
domain name purchase and registration. The Directors expect that, as over 51 per
cent of UK SMEs do not have their own websites, this product category will grow
as a revenue stream. The third revenue stream consists of pay per click revenue
from major search engines arising from advertisements placed by those search
engines on Infoserve's websites and from commission earned on hotel bookings
that are generated from a search on one of Infoserve's sites.



Products and services


Infoserve provides its services through a variety of wholly owned websites and a
growing number of partner sites. Information on businesses is delivered across a
range of technology platforms, including the interactive Sky digital TV network
and a local SMS marketing solution.

Wholly owned websites SMEs can often find it expensive and difficult to achieve
sufficient prominence in search engine results. This creates an opportunity for
Infoserve who are able to aggregate the details of a number of SMEs into one
website which spreads the cost of promotion for each company. Infoserve is the
registered owner and operator of directory sites such as www.cityvisitor.co.uk
as well as over 130 specific industry websites, such as
www.accountantlocal.co.uk and www.rentsomewhere.co.uk. These websites provide
relevant business listings in specific UK locations. The Cityvisitor directory
contains business data across 531 product categories in over 3,500 town and city
locations. Cityvisitor and many of the specific industry websites regularly
appear on the first page of results on major search engines such as Google, MSN
and Yahoo, and give the listed businesses a prominence they would find difficult
to achieve on their own.



Partner websites


Infoserve has entered into commercial agreements with a number of media
companies which allow Infoserve to provide a local business search facility for
the media companies' own websites. Agreements of this sort have been won in
respect of the Daily Telegraph, the Daily Mail, the Sunday Telegraph, the Mail
On Sunday, the Evening Standard and the BBC Radio Times amongst others. These
agreements enable Infoserve to provide additional exposure for its local
business customers. A commercial agreement in respect of the websites of over 40
Football League clubs (including three current Premier League teams) creates a
further platform for businesses to be exposed to visitors to these high profile
websites. The popularity of football in the UK ensures that clubs' websites can
rank as among the most popular sites in a locality, which in turn drives traffic
to Infoserve's local search facility. In addition, the importance of these
football club sites contributes to Infoserve's search engine rankings. Other
commercial agreements with online directory partners 192Directory and On-Line UK
provide Infoserve's local business customers with further exposure on over 140
sites.



Digital TV


Through an agreement with British Sky Broadcasting Limited (Sky Television), the
full Infoserve data-set can be accessed on television via the set-top box,
bringing some 8 million households, 20 million consumers, and over 10 million
monthly users of Sky's interactive service onto the Infoserve network. Infoserve
intends to offer local businesses enhanced listings and exposure within their
product category and location on Sky's interactive service.

SMS. A small amount of additional revenue is derived from Txt2Mkt, a local
marketing product which enables a business to send targeted promotional messages
over mobile phones to a database of 'opted in' customers. Infoserve is also
testing the provision of responses to enquiries from consumers about local
businesses through SMS texting.



Product development


Infoserve is committed to constantly developing new products to offer business
customers improved, more cost-effective marketing solutions. It is intended that
creative design and innovative software and hardware implementation will be at
the centre of future product enhancements. Product development will focus on
delivering local search across a number of different technology platforms
including digital TV and mobile networks. In the current financial year,
Infoserve intends to introduce new Oracle-based software. This custom-written
software is designed to give more relevant and detailed local search results
than currently provided by search engines and traditional business directories.
The software will provide more specific information on products and services
available from the 2.7 million businesses comprising Infoserve's database. The
Directors believe that, eventually, consumers will no longer search by general
category but will search for more specific products, brands and services in
particular UK locations.



Customers


Infoserve's customers range from large multi-nationals to SMEs throughout the
UK. Most customer agreements are for a period of 12 months. Renewal rates for
business listings are running at approximately 65 per cent and the Directors
expect this rate to increase.



