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Milestone Group PLC (CTEA)

Milestone Group PLC

First Day of Dealings
Milestone Group PLC
01 July 2003


For Immediate Release                                        Tuesday 1 July 2003


NOT FOR DISTRIBUTION IN THE UNITED STATES, CANADA, JAPAN AUSTRALIA OR THE
REPUBLIC OF IRELAND


                              MILESTONE GROUP PLC

                            FIRST DAY OF DEALINGS ON
                       THE ALTERNATIVE INVESTMENT MARKET


Milestone Group PLC ('Milestone' or 'the Group'), the new cross-media group
focussing on local markets, today announces the commencement of dealings of its
Ordinary Shares on the Alternative Investment Market ('AIM'). Collins Stewart is
the nominated adviser and broker to Milestone.

Placing Statistics

Placing Price per Ordinary Share                                           100p
Number of Ordinary Shares Placed                                    10,500,000
Total proceeds from the Placing (before expenses)                        £10.5m
Number of Ordinary Shares in issue immediately following Admission  21,599,976
Market capitalisation following the Placing at the Placing Price         £21.6m

Reasons For The Admission And Placing And Use Of Proceeds:

The Directors believe that admission to trading on AIM will be beneficial to the
Group and  intends to apply the net proceeds of the Placing as follows:

-    To satisfy the cash element of the acquisitions;

-    To repay debt; and

-    To meet the costs of the transaction and provide general working capital to
     finance the growth of the Group.

Commenting on the successful fund raising and flotation on AIM, Andrew Craig,
Chief Executive of Milestone, said:

'The flotation, which has been a great success, will be an important step in the
Group's strategy of becoming a serious player in the local media market place.
We have already demonstrated the success of the benefits of a cross-media model
in Basingstoke  and we intend to address the numerous opportunities for our
multi-platform offering throughout the UK.  The acquisition of the Courier Group
provides us with critical mass in our newspaper division and immediately gives
us the platform to implement a tri-media strategy in and around Oxford.  Through
this unique proposition, we believe that Milestone will create considerable
opportunities for local businesses to advertise to its communities far more
effectively than has been possible to date, whilst also providing our
shareholders with a significant growth proposition.'


For further information:

Milestone Group PLC                                  Tel: 01635 202 700
Andrew Craig - Chief Executive

Buchanan Communications                              Tel: 020 7466 5000
Bobby Morse / Bobbie Swanson

Collins Stewart                                      Tel: 020 7523 8700
Paul Davies


BACKGROUND INFORMATION

Introduction

Milestone will exploit the ownership of cross-media assets in local markets to
maximise commercial revenues. The Milestone local media portfolio will operate
across three complimentary delivery platforms - publishing, radio and television
- to drive audience and revenues to each other as part of a powerful cross-media
offering.

Milestone delivery platforms will cross-promote each other and work together to
achieve incremental revenues and economies of scale. Advertising solutions will
be developed for clients seeking to promote themselves across multiple media
platforms.  Milestone will use in-house publishing and broadcasting expertise to
produce locally-focused editorial content which seeks to build audience and
advertiser loyalty across its brands. The Group's operations cover some of the
wealthiest parts of the UK and are well placed to exploit cross-media
convergence to build a cash-generative advertising based business.

On completion of the acquisitions of its current targets, Milestone will own the
following assets:

  • Nine free local publications;

  • Six local radio stations of which three are wholly owned and three are
    majority owned. In addition, the Group will have a 37 per cent. holding in a
    further independent local radio ('ILR') station broadcasting to the Reading
    area; and

  • One local television station based in Oxford.

The Board believes that the opportunity exists for a dynamic new cross-media
group to exploit the potential for commercial revenues in local marketplaces.
The Group's flotation on AIM and the Placing will help fund its formation and
its working capital requirements, raise its profile, retain key staff and
facilitate opportunities to offer quoted securities for businesses it is
interested in acquiring.

Strategy

Milestone is seeking to position itself to become a significant player in local
publishing, local radio and local television. The Directors believe that there
is an opportunity to exploit the ongoing localisation of media and the enduring
desire of many people to be knowledgeable about local affairs.

The Basingstoke Model

The Directors believe that the benefits of the cross media model have been
proven in Basingstoke where the ILR station Kestrel FM served as a springboard
to launch a new local newspaper, the Basingstoke Observer, in April 2000. The
Basingstoke Observer has become an established local newspaper in an area
previously dominated by one single local publisher. The Directors believe this
success would not have been possible, within the budget and timescale achieved,
without the relationship with Kestrel FM. Furthermore, the promotional
opportunities afforded by the Basingstoke Observer to the radio station have, in
the opinion of the Directors, helped Kestrel to increase its RAJAR audience
reach in a competitive marketplace. Milestone will seek to replicate the model
of publications working in partnership with complimentary media in other local
marketplaces.

The tri-media model - Oxford

Milestone intends to develop a tri-media model for Oxford with the local radio
station, Passion 107.9, local publications and SIX TV cross-promoting each
other. A telesales team will be engaged to sell classified advertisements
carried both in local publications and on SIX TV's teletext service. Appropriate
content sharing opportunities will be explored between the three platforms.
Joint sales and programming initiatives will also be explored such as a property
programme on SIX TV cross promoted in local publications. The Directors believe
significant economies of scale and incremental revenues can be achieved with
three platforms co-operating under common ownership in a single marketplace.

New licences

Milestone will seek to own or establish partnerships with groups aspiring to
launch new ILR stations or Local Television Licences in those areas where the
Board believe they would be appreciated by advertisers, listeners and/or
viewers. In addition, Milestone will lobby the Regulators to make new licences
available in areas where the Directors believe that it would be beneficial for
the Group to operate new services.

