Strategic Update

SMG PLC
12 April 2007




THIS ANNOUNCEMENT IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN OR INTO THE
UNITED STATES, AUSTRALIA, CANADA OR JAPAN

This announcement is an advertisement and not a prospectus and investors should
not purchase any shares referred to in this announcement except on the basis of
information in the prospectus to be published by Virgin Radio Limited ('Virgin
Radio') which is to be re-registered as a public company prior to listing.
Copies of the prospectus will, following publication, be available from Virgin
Radio's registered office at Pacific Quay, Glasgow, G51 1PQ.

SMG outlines new strategy and announces plans for Initial Public Offering of
Virgin Radio

The Board of SMG plc ('SMG') announces today some key components of its strategy
for the business and its intention to list Virgin Radio by way of an Initial
Public Offering (IPO).

The Board will focus SMG on TV as its core business. The CEO, Rob Woodward, is
executing a turnaround plan for TV which will be detailed in June. The TV
leadership has already been strengthened by two senior and proven executives.

The Board considers Primesight to be an excellent business. The current sale
process for Primesight has been terminated, because the Board has judged the
price achievable, although in the range of market expectations, as too low. The
Board believes this is due to the historically weak position of SMG as a seller.
SMG now has the financial and leadership stability to initiate a fresh sales
process for Primesight, when the Board decides this is appropriate.

SMG intends to seek a separate quotation for Virgin Radio over the coming
months. There has been considerable investment in Virgin Radio during the last
year: in broadcast talent and online content, in sales and marketing, and in
platform expansion and digital rollout. The Board anticipates that Virgin
Radio's IPO will create a strong and focussed radio business, with a great
brand, that will provide an attractive, pure-play investment opportunity.

Virgin Radio is one of the UK's three national radio licences and is the only
national station with a pop and rock format. It broadcasts in analogue format on
AM and digitally on DAB, satellite television, digital terrestrial television
and online in addition to holding a London FM licence. Virgin Radio has 2.5
million listeners across the UK, principally in the 20-44 year old age bracket -
a particularly attractive demographic group to advertisers.

Virgin Radio has consistently outperformed the UK radio market and displays
particular strengths in sponsorship and promotions. Its iconic brand and
multi-platform stance puts the business in a unique position to capitalise on
digital listening where it already out-competes the market average by a
considerable margin.

The Board of SMG believes that the proposed IPO will provide both a strong
platform for Virgin Radio's future growth and the right strategic focus and
balance sheet structure for SMG's TV business.

LongAcre Partners and Hoare Govett Ltd will act for SMG in this transaction and
further details of the proposal will be announced in due course.

Commenting on the announcement, Richard Findlay, Chairman of SMG, said:

'This is the right strategic decision for SMG, increasing our focus on TV whilst
reducing debt. Virgin Radio is one of the great brand names in media with an
attractive national audience, strong relationships with advertisers and a clear
growth strategy. As a quoted company it will have the best management and
capital structure to support its future growth, and will make for an attractive
pure radio investment opportunity.'

12 April 2007

Ends

Further Enquiries:

Ash Spiegelberg / James Hogan, Brunswick - 020 7404 5959

Sara Hale / John Fishley, Hoare Govett - 020 7678 8000

Jonnie Goodwin / Julian Culhane, LongAcre Partners - 0207 759 4627

This communication is directed only at (i) persons having professional
experience in matters relating to investments who fall within the definition of
'investment professional' in Articles 19(5) of the Financial Services and
Markets Act 2000 (Financial Promotion) Order 2005 (the 'FPO'); or (ii) high net
worth bodies corporate, unincorporated associations and partnerships and
trustees of high value trusts as described in Article 49(2) of the FPO. Any
investment or investment activity to which this communication relates is only
available to and will only be engaged in with such persons and persons who
receive this communication (other than persons falling within (i) and (ii)
above) should not rely or act upon this communication. Accordingly this
announcement is exempt from the general restriction set out in Section 21 of the
Financial Services and Markets Act 2000 ('FSMA') and has not been approved by a
person who is authorised under FSMA.

This announcement does not constitute or form part of any offer of securities,
or constitute a solicitation of any offer to purchase or subscribe for
securities, and any acquisition of or application for shares in the IPO should
only be made on the basis of information contained in the prospectus to be
issued in due course in connection with the IPO, and any supplement or amendment
thereto.

This announcement is not for release, publication or distribution, directly or
indirectly, in or into the United States, Australia, Canada or Japan.

This announcement does not constitute an offer of securities for sale in the
United States. The securities referred to herein have not been and will not be
registered under the US Securities Act of 1933 (the 'Securities Act'), and may
not be offered or sold in the United States unless they are registered under the
Securities Act or pursuant to an available exemption therefrom. No public
offering of securities of Virgin Radio is being made in the United States.

Certain statements in this announcement are forward-looking statements. Such
statements are based on current expectations and are subject to a number of
risks and uncertainties that could cause actual results or events to differ
materially from those expressed or implied by the forward-looking statements.

This does not constitute a recommendation concerning the IPO. The value of
shares can go down as well as up. Past performance is not a guide to future
performance. Potential investors should consult a professional advisor as to the
suitability of any offering for the individual concerned.




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