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Tuesday 31 August, 1999

VI Group PLC

Interim Results

31 August 1999
               Interim Results for the six months to 30 June 1999             
VI Group plc ('VI' or 'the Group'), one of the leading CAD/CAM software
designers and distributors, today announces its results for the six month
period to 30 June 1999.


* Turnover up 20% to £2.2m (1998: £1.8m)

* Profit on ordinary activities before exceptional costs and taxation up by   
  174% to £137,000 (1998: £50,000)

* Return to profitability with retained profit on ordinary activities after   
  taxation of £74,000 (1998: loss of £28,000)

* Refocusing the US business near Chicago, the heartland of the US mould and  
  die industry

* Strong recovery in Japanese market and solid earnings growth in the largest 
  European markets

* The innovative VISI-Series progressive die package is creating significant  
  interest from large potential customers in the VISI Series product range

Commenting on the interim results Don Babbs, Chief Executive of VI, said:

'These interim results reflect the progress in focusing on specific market
sectors in our core and new territories. With the recent reorganisation of the
US operations and the successful transition of European operations from
Belgium, we are well placed to continue expansion through the introduction of
specific high productivity CAD/CAM software technology. Early indications are
that the VISI-Series progressive die package presents a very exciting
opportunity which has significant potential for the VI Group.'

For further information, please contact:

Peter Wharton                                       Tel: 01453 732900
Finance Director

Bobby Morse                                         Tel: 0171 606 1244
Merlin Financial

Attached:Chief Executive's Statement
         Unaudited Consolidated Profit and Loss Account
         Unaudited Consolidated Statement of Total Recognised Gains and Losses
         Unaudited Consolidated balance sheet
         Notes to the Accounts

Chief Executive's Statement

I am pleased to report good progress for VI Group plc during the six month
period to 30 June 1999. Turnover has risen by 20% to £2.2 million (1998:
£1.8m), with earnings per share improved to 0.37 pence (1998: loss of 0.17p).

In Europe, growth in turnover was 9% overall compared to the first half of
1998, and represents the majority of the group's turnover. The transition of
the Belgian branch into a privately owned distributor for our products was
successfully completed with the transfer of our customer relationships to the
UK. The decision to reorganise this aspect of our European business has proved
itself in the strong growth in demand we have  experienced from these
customers. New territories such as Scandinavia and France also added to the
growth in turnover, although our distribution in these markets is in the early
stages of development. In the UK, turnover was lower, mainly as a result of a
weaker manufacturing sector. Within the Benelux region, where business is now
through an indirect channel following the reorganisation, turnover was reduced
as we had anticipated, but there have been the compensatory benefits of
substantial cost savings. 

In North America, turnover was similar to last year but it still represents a
small part of the group's overall sales. Our decision to focus the group's
strategy on specific specialist sectors of our market, led the board to review
the US operation. As a result of this review the decision was taken to close
our office in Hartford, Connecticut and to expand  our operation in Mount
Morris near Chicago, which is the heartland of the mould and die industry. In
addition a new competence centre has been established in Toronto to access the
important Canadian market. At the same time internal management
responsibilities have been changed to increase the emphasis on expanding our
business in the US. Overall, it is expected that these changes will bring cost
efficiencies which should be reflected in the second half of 1999. In
addition, the Trans Global Services Inc agreement has been amended to that of
a support role to our growing dealer network. 

In Asia growth in turnover was 139%, mostly due to a strong recovery in the
Japanese market from the adverse trading conditions in the first half of 1998.

Marketing initiatives have been accelerated and our new web site
( has shown a rapid increase in the number of
visitors from all over the world.

Board Changes 

In order to focus on emerging developments in his venture capital business,
David Bentata decided not to stand for re-election for the position of
Chairman and non-executive director at the Annual General Meeting in May. As a
result, the board is currently seeking to appoint an additional non-executive

VI Group believes that the basis for attaining the highest productivity within
the next generation of CAD/CAM system is to build software with integral
knowledge of each design and manufacturing process. On this basis, our product
development and marketing strategy continues to provide an advanced
geometrical base and highly specific CAD or CAM applications. This provides a
competitive advantage by making our solutions the most productive in chosen
sectors such as the mould and die manufacturing sector. 

The innovative progressive die option of VISI-Series, which provides a unique
solution for the progressive die market, is a good example of how  specific
functionality can provide outstanding benefits to customers. This option has
been instrumental in generating interest in the VISI-Series product range from
new customers, including some well known enterprises.


