Amendment to Interims

Quarto Group Inc
16 August 2001


'The issuer advises that the following amendment has been made to The Quarto
Group Inc's Interim Results' released today at 07:00 under RNS Number 5768I.

The Dividend record date as shown in Note 4 should be September 28 2001 and
not September 26 2001, as previously shown.  All other details remain
unchanged.  The full corrected version is shown below.'



                                                               August  16 2001


                    THE QUARTO GROUP, INC - 2001 INTERIMS


*     Quarto, the London-based and listed international publisher, announces    
      steady progress, with pre-tax profit before amortization of goodwill for  
      the six months to June 30 - traditionally, much the quieter half of the   
      year - up 16.7% to £976,000 (2000:  £836,000).

*     On marginally increased sales of £30.2 m  (2000:  £30.0 m), operating
      profit before amortization of goodwill increased to £1,924,000  (2000:  
      £1,817,000).

*     Underlying earnings per share were 2.5p (2000: 1.9p) and the interim
      dividend per share is maintained at 2.2p.

*     For the year to June 30 2001, operating profit totalled £6.2 m (2000: 
      £5.8 m) on sales of £73.8 m (2000: £75.2 m).

*     For the six months, the International Co-Edition Book Publishing Division,
      whose business is particularly second half loaded, made operating profits 
      of £1.82 m (2000: £1.90m) on sales of £15.6 m (2000: £16.1 m). Sales of   
      new titles were very good, but reprint sales were below expectations,     
      while profit remained steady at the production services units in the Far  
      East.

*     The Publishing Division, where two-thirds of sales are in the US, made    
      operating profits in the six months of £0.70 m (2000: £0.65m) on sales of
      £14.6 m (2000: £13.9m). Almost all units improved performance, a notable
      exception being art publishing, but the UK-based marketing services       
      businesses continued to perform well.

*     Laurence F Orbach, Chairman and Chief Executive, stated 'The second half  
      of the year is always more important for us. As of now, in both the       
      international co-edition book, and the book publishing divisions, our     
      orders in hand to suggest that the outcome will be in line with our       
      expectations for the year.  We believe that the improvement in our sales  
      of new titles will be maintained, but we do not anticipate a substantial  
      improvement in the reprint situation, and we are discounting any benefit  
      from a more favorable euro/dollar exchange rate.'

*     Mr Orbach concluded ' As we put our entire house in order, we are
      positioning ourselves to return to the path of growth.'




Notes for Editors:

Quarto's International Co-edition Publishing Division primarily creates
content for publication internationally by other publishers.  It also includes
Regent and ProVision, which are Far East-based print broking and production
supervision services businesses, serving both third parties and the Group.

Quarto's Publishing Division primarily publishes books, under imprints owned
by the group, and art images, mainly for their domestic markets and from US
locations.   In addition, it includes two UK-based screen printers primarily
serving the point of sale display market, Western Screen and Sign and AP
Screen.

Although a Delaware registered corporation, Quarto's Head Office is situated
in Islington, London N7 and its shares are fully listed on the London Stock
Exchange.


Enquiries:

The Quarto Group, Inc                                      020-77 00 90 00
  Laurence Orbach (Chairman & Chief Executive)
  Mick Mousley  (Finance Director)

Bankside Consultants Limited
  Charles Ponsonby                                         020-74 44 41 66




                              CHAIRMAN'S STATEMENT


I am pleased to report that we are making steady progress, and our results for
the six months to June 30th, 2001 demonstrate what has been achieved. On flat
sales of £30.2 million (2000: £30 million), before amortization of goodwill,
operating profit increased to £1,924,000 (2000: £1,817,000), and pre-tax profit
rose by 16.7% to £976,000 (2000: £836,000).  Underlying earnings per share were
2.5p (2000: 1.9p), an increase of 32%, and the board has declared an unchanged
interim dividend of 2.2p. Although our net debt at the end of the period was
£29.3 million (2000: £28.4 million), it was slightly better than our forecast
and on a constant currency basis it was £1 million lower at £27.4 million.
Interest rates fell during the period, but our interest charge increased, due to
the decline of sterling against the US dollar, our major trading currency, and
the currency in which most of our debt is denominated.

