Issue of Equity

Rap Group PLC
26 June 2000




RAP Group plc
-------------

1 for 1 Rights Issue of 12,825,841 New Ordinary Shares at 18p per share
Acquisition of Touchline Network TV Limited
Proposed executive share option scheme
-----------------------------------------------------------------------


KEY POINTS

*   1 for 1 Rights Issue at 18p per share to raise £1.9 million net of
    expenses to provide the group with essential working capital and allow it
    to develop its retail supply activities including the e-commerce element
    of this business

*   Acquisition of the entire issued share capital of Touchline Network TV
    Limited, a company specialising in multi-media and e-commerce development

*   The Board also proposes to establish a new executive share option scheme

*   Nigel Andrew Makeham, previously a divisional director of Kewill Systems
    plc, and John Robert Griffith, Managing Director of Intershop (UK)
    Limited, to join the board as executive and non-executive directors
    respectively

*   An extraordinary general meeting of the company's shareholders will be 
    held on 12 July 2000 to approve, inter alia, the Rights Issue and the new
    share option scheme

*   Provisional allotment letters are expected to be posted on 12 July 2000 to
    shareholders on the register of members at 5 July 2000




Introduction
------------
The board of RAP Group plc announce a proposed Rights Issue, to raise
approximately £1.9 million, net of expenses, on the basis of 1 New Ordinary
Share for every 1 Ordinary Share  held on 5 July 2000, at a price of 18p per
New Ordinary Share. The Rights Issue has been fully underwritten.

In addition, the Company announces that it has acquired the entire issued
share capital of Touchline Network TV Limited ('Touchline'), a company
specialising in multimedia and e-commerce development.

The Board is also considering the establishment of a new executive share
option scheme and an amendment to the rules of the existing executive share
option scheme.


Background
----------

RAP has its origins in the distribution of rubber and plastic industrial
consumables and safety equipment.  During the 1980's, the Group grew both
organically and by acquisition, adding businesses involved in the supply and
servicing of conveyor belting, the distribution of protective equipment and
clothing and the import and wholesale of industrial gloves.

In 1994, RAP floated on the London Stock Exchange and in 1995 acquired Welpac
Harwood, a supplier of fixings, electrical and gardening products to DIY
superstores, independent retailers and builders merchants.

In the period following the acquisition of Welpac, the Group's profitability
declined as major customers were lost in the face of increasing competition.
Following the appointment of new management in 1998, a group-wide review
resulted in significant write-offs of obsolete stock and a restructuring of
the businesses around a central head office and a distribution centre for DIY
and garden products at Burnley.  Nevertheless, losses continue to be sustained
by the Group.

In the run up to the year 2000, RAP responded to the increasing demand from
major retail customers for sophisticated e-commerce solutions offering
seamless trading and installed a system to deliver this.  The result has been
successful in re-establishing the Group with major DIY superstores, which were
customers and business which had previously been lost to the Group.  Today,
some 80% of the Group's business with DIY superstores is conducted
electronically.  Furthermore, the orders gained through this channel have
yielded attractive margins.

In the same period, considerable investment was needed in the Group's
information technology ('IT') systems to ensure year 2000 ('Y2K') compliance
and to implement central stock control, purchasing and finance functions.
This was achieved at a cost to the Company of approximately £500,000 and no
major issues were encountered.  The Y2K risk has much reduced since 31
December 1999 and, the Directors believe, is now generally viewed as
being of moderate to low risk and will reduce linearly with time.  The Company
has not experienced any Y2K problems to date, either internally within the
Group or with customers or other third parties.

In the Company's 1999 interim statement it was stated that approaches had been
received for RAP Conveyors Limited, a stand-alone business specialising solely
in the supply and servicing of conveyor belting.  As announced on 4 May 2000,
it has now been sold for a consideration of approximately £500,000.  The
Company has also entered into a conditional contract for the sale of its
property in Hamilton, Scotland for approximately £475,000.  This is
conditional on the grant of planning permission for change of use.  This
property was valued in the accounts at 31 December 1999 at a value of £146,000
and it is the Board's intention that the business will be relocated. The
proceeds from the two disposals will be applied to the reduction of Group
indebtedness.  Neither disposal was of a size requiring shareholder approval.

Approaches have been received from third parties to purchase other parts of
the Group and therefore the sale of other group businesses is under active
consideration.  Any proceeds from these sales will be used to reduce Group
indebtedness.


Strategy
--------

The Company has continued to develop its Burnley warehousing and distribution
facilities for its DIY and gardening products.  Having established a seamless
e-commerce system interfacing with major store groups, the Board believes that
e-commerce offers RAP a new channel to sell certain of its products, in
particular gardening goods, directly to the public, thus enhancing margins.
The Group has therefore invested in the development of an internet portal
which is planned to launch later this year.  The web portal will provide a
sales channel for a range of gardening related products and services,
including RAP's own range of products, alongside those of other suppliers.