Sales and marketing


The Company's principal means of achieving sales is through telephone sales
personnel whose function is to develop relationships with the local businesses
on which data is held. Infoserve employs over 100 telephone sales personnel at
offices in Teesside and Leeds. The Directors believe that the key to the Group's
future success is to scale up its telephone sales operation and it plans to
increase the number of telephone sales personnel by approximately 10 per month
until September 2008. During the sales process, sales personnel confirm the
products and services offered by the customer's business as well as offering the
customer the opportunity to enhance its listing and to purchase any of
Infoserve's other products and services. Infoserve also employs a small number
of field sales personnel to build relationships with and sell its products and
services to more complex businesses, often with multiple locations.



Technology


Infoserve is developing a local search taxonomy in relation to UK business. This
classification of products and services links search terms to other related
search terms so that a more relevant result can be delivered. Infoserve will
shortly complete a project that involves searching all UK business websites to
extract keywords relating to those businesses. It is expected that this project
will be completed during the third quarter of the current financial year. The
Directors believe that the combination of the taxonomy and these keywords will
give Infoserve an important advantage over its existing local search
competitors. Infoserve has developed, in conjunction with a third party
supplier, a bespoke designed Oracle-based software platform that is central to
every aspect of its operations. This application enables its entire network of
websites to be updated each time a business record is amended or a sale to a
customer is made. This design enables data to be managed throughout the business
and within minutes of a customer, for example, adding a new keyword, all
internal records and external websites can be updated automatically. The
technology is scalable for new markets and products, as well as future growth in
user traffic and in the partner network. Infoserve has developed high levels of
search engine optimisation skills since 2000. This in-house skills base,
supplemented by external consultants where necessary, has allowed Infoserve's
websites to appear regularly on the first page of results on major search
engines.



Data


Infoserve's data on UK businesses originates from 18 separate sources and covers
most businesses in the UK. The Company processes more than 100,000 updates each
month in order to maintain and improve its data records. Infoserve's new
Oracle-based software will allow real-time updates to business records across
its entire network of sites, thereby improving data accuracy.



Employees


As at 31 March 2006, the Group employed 157 people, over 100 of whom were
employed in sales functions. During 2005 Infoserve experienced high levels of
telephone sales personnel turnover. This has been successfully addressed by the
introduction of improved recruitment procedures, better training, closer
management control and an improved product offering which has helped to achieve
greater sales. The Company encourages all staff to contribute thoughts and ideas
on how to improve any aspect of the business. The Group's culture is one of team
achievement and performance.



Competitors


The leading paper-based directory businesses, Yellow Pages and Thompson
directories have developed to deliver business directories in a number of ways,
including paper, online, directory enquiries and SMS. In addition, the major
search engines are attempting to increase the amount of local information
available to users. There are also a large number of small, regional business
directory services, both on and offline. The Directors believe that Infoserve
has a different business model to each of these competitors and does not compete
directly with any one of them. The leading directory businesses remain
predominantly paper-based and continue to classify businesses by broad category
headings. Search engines offer a limited solution to local businesses, which may
have no website or which are unable to command a position on the first pages of
search results. In contrast, by offering local search positions across a broad
range of websites and increasingly enabling consumers to search for businesses
by specific keywords, the Directors believe that Infoserve has an advantage over
its competitors.



Strategy


Infoserve's strategy to achieve continued growth includes expanding its sales
and marketing operation; growing the network of wholly owned and partner sites
to increase consumer traffic; and establishing a comprehensive database of
keywords relating to the goods and services offered by businesses.



SUMMARY FINANCIAL INFORMATION


The following financial information on Infoserve has been extracted without
material adjustment from the historic financial information on Infoserve for the
year ended 31 May 2003 (unaudited), the two years and seven months ended 31
December 2005 (audited) and the three months ended 31 March 2006 (audited).