Performance was in line with our overall expectations. The book side performed
well. Despite the more cautious economic background, the market in the United
States for our books, both in the international co-edition publishing
division, and in the publishing division, remained robust.  Sales of our new
titles have met or exceeded expectations, while backlist sales and reprints
have been a little flat. Our orders for the important second half of the year
are mostly in hand in the US, and lead us to expect our sales to remain solid
for the rest of this year. Unfortunately, the anticipated improvement in the
strength of the euro did not happen, and this continues to be a brake on the
expansion of our international co-edition book business, where a difficult
exchange rate environment has hampered sales to co-edition partners in the
euro zone.

These improved results were achieved in spite of continued poor results in art
publishing. Despite making good headway in reducing its operating costs, art
publishing sales, most of which are in the United States, declined at a faster
pace, and losses increased by £100,000 to £420,000.


Commentary on the Results

Quarto is an international business. Our largest single market is the United
States, which accounts for somewhat over half of our sales. Our principal
operating currency is the US dollar, as we buy the vast majority of our
printing needs in Hong Kong, where the currency is tied to the US dollar.

The continuing strength of the dollar has been confounding the experts,
particularly since, in their view, the fundamentals call for its weakening.
However, in continually reviewing and refining our business model, we are
assuming that the dollar will remain strong, in relative terms.

Viewed from Quarto's perspective, this puts a burden on us to ensure that we
can operate in a genuinely global environment without the benefits of an
undervalued currency. I think that we are well placed to achieve this, both
because we understand the issues, and because we have an inbuilt culture of
cost-consciousness, strong control and monitoring procedures, and are good at
procurement. During the first half of the year, our overall gross margin
improved, moving from 36% to 38% in the international co-edition business, and
more than offsetting a small decline from 35% to 34% in the publishing
division, where the mix of sales was different.

Looking at performance on a trailing 12 months' basis, which we use internally
as it eliminates the seasonality inherent in our business, sales to June 30th,
2001 were £73.75 million (2000: £75.22 million), with an operating profit of £
6.2 million (2000: £5.8 million). Our target is an overall operating margin of
10% and, excluding the loss-making art publishing business, we are almost
there. The reduction in turnover is explained by lower sales in art
publishing, lower sales to the euro zone, and the reduction of marginal sales
elsewhere. Our business units have all focussed on eliminating marginally
profitable business. Aside from the improvement to the bottom line, this focus
now allows us to reassess overhead levels.



International Co-Edition Book Publishing Division

For the six months, the division had sales of £15.6 million (2000: £16.1
million), with operating profits of £1.82 million (2000: £1.90 million). The
business is very second half loaded, and the only notable general comment is
that reprint sales are below our expectations. There are a number of technical
factors that account for this, and we do not think it is indicative of a
significant change in our industry. By contrast, sales of new titles have been
very good, and give some credence to the belief that the book business will be
less affected by the economic slowdown than many other consumer goods
industries.

The successful integration of the back office functions of Quarto Children's
and Design Eye has given the new management team a good basis on which to
rebuild the business.  Response to our new publishing proposals has been
unequivocally positive, and Jeffrey Nobbs, the managing director, has planned
significant growth over the next three years.

Rockport Publishers launched a new imprint in the United States, serving the
alternative health and spirituality market. The first titles have only just
appeared, and the response has been good. In other recent new initiatives,
Global Publishing, in Australia, now in its second year, has geared up to
produce five new titles in 2001, two of which appeared in the first half.

Our production services units in the Far East had lower third party sales but,
because of the mix of business, the gross margin improved and the profit
remained steady.