Although the performance across different territories and economic regions has
been mixed during the period, solid performance in core markets, growth in new
territories and the acceptance of new products provides a strong endorsement
for the future potential of our software technology. It is expected that the
group will continue to benefit from increasing market share in territories
where our presence is small and in our mature markets through the continuing
advancement in our technology and greater brand recognition.

Don Babbs
Chief Executive
31 August 1999

                                 VI Group plc                                 
                Unaudited Consolidated Profit and Loss Account                
                      for the six months to 30 June 1999                      

                                Six months to  Six months to Twelve months to
                                 30 June 1999   30 June 1998      31 December
                                    Unaudited      Unaudited          Audited
                                         £000           £000             £000

Turnover                                2,201          1,828            4,117
Cost of sales                            (435)          (293)           (639)
Gross profit                            1,766          1,535           3,478
Selling expenses                         (838)          (792)         (1,851)
Administrative expenses                  (555)          (425)         (1,021)
Product development                      (281)          (283)           (593)
Other operating income                     39              -              10
Operating profit                          131             35              23
Net interest and similar charges            6             15              11
Profit on ordinary activities before
exceptional costs and taxation            137             50              34
Exceptional costs                           -            (69)          (367)
Profit on ordinary activities 
before taxation                           137            (19)         (333)
Taxation on profit on ordinary activities (63)            (9)         (109)
Retained Profit/(Loss) on ordinary 
activities after taxation                  74            (28)         (442)
Earnings/(loss) per share(pence)         0.37p         (0.17)p        (2.4)p
Weighted average number of shares 
in issue for the period (thousands)    20,000         16,982        18,573

Unaudited Consolidated Statement of 
Total Recognised Gains and Losses 

                                Six months to  Six months to Twelve months to
                                 30 June 1999   30 June 1998      31 December
                                    Unaudited      Unaudited          Audited
                                         £000           £000             £000

Profit/(loss) for the period               74            (28)            (442)
Exchange movements                        (20)           (26)              27
Total recognised gains and (losses)        54            (54)            (415)

                                 VI Group plc                                 
           Unaudited Consolidated Balance Sheet As at 30 June 1998            
                                          As at          As at         As at
                                   30 June 1999   30 June 1998   31 December
                                      Unaudited      Unaudited       Audited
                                           £000           £000          £000

Fixed assets:                                                 
Intangible fixed assets                     137             94            89
Tangible fixed assets                       440            312           509
Investments                                   1              1             1
                                            578            407           599
Current assets:                                                 
Stock                                        15             25            17
Debtors                                   1,875          1,486         2,023
Cash at bank and in hand                  1,091          2,207         1,277
                                          2,981          3,718         3,317
Creditors: amounts falling due 
within one year                          (1,077)        (1,392)       (1,299)
Net current assets                        1,904          2,326         2,018
Total assets less current liabilities     2,482          2,733         2,617
Creditors: amounts falling due after 
more than one year                         (135)          (158)         (192)
Provisions for liabilities and charges     (250)          (171)         (382)
Net Asset                                 2,097          2,404         2,043
Capital and reserves:                                                 
Share capital and share premium           2,458          2,458         2,458
Other reserves                               10              -             5
Profit and loss account                    (371)           (54)         (420)
Equity shareholders' funds                2,097          2,404         2,043

Notes to the interim results

1. The unaudited results for the six months to 30 June 1999 have been prepared
   on the basis of accounting policies consistent with those adopted for the  
   year ended 31 December 1998, as stated in the report and accounts for the  
   group. The financial information does not constitute statutory accounts    
   within the meaning of Section 240 of the Companies Act 1985. The unaudited 
   results for the six months to 30 June 1998 as reported in the interim      
   results for the half year ended 30 June 1998, have been restated to apply  
   accounting treatments consistent with those adopted in the annual report   
   and accounts for the year ended 31 December 1998. The net effect is to     
   increase the retained loss from £20,000 to £28,000. Statutory accounts for 
   the year ended 31 December 1998, incorporating an unqualified audit report,
   have been filed with the Registrar of Companies.

2. The directors do not propose any payment of a dividend.

3. Earnings/(loss) per share have been calculated on the retained             
   profit/(loss) for the period divided by the weighted average number of     

4. The directors have considered the impact of the Year 2000 on the operations
   of the business. Steps are underway to address the risks associated with   
   this issue. The estimated costs of any changes are expected to be minimal.

5. Copies of the interim report will be posted to shareholders and made       
   available to the public at the Company's registered office, The Mill,      
   Brimscombe Port, Stroud, Gloucestershire GL5 2QG, or by calling the FT     
   report service on 0181 770 0770.