                Year ended  Seven months   Year ended    Year ended  Three months
                    31 May         ended  31 December   31 December         ended
                    2003     31 December       2004          2005        31 March
                                  2003                                     2006
                       £             £            £             £             £

Turnover         178,948       158,182      823,462     1,470,813       618,174
                   =======      ========     ========      ========       =======

Gross
(loss)/profit   (153,648)      (88,068)     320,937      (567,951)     (258,664)
Administrative
expenses        (107,634)     (128,651)    (285,842)     (885,959)     (410,966)
Other
operating
income                 -             -       69,027             -             -
                  --------      --------     --------      --------      --------

Operating
(loss)/profit   (261,282)     (216,719)     104,122    (1,453,910)     (669,630)
Interest
receivable             -             -            -         3,903           975
Interest
payable and
similar
charges             (964)         (969)     (11,155)      (38,472)      (56,595)
                  --------      --------     --------      --------      --------

(Loss)/profit
on ordinary
activities
before
taxation        (262,246)     (217,688)      92,967    (1,488,479)     (725,250)
Tax on (loss)/         -             -            -             -             -
profit on         --------      --------     --------      --------      --------
ordinary
activities

Profit/(loss)
transferred to
reserves        (262,246)     (217,688)      92,967    (1,488,479)     (725,250)
                  ========      ========     ========      ========      ========



The growth in sales since the year ended 31 December 2003 can be attributed to
the opening of telephone sales operations in Teesside in 2004 and in Leeds in
2005. Trading results for the year ended 31 December 2005 and for the three
months ended 31 March 2006 reflect the cost of increased investment in
additional sales and administrative personnel and development of the technology
platform. In 2006, Infoserve changed its accounting reference date to 31 March.



CURRENT TRADING AND PROSPECTS


Turnover for the period since 31 March 2006 has been in line with budget. The
Directors believe that, although the Group will record an operating loss in the
current financial year, reflecting the high cost of investment in the
recruitment and training of additional sales personnel and technology
developments, the prospects for the Group are encouraging.



REASONS FOR ADMISSION AND USE OF PROCEEDS


The Directors believe that Admission will benefit the Group by raising the
profile of the Group in the local search market and providing access to
additional funding. The net proceeds of the Placing will be used to invest in
expanding the sales team and further developing Infoserve's local search
technology.



DIVIDEND POLICY


The Board anticipates that, following Admission, the Group's cash resources will
be retained for the continuing development of the Group. The Board will,
however, continue to review the Company's dividend policy as the Group develops.


BOARD AND MANAGEMENT


Directors


James Newman (aged 56)

James was chairman of Waste Recycling Group plc until its takeover in July 2003.
He was deputy chief executive and, prior to that, group finance director of
Kelda Group plc from 1998 to 2002. He has been group finance director of other
listed companies, including BRIDON plc and Watmoughs (Holdings) plc. He is the
non-executive chairman of Straight plc, a non-executive director of Richmond
Foods plc, Dignity plc, Scott Wilson Group plc and a governor of Sheffield
Hallam University. James is a Chartered Accountant and member of the Association
of Corporate Treasurers.


David Hood, OBE (aged 58)

Technology entrepreneur David Hood is Senior Non-Executive Director of the
Company. David founded Shipley-based Pace Micro Technology plc and plotted the
company's growth through the 1980s and 1990s until its float in 1996. David also
owns and operates MultiFlight Limited, an aircraft charter, training and
engineering company based at Leeds Bradford International Airport.


Steve Barnes (aged 51)

Steve Barnes is Chief Executive Officer of the Company. He has spent over 30
years in sales and marketing roles working for companies such as
Cadbury-Schweppes and Quaker Oats Limited and held board positions at Toshiba
(UK) Limited and Comet plc. Steve was formerly the Sales and Marketing Director
at Pace Micro Technology plc. He joined Infoserve in January 2004.


Derek Oliver (aged 45)

Derek Oliver is the founder of Infoserve and Operations Director of the Company.
Derek has a technical background, held senior roles at Thorn-EMI's television
and video group and more recently led Pace Micro Technology Limited's software
engineering division. He led the management buyout team at Pace Micro
Communications, Shipley, in 1995. He founded Infoserve in October 1999.


Andrew Thirkill (aged 47)

Andrew Thirkill is a Non-Executive Director of the Company. He is chairman of
Age Partnership Limited, a financial services company specialising in the equity
release sector, founder chairman and CEO of ATP Advertising and Marketing
Limited, a full service agency covering new media and deputy chairman of
Harrogate Town AFC Limited. Andrew was previously a director of Ultralase
Limited, a provider of laser eye treatment in the UK.



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