Publishing Division

Almost all units improved performance, with the notable exception of art
publishing. Sales for the six months were £14.6 million (2000: £13.9 million),
with operating profits of £701,000 (2000: £647,000). The operating units
mostly make sales in their domestic markets, and two thirds of the sales are
in the United States. At Book Sales, margins were squeezed by competition but,
in contrast to much of the publishing industry, our returns were lower than
expected, leaving the operating profit unchanged. Walter Foster's new My
Chaotic Life line of edgy publications for the 'tween', teen, and young adult
women's markets has grown, but sales to bookstores are well below our
expectations. This disappointment has been offset by strong sales of Walter
Foster publications in specialty markets, and improved sales in the core arts
and crafts outlets.

The UK-based marketing services business, primarily producing point-of-sale
material for retail promotions, continued to perform well. Sales advanced by
12%, primarily at Western, where the growth was achieved by the sacrifice of
some margin.

The art publishing business continues to take longer to turn around than
anticipated. It may even be retarded further if the economic slowdown in the
United States affects spending on interiors. The situation in Australia is
stable, and we expect to achieve breakeven there for the full year. In the
United States, having consolidated and rationalized our operations, we are
placing more emphasis on our publishing programs. The evidence now suggests
that the sales decline has been halted and, with more adventurous publishing,
and a revival of sales relationships, we are anticipating clawing our way back
to profitability.  We have determined to return this unit to breakeven and, in
the longer term, to the high levels of profitability we used to enjoy.



Prospects

The second half of the year is always more important for us. As of now, in
both the international co-edition book, and the book publishing divisions, our
orders in hand suggest that the outcome will be in line with our expectations
for the year. We believe that the improvement in our sales of new titles will
be maintained, but we do not anticipate a substantial improvement in the
reprint situation, and we are discounting any benefit from a more favorable
euro/dollar exchange rate.

Our new publishing initiatives, at Global, Rockport, and Walter Foster, are
working. They will continue to grow in significance. We are encouraging our
operating units to launch more new publishing initiatives.

Against a somewhat more subdued economic backdrop, it's hard not to be wary of
what the short-term future may hold. Our expectations that the impact on our
business would be small, at worst, seem to be justified, as of now. Certainly,
as I mentioned earlier this year, publishers are recovering their nerve, after
a period of sleepless nights worrying about the impact of the Internet on
retailing, and of electronic publishing, on books. We remain committed to the
notion that publishing is all about producing material in an edited, targeted,
and attractive form, and that data management is an entirely different
business.

Even when, in the nineteenth century, book publishing was followed as a '
growth' industry, only a small minority of the population used its products.
The situation is not really much different now and, as we put our entire house
in order, we are positioning ourselves to return to the path of growth.



Laurence F Orbach

Chairman and Chief Executive                            16th August, 2001




                      UNAUDITED PROFIT AND LOSS ACCOUNT

                     for the six months to June 30, 2001


                                                     Six       Six        Year
                                                  months    months
                                                   ended     ended       ended
                                                June 30,  June 30, December 31,
                                                    2001      2000        2000
                                                   £'000     £'000       £'000

Turnover                                          30,172    29,982      73,564

Operating profit before amortisation of
goodwill and exceptional items                     1,924     1,817       6,088
Amortisation of goodwill                            (35)      (20)        (58)
Exceptional items                                      -         -       (457)


Operating profit after amortisation of
goodwill and exceptional items                     1,889     1,797       5,573
Net interest payable                               (948)     (981)     (2,023)



Profit on ordinary activities before taxation        941       816       3,550
Taxation                                           (117)      (83)       (314)



Profit on ordinary activities after taxation         824       733       3,236
Minority interests                                 (185)     (191)       (413)


Profit for the period                                639       542       2,823


Dividends
Ordinary                                           (394)     (394)       (807)
Preference                                         (228)     (228)       (455)



Retained Profit (Deficit) for the period              17      (80)       1,561


Earnings per share                                  2.3p      1.8p       13.2p


Underlying earnings per share                       2.5p      1.9p       16.1p






                     UNAUDITED CONSOLIDATED BALANCE SHEET

                               at June 30, 2001


                                                 June 30,   June 30,   December
                                                                            31,
                                                     2001      2000        2000
                                                    £'000     £'000       £'000
Fixed assets
Intangible assets                                   1,167       773       1,202
Tangible assets                                     6,383     6,339       6,141

