Trading and IFRS Statement

Paragon Group Of Companies PLC
21 February 2006

                       
                      
                        TRADING STATEMENT AND IFRS UPDATE
                        ---------------------------------


The Paragon Group of Companies PLC today announces an update on its current
trading. It also announces that it will be briefing investors and analysts on
the key impacts of its adoption of International Financial Reporting Standards
('IFRS'). The Group has adopted IFRS for the year ending 30 September 2006.

Trading Statement

Lending activity has been strong in the year to date, with completions already
in excess of £1 billion, some 60% higher than a year ago. This growth is
principally attributable to the buy-to-let business, where application flows and
completed loans are significantly ahead of the comparable period last year,
whilst activity in the consumer finance businesses remains at similar levels to
last year in accordance with our expectations.

The Board is confident, at this stage, that our objectives for this year will be
achievable and we expect to be able to report good progress in our interim
report to shareholders during May.

IFRS Update

The IFRS briefing published today includes Income Statements for the six months
ended 31 March 2005 and the year ended 30 September 2005, Balance Sheets as at 1
October 2004, 31 March 2005, 30 September 2005 and 1 October 2005, Statements of
Recognised Income and Expense for the periods ended 31 March 2005 and 
30 September 2005 and Reconciliations of Movements in Equity for the periods 
ended 31 March 2005 and 30 September 2005 converted from UK GAAP to IFRS 
together with detailed explanations of the key changes.

In accordance with the exemptions available in IFRS 1, the Group has not
restated its 2005 results for the effects of the adoption of IAS 32 and 39,
dealing with financial instruments. The figures which will be shown as
comparatives in the 2006 accounts and interims are:

                                         30 September 2005       31 March 2005
                                          IFRS       UK GAAP    IFRS    UK GAAP
Profit for the period, excluding
amortisation of goodwill                 £71.8m       £72.7m   £33.5m    £33.9m
* Profit after tax                       £55.8m       £60.7m   £25.9m    £28.5m
* Basic earnings per share                48.9p        53.3p    22.7p     24.9p
Net assets                              £312.8m      £308.0m  £295.3m   £291.3m

* The UK GAAP figures include a credit to the profit and loss account of £4.1
million for the year ended 30 September 2005, (£2.2 million for the six months
ended 31 March 2005) in respect of amortisation of negative goodwill, which is
excluded from the IFRS comparatives.

The principal changes reflected above are:

   •Negative goodwill from the acquisition of Mortgage Trust no longer
    carried in the balance sheet and amortised.

   •Recognition of defined benefit pension scheme deficit in liabilities.

   •Dividends payable not recognised until approved.

   •Changes in treatment of leasehold assets.

   •Additional charges for share based payment.

Whilst the effects of IAS 32 and 39 are not included in the statutory
comparatives, the Group has prepared pro forma comparatives which include the
impairment and amortised cost provisions of these standards. On this basis the
reported figures would have been as follows:

                                         30 September 2005       31 March 2005
                                          IFRS       UK GAAP    IFRS    UK GAAP
Profit for the period, excluding
amortisation of goodwill                 £71.7m       £72.7m   £34.5m    £33.9m
* Profit after tax                       £55.7m       £60.7m   £26.6m    £28.5m
* Basic earnings per share                48.8p        53.3p    23.3p     24.9p
Net assets                              £244.4m      £308.0m  £227.7m   £291.3m

* The UK GAAP figures include a credit to the profit and loss account of £4.1
million for the year ended 30 September 2005, (£2.2 million for the six months
ended 31 March 2005) in respect of amortisation of negative goodwill, which is
excluded from the IFRS comparatives.

The IFRS pro forma profit is similar to the IFRS comparative profit shown above
and results, through the application of IAS 32 and 39, from a £6.6 million
credit from income recognition being offset by a £6.7 million increase in
impairment charges. On a divisional breakdown, a benefit of £6.6 million arises
in the Group's ongoing buy-to-let and consumer finance businesses, offset by a
reduction in profit within the Group's discontinued businesses (comprising
primarily the unsecured personal loan book and the residual owner-occupied
mortgage portfolios) of £6.7 million against the comparative.

The reduction in net worth as a result of the application of IAS 32 and 39
arises principally from a reduction in the value of loans to customers within
the Group's discontinued business areas, particularly the unsecured personal
loan book where a high discount rate has been applied to expected cash flows.

Accounting under IFRS does not affect the fundamentals of the Group's business,
but reflects a different basis of measurement and presentation of its
performance in any one accounting period. The business, its cash flows and
hedging policies are unaffected by what is principally an issue of the timing of
recognition of income, costs, assets and liabilities.

For further information please contact:

Nigel S Terrington
Chief Executive - Telephone [phone]

or

Nicholas Keen
Finance Director - Telephone [phone]






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