Trading Statement

Mercury Group PLC
04 September 2006


                                                              4th September 2006

                               MERCURY GROUP PLC
                                ('the Company')

                                 TRADING UPDATE

In the interim statement issued, on 28 June 2006, reference was made to the
slippage in the timing of some key contracts throughout the business, which were
expected to affect results adversely for the year to 30 September 2006. In
addition, it was stated that the results for the year would include
non-recurring costs totalling £450,000, relating to an aborted acquisition and a
restructuring programme.

Since issuing the interim statement, all three of the Company's operating
subsidiaries have experienced difficult trading conditions and the cash balance
reported as at 31 March 2006 of £805,000 has now been very substantially
reduced. The resulting working capital constraints have been further compounded
by a number of large unpaid debts, which are proving difficult to recover. The
Company is rigorously pursuing the recovery of these debts, including taking
appropriate legal action where necessary.

Whilst the Company does not presently have any bank borrowings, it is clear to
the board that the Company urgently needs to raise additional long term capital
to alleviate the current working capital constraints and to provide a
sufficiently strong financial base from which to rebuild the business. The board
is currently exploring the raising of additional capital by way of a placing of
ordinary shares with its principal shareholders. Any such placing would be
likely to be priced at a material discount to the current share price. A further
announcement will be made in due course.

For Enquiries:

Mercury Group plc                                                   07887 576111
Walter Goldsmith (non-executive chairman)




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