                                                    7,550     7,112       7,343

Current assets
Stocks and work in progress                        22,459    19,406      18,709
Debtors                                            23,023    23,769      26,503
Cash at bank and in hand                            5,740     4,634       9,691

                                                   51,222    47,809      54,903

Creditors:  Amounts falling due within one year  (21,554)  (20,690)    (26,642)

Net current assets                                 29,668    27,119      28,261

Total assets less current liabilities              37,218    34,231      35,604

Creditors:  Amounts falling due after
more than one year                               (33,107)  (31,086)    (31,337)

Provisions for liabilities and charges
Deferred taxation                                 (1,249)   (1,350)     (1,202)


Net assets                                          2,862     1,795       3,065


Capital and reserves
Called up share capital                             1,341     1,341       1,341
Reserves                                          (1,991)   (2,689)     (1,404)


Shareholders' funds                                 (650)   (1,348)        (63)
Minority interests                                  3,512     3,143       3,128


                                                    2,862     1,795       3,065



                          UNAUDITED CASH FLOW STATEMENT

                       For the six months to June 30, 2001

                                                      Six       Six        Year
                                                   months    months       ended
                                                    ended     ended    December
                                                 June 30,  June 30,         31,
                                                     2001      2000        2000
                                                    £'000     £'000       £'000

Operating profit                                    1,889     1,797       5,573

Non-cash items                                        597       547       1,180

Working capital movement, net                     (4,466)   (4,114)       (344)

Net cash inflow/(outflow) from operating
activities                                        (1,980)   (1,770)       6,409

Interest, net                                     (1,140)     (982)     (2,023)

Dividends                                           (639)     (715)     (1,332)

Taxation                                            (141)     (381)       (627)

Capital expenditure, net                            (703)     (421)       (774)

Acquisitions and disposals                          (271)   (1,086)     (1,471)


Net cash (outflow)/inflow                         (4,874)   (5,355)         182

Translation difference                            (1,394)   (2,123)     (2,286)


Net debt at beginning of period                  (22,998)  (20,894)    (20,894)

Net debt at end of period                        (29,266)  (28,372)    (22,998)





The cash outflow with regard to acquisitions and disposals relates to prior
period acquisitions.


Notes:


1.                  The financial information contained in this interim
statement does not constitute statutory accounts within the meaning of Section
240 of the Companies Act 1985.  The interim accounts for the six months ended
June 30, 2001 and the comparative figures for the six months ended June 30,
2000 are unaudited.  The comparative figures for the year ended December 31,
2000 are extracted from the accounts for the period which have been reported
on by the Company's auditors and delivered to the Registrar of Companies.  The
report of the auditors was unqualified and did not contain a statement under
Section 237 (2) or (3) of the Companies Act 1985.


2.                  The exceptional items in the year ended December 31, 2000
relate to restructuring costs principally with regard to the relocation and
operational mergers of co-edition businesses.


3.                  Taxation is based on the estimated effective tax rate for
the year.


4.                  The interim dividend is 2.2 per share net (2000: 2.2p) and
will be paid on October 23 2001 to shareholders on the register at the close
of business on September 28, 2001.


5.                  The calculation of earnings per share is based on
17,925,306 shares (the number of issued shares less the shares held as
treasury stock) in each period and earnings, after minority interests and
preference dividends, of £411,000 (June 30, 2000: £314,000; December 31, 2000:
£2,368,000).  The calculation of underlying earnings per share is based on
earnings of £446,000 (June 30, 2000: £334,000; December 31, 2000: £2,883,000),
calculated as follows:


                                              June 30,   June 30,  December 31,
                                                  2001       2000          2000
                                                 £'000      £'000         £'000
Earnings after minority interests and
preference dividends
                                                   411        314         2,368
Exceptional items                                    -          -           457
Amortisation of goodwill                            35         20            58

                                                   446        334         2,883