New publications

Milestone will explore opportunities to rollout its successful local publishing
formats to new geographic areas, particularly where it sees a potential for
future cross-media ventures.

Acquisition strategy

The Directors believe that there is an opportunity for consolidation in the
media market. Milestone will explore opportunities to enhance shareholder value
through acquiring further interests in radio, publishing, television or other
businesses that are complimentary to the business of the Group with an initial
focus primarily on exploring opportunities in the Midlands and the South and
West of England.

The Business

Milestone's business will comprise of three main operating divisions: a
Publishing Division, a Radio Division and a Television Division. The Directors
believe benefits will be seen from the divisions working together to produce
quality content, to promote each other's services and to develop joint revenue
opportunities.

Publishing Division

Milestone's Publishing Division brings together two previously independent
publishing companies, the Courier Group and the Basingstoke Observer.  The
division publishes nine main titles covering significant parts of Oxfordshire,
Berkshire and North Hampshire with titles that include the Oxford Courier, South
Oxfordshire Courier, Auto Weekly, Thames Valley Weekly and the Basingstoke
Observer.

Revenue is currently primarily generated from selling advertising space.

Radio Division

The Group's Radio Division comprises the business of the Fusion Group and
ListenEar. The division currently has interests in seven radio stations licensed
by the Radio Authority with a combined RAJAR TSA (Total Service Area) of over
1.5m.  The radio stations include Passion 107.9 (100% owned by Milestone, based
in Oxford), Fusion 107.3 and Time FM (both 100% owned and in London), 107.6
Kestrel FM (54% owned, Basingstoke), 107.1 Rugby FM (52% owned, Rugby), Kick FM
(51% owned, Newbury) and Reading 107 FM (37% owned, Reading).

ListenEar is a company that specialises in radio consultancy services. ListenEar
is currently working with Fusion and other partners to lobby for new radio
licences to be advertised or awarded in six areas.

Television Division

Milestone's Television Division currently comprises one operating Local
Television Licence (SIX TV) and one pending new Local Television Licence
application for the Reading area in Berkshire.

SIX TV is the local television service for Oxford broadcasting 24 hours a day to
a large part of the Oxfordshire area.  SIX TV is the only local television
service dedicated to Oxfordshire with a range of programming catering for local
interests such as local information, lifestyle features, sport and music,
providing an outlet to local people and organisations who may previously have
found it difficult to gain significant television coverage. SIX TV has a
potential audience of approaching 390,000 people in Oxfordshire.

SIX TV's revenue is generated primarily from local advertising and programme
sponsorship. SIX TV offers teletext capability with SIX TEXT able to provide
up-to-date listings and other details about advertisers. In addition, revenue is
also generated through facilities hire to Endemol UK plc who currently use SIX
TV's premises to produce a live quiz show broadcast nationally each weekday on
channel five.

Current trading and prospects

The Directors are encouraged by the trading for the year to date and believe
that the Group is well placed to increase its revenues and to exploit the
current market opportunities. The future prospects of the Group are largely
dependent on the growth of the market for local advertising on and across its
own delivery platforms and consequently the Directors view the Group's future
with confidence.

The Directors believe that, by bringing the divisions together, economies of
scales will be achieved and other benefits seen through the platforms
co-operating to promote each other and developing new joint revenue
opportunities.  Where the Group holds contiguous assets, opportunities for
regional sales will also be explored.

The Board

Julian Blackwell, Non-Executive Chairman, aged 74

Julian Blackwell has worked in the Oxford-based  Blackwell bookselling and
publishing companies in many roles from packer to President. Julian was also the
launch Chairman of FOX FM from 1989 to 1998. In 2000 Julian was the
joint-founder (with Andy Craig) of Aroma Broadcasting Limited, formed to invest
in the new tier of terrestrial local television.

Andy Craig, Chief Executive, aged 48

Andrew has gained 25 years experience in professional broadcasting, mainly in
the field of news and current affairs, hosting both network programmes and live
regional programmes for ITV and BBC. Eight years ago Andrew founded Milestone
Pictures Limited with a view to establishing a profitable niche broadcasting
company. Until now Andrew has been Executive Chairman of MGH Investments Limited
(formerly Milestone Group Holdings Limited) overseeing the development of its
media interests and, in May 2002, Andrew became chief operating officer of the
Fusion Group. Andrew is currently contracted (until 10 November 2003) to provide
his services as a newsreader and presenter to Meridian Broadcasting Limited.

Brian Chester, Finance Director, aged 51

Brian joined Fusion in April 2000. From 1973 he spent 14 years working for
Philips Electronics in various financial roles. In 1987, he was appointed
financial controller of Bourne Publicity Limited and, following his promotion to
finance director in 1989, was instrumental in its sale to Bemrose Corporation
plc where he remained division finance director until January 2000. Brian brings
a wealth of both industry and financial expertise to the Group.

Mark Levine, Non-Executive Director, aged 26

Mark Levine is a portfolio manager with Elliott Advisors (UK) Limited, the
London arm of Elliott Associates, L.P., a New York based private investment
partnership. Elliott Associates, founded in 1977, along with its sister offshore
fund, Elliott International L.P., manages partners' capital of approximately
$3.2billion. The Elliott group has been the primary funding partner of Fusion
since its inception in November 2000.


                      This information is provided by RNS
            The company news service from the London Stock Exchange
Data provided by FE. Care has been taken to ensure that the information is correct, but FE neither warrants, represents nor guarantees the contents of information, nor does it accept any responsibility for errors, inaccuracies, omissions or any inconsistencies herein. Past performance does not predict future performance, it should not be the main or sole reason for making an investment decision. The value of investments and any income from them can fall as well as rise.

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