Trading Update

Quarto Group Inc
23 October 2003



                              THE QUARTO GROUP, INC

                                 Trading Update


Quarto's sales for the nine months ended 30 September 2003 were £54.8 million
(2002: £52.6 million), up 4%, with profits, before tax and goodwill
amortization, of £3.17 million (2002: £2.47 million), an increase of 28%.


'This is a good result,' said Laurence F Orbach, Quarto's Chairman and Chief
Executive. 'After a weak second quarter, clouded by the Iraq war, sales in the
third quarter bounded back. Profits were encouraging and, on this basis, we
believe that we should meet market expectations for the full year. The decline
in the dollar has masked the extent of our sales growth which, on a constant
currency basis, is closer to 10%. The impact of the dollar's decline on the
bottom line is much less, because Quarto incurs many of its costs in dollars or
dollar-associated currencies.


'During the quarter, we published the second and third titles by Dana Carpender,
author of our best-selling 500 Low Carb Recipes, and we are very proud also to
have released, to our co-edition partners, our new encyclopedia of plants,
Flora. Flora is the most comprehensive and authoritative illustrated
encyclopedia of plants ever published, containing some 20,000 plants, of which
12,000 are illustrated. It is the culmination of enormous effort and investment
by the staff of our Sydney-based co-edition book publishing unit, Global Book
Publishing, and is to be the kernel of an entire range of authoritative,
illustrated guides to the world of plants.


'Two of our new co-edition illustrated book publishing units have had great
success with their first titles: 75 Years of Oscar Fashion (Eye), and Household
Management for Men (Qu:id).


'We have just participated in the annual Frankfurt Book Fair, which is not only
the world's most important book fair but, by number of participating businesses,
is also the world's largest trade fair. Although the German economy remains
subdued, we felt that this was the most productive trade fair in recent years,
with comforting evidence that demand for our titles is returning in some markets
that have been quiet, particularly in the Far East and South-East Asia.


'Our financial position continues to be robust. Cash generation remains strong,
helped by the focus on collections and operations. For the last five years
Quarto has converted between 115% and 142% of its operating profits into cash,
and has continued to do so in the current period. On a year-on-year basis, debt
is down by £1.3 million, after additional capital expenditure of approximately
£3.3 million, spent on purchasing and equipping a new factory building for our
publishing services unit.

'Quarto also prepares its accounts on a trailing twelve-months' basis. These
show that operating margins have improved to 8.7% (2002: 8.5%), and that
interest cover is at a healthy 6.9x (2002: 5.3x). Quarto has paid great
attention to operations, without undermining the vitality and creativity of our
publishing lists, and I'm pleased that the effort has been rewarded. There is
always more to be done, but I'm happy to report that most of our units are now
meeting the demanding operating targets that managements have been set, and the
few units that are still underperforming are being attended to closely.


'With our strong cash generation, healthy interest cover, solid management
skills, and entrepreneurial spirit, Quarto is well positioned to grow. A new
magazine is being launched in November, with another planned for spring 2004.
These, together with the recent creation of a new unit focussed on the
children's educational market, reflect our commitment to growing our businesses
organically. But, there is also considerable scope for making acquisitions, to
add to our publishing division's growing strengths. We continue to explore all
interesting opportunities, on a regular and on-going basis.


'Last week we announced that, with Quarto's board broadening the scope of its
strategic review, the closing date for J O Hambro Capital Management's tender
offer had been postponed. We shall continue to keep shareholders informed of
developments over the coming months, and assure shareholders that we are working
to ensure the best outcome for them.'


                                ******ends******

Notes for Editors:

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


 Quarto's Publishing Division primarily publishes books, under imprints owned by
 the Group, and art prints, mainly for their domestic markets in the US and
 Australia. In addition, it includes two UK-based publishing services businesses
 primarily serving the point of sale display market, Western 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.
Laurence F Orbach (Chairman & CEO)                               020-7700 9003
Mick Mousley (Finance Director)                                  020-7700 9005

Bankside Consultants Limited
Charles Ponsonby                                                 020-7444 4166




      Trading Results (Unaudited) for the Period ended 30 September 2003*

                                                   2003                   2002
                                                   £000                   £000
                                          
Nine Months ended 30 September
                                                                       
Sales                                            54,804                 52,649
                                                 ========               ========

Operating Profit                                  3,873                  3,354
                                                                          
                                                                         
Interest                                           (704)                  (881)
                                                  -------              ---------

Trading Profit                                    3,169                  2,473
                                                  =======               --------



Trailing Twelve Months ended 30 September
-------------------------------------------

                                                                         
Sales                                            76,890                 76,303
                                                 ========               ========

Operating Profit                                  6,725                  6,507
                                                                        
                                                     
Interest                                           (974)                (1,226)
                                                ---------            -----------
                                                               
Trading Profit                                    5,751                  5,281
                                                  =======                =======

*These figures exclude goodwill amortization





                      This information is provided by RNS
            The company news service from the London Stock Exchange