The Company has been assisted in the development of its own portal by
Touchline, a company specialising in multimedia and e-commerce development
whose technology is based on the Intershop platform.  RAP acquired all of the
issued share capital of Touchline on 26 June 2000 for consideration of 500,000
Ordinary Shares.  A further 330,000 Ordinary Shares will be issued should
Touchline meet certain profit targets in the year to 31 March 2001.  In the
year to 31 March 2000, Touchline had net assets of £58,000 and pre-tax profits
of £50,000.  The acquisition was made in order to underpin the Company's
e-commerce strategy and to allow it to move easily towards the future style of
business to business e-commerce trading, utilising fully featured multimedia
content.  Touchline brings with it an IT development team specialising in
multimedia and e-commerce projects.  Touchline also has other clients for whom
it will continue to provide a service but this aspect of its business is not
expected, or planned, to grow to a size which would be significant in relation
to the current Group.  Furthermore, the acquisition of  Touchline is not of a
size requiring shareholder approval.


Board changes
-------------

Following the implementation of the strategy outlined above, John Savage
intends to relinquish his executive role, probably later this year.  He will
receive, in accordance with his service agreement, an appropriate severance
payment and, in addition, the Board are minded to pay him at that time a bonus
in recognition of his role in formulating and implementing the Group's
strategy.  A new Group Chief Executive will be appointed at the appropriate
time.

In order to strengthen the Board the Directors have decided to make the
following appointments:

Nigel Andrew Makeham

Mr Makeham will join the Board on 1 July 2000, arriving from Kewill Systems, a
supplier of e-commerce solutions, where he was Sales and Marketing Director of
the ERP division.  Having gained a BSc at Sheffield University, he has 25
years' experience in both sales and marketing and in automating and improving
the efficiency of manufacturing and distribution companies.

John Robert Griffith

Mr Griffith will be invited to join the board in the near future as a
non-executive director.  He is currently Managing Director of Intershop (UK)
Limited, a supplier of e-commerce software.  Intershop (UK) Limited is a
wholly owned subsidiary of Intershop Communications AG.  Mr Griffith's
background is in design and corporate communications where he spent some 15
years working as a new business developer for advertising agencies and design
companies, culminating in a period as new media director for Holmes and
Marchant plc.  His three years with Intershop have made him familiar with 
many of the challenges faced by businesses embracing e-commerce.



Reasons for the Rights Issue
----------------------------

The Company is in urgent need of funds to provide essential working capital
for the Group to ensure its continued viability and shareholders' attention is
drawn to the section entitled 'Working Capital' below.  Of the proceeds of the
Rights Issue, approximately £1.2 million will be used to reduce group
indebtedness to acceptable levels and approximately £0.7 million to develop
its retail supply activities, including the e-commerce elements of this
business.

Significant monies have already been invested in the development of the
gardening portal site to date, and further funding will be needed for the
site's completion.  A marketing support programme will then be needed to
create brand awareness with the new 'end user' customer base.


Current trading and prospects
-----------------------------

In the year to 31 December 1999 turnover fell from £24,863,000 to £19,685,000
compared to the same period the year before.  For the unaudited half year
period from 1 July 1999, turnover fell 21% to £9,112,000 from £11,531,000 in
the same period in 1998, mirroring the year on year decline. The second half
contraction was across the business spectrum with the exception of Welpac
Harwood which registered a 10% increase in turnover in this period.  However,
the benefits of the systems implementation including cost reductions, started
to show through towards the end of the year.

While the underlying profitability trend of the distribution businesses is
downwards, Welpac Harwood has secured major new contracts with the important
retail multiples, which will provide further growth in its revenue.  The
relocation of the gardenware business to Burnley in early 2000 offers the
opportunity to lower the cost base and improve service levels to customers. 
The Directors believe these will provide a solid base for the proposed
business developments.

The decision to focus on supplying the major retailers with DIY products has
already seen success, with many new contracts being awarded by new and
existing customers.  RAP's fulfilment capability has given the major
retailers' confidence to place more business with the Company, and the
Directors expect significant growth from this sector.

The directors believe that RAP's, e-commerce systems, together with its
fulfilment capability, have created an opportunity for the company to benefit
from the increasing demand for internet trading.

RAP is creating an internet gardening portal that will be launched later this
year  and, with the acquisition of Touchline, the directors believe the
Company is in a position to take advantage of the growth in e-commerce.


Details of the Rights Issue
---------------------------

Subject to the Rights Issue becoming unconditional, Qualifying Shareholders
will be offered the opportunity to subscribe for New Ordinary Shares at a
price of 18p per New Ordinary Share by way of rights, payable in cash in full
on acceptance.  This offer is being made to Qualifying Shareholders on the
basis of:

         1 New Ordinary Share for every 1 Ordinary Share then held

It is expected that listing of the New Ordinary Shares will become effective,
and dealings will commence nil paid, on 13 July 2000.  The latest time for
acceptance and payment in full in respect of the Rights Issue is expected to
be 3.00 p.m. on 3 August 2000.  The New Ordinary Shares will, when fully paid,
rank pari passu in all respects with the Existing Shares and will entitle
Shareholders to all dividends declared, made or paid thereafter.

Provisional Allotment Letters setting out the entitlement of Qualifying
Shareholders to New Ordinary Shares under the Rights Issue and containing
instructions on how Qualifying Shareholders may take up their entitlements are
expected to be despatched on 12 July 2000 following the passing of Resolutions
1, 2 and 3 to be proposed at the EGM.


New Executive Scheme and amendments to Existing Executive Scheme
----------------------------------------------------------------

The Directors believe that the Inland Revenue monetary limit on the 'value' of
an option that can be granted to any one individual of £30,000, which applies
to the grant of an option under the Existing Executive Scheme, is not
sufficient to enable such key employees to be adequately remunerated.  A
non-Inland Revenue approved executive share option scheme is therefore
necessary as a key part of the Company's remuneration strategy, to ensure that
it is able to attract and retain key employees and executives.

The Board considers that the grant of an option under the New Executive Scheme
to an executive should not restrict the Company's ability in the future to
incentivise other executives through the grant of share options within the
current rules of the Existing Executive Scheme.  It is therefore proposed that
the shares the subject of an option granted under the New Executive Scheme 
and the options granted to Messrs. Savage, Bolton, Grimshaw and Shaw under the
Existing Executive Scheme will not count towards the institutional limits on
the number of shares which can be used for the Existing Executive Scheme. 
This requires an amendment to be made to the rules of the Existing Executive
Scheme.


Extraordinary General Meeting
-----------------------------

An Extraordinary General Meeting of the Company will be held at Eversheds,
Cloth Hall Court, Infirmary Street, Leeds LS1 2SB at 10.00 a.m. on 12 July
2000 at which resolutions will be proposed to: 

(a)   increase the authorised share capital of the Company;

(b)   authorise the Directors to allot shares in connection with, inter
      alia, the Rights Issue;

(c)   approve the waiver to be granted by the Panel on Takeovers and Mergers;
      and

(d)   adopt the New Executive Scheme and approve  an amendment to the rules of
      the Existing Executive Scheme.


Directors' and others' intentions
---------------------------------

The Directors and N. A. Makeham have irrevocably undertaken to vote in favour
of the Resolutions and have irrevocably undertaken to take up their rights in
full under the Rights Issue.  Barfield Nominees Limited have undertaken to
renounce part of their rights under the Rights Issue in favour of the
Underwriter and vote in favour of the Resolutions.  Certain other Shareholders
have irrevocably undertaken to vote in favour of Resolutions 1, 2 and 3 to be
proposed at the EGM.  The Company has received irrevocable undertakings to
vote in favour of such resolutions in respect of 50.01% of the issued share
capital. 


Working Capital
---------------

The Directors are of the opinion that, taking into account bank and other
facilities available to it and the net proceeds of the Rights Issue, the Group
has sufficient working capital for its present requirements, being at least
the next twelve months from the date of this document.

If Shareholders do not approve the Rights Issue the Group will have
insufficient working capital to continue trading within a matter of weeks.




EXPECTED TIMETABLE OF PRINCIPAL EVENTS
--------------------------------------

Record date for Rights Issue                  close of business on 5 July 2000

Latest time and date for receipt of 
completed Forms of Proxy                            10.00 a.m. on 10 July 2000

Extraordinary General Meeting                       10.00 a.m. on 12 July 2000

Provisional Allotment Letters  
expected to be despatched                                         12 July 2000

Dealings expected to commence in the 
New Ordinary Shares, nil paid and
Ordinary Shares marked ex-rights                                  13 July 2000

Latest time and date for splitting 
Provisional Allotment Letters, nil paid             3.00 p.m. on 1 August 2000

Latest time and date for acceptance and 
payment in full                                     3.00 p.m. on 3 August 2000

Latest time and date for registration 
of renunciation                                     3.00 p.m. on 3 August 2000

Definitive Share Certificates for New 
Ordinary Shares to be despatched and 
CREST accounts credited by                                      17 August 2000

For further information please contact:

John Savage           RAP Group plc           Tel: [phone]