MICE GROUP SOON TO BE A QUARTER BILLION POUND COMPANY

First, let me start by wishing everyone and their loved ones a healthy, happy & prosperous New Year!

One can never say never, but looks like support has been maintained around 25-26p for now. Only time will tell.

Looking forward .... the problem historically has been through many aquisitions over the previous years this company had created high levels of debt, which through interest payments was affecting the cashflow, and the company poorly controlled its working capital.

As we know a £24.7m fund raising was completed in March 2005, which has significantly reduced the debt levels.

The financial years 2005/6 and 2006/7 are pivotal in refocusing the Group both
operationally and financially after the fund raising in March 2005. The company has embarked on an 18 month period of consolidation. In the past six months, the company has made good progress with the first phase of the rationalisation process nearing completion. In the period, the company has reduced management and manpower where appropriate, consolidated, closed or integrated poor performing businesses, exited from disadvantageous contracts and focused on overall working capital management. This has led to a positive swing in cash flow in the first half and improvements in working capital. These initiatives will continue. This will allow the company to move forward as a cash generative and highly focused integrated marketing services business.

In the first half results we saw an exception cost of £3m for the rationalisation programme. A further £3m is budgeted for in the second half, but after this the company does not anticipate any further costs associated with this.

The costs incurred during the half year comprise the initial repositioning of
underperforming businesses in Germany, the reorganisation to create an
integrated print offer within the UK Division, the streamlining of businesses
under defined and accountable leadership teams and the costs associated with the reduction in corporate overheads.

Costs to be incurred during the remainder of the year will fully cover the
repositioning of the International Division, complete the programme within the
UK Division and allow for the reorganisation of US businesses to maximise capacity utilisation.

The recent launch of 'Fusion', the integrated selling model, will be an
important driver of future organic growth. This new initiative has already
gained momentum with some excellent new client project wins. The company expects further progress in the second half of the year as it seeks to strengthen and extend our services and relationships with current clients. Significant potential opportunities exist within our relationships with 150 of the Fortune 500 companies.

Therefore,if the company through these actions can streamline the business, improve cashflow, working capital; continue to reduce debt, whilst still organically growing the business I believe this share will represent an excellent recovery play for 2006/2007.

The recent results showed
- Positive operating cash flow and working capital improvements
- Strong order book
- Group turnover up 7.4% to £99.3m (2004: £92.4m)
- Profit from operations (pre-exceptionals) at £4.7m (2004: £4.8m)
- Profit before tax (pre-exceptionals) at £3.1m (2004: £3.3m)
which wasn't bad considering the rationalisation programme taking place & the fact that for the International division a significant Xerox project which falls bi-annually was delayed, now secured for April 2006 period.

Growth in working capital has been minimised by the continuing improvements in
underlying debtor and creditor management together with the renegotiation of
contracts to provide better funding profiles.

Stabilisation of cash flow has been a key priority and in this regard considerable progress has been made. In the period, cash generated by operations was £3.2m compared to an outflow of £6.0m last year. It is expected that this trend will continue, making further improvements.

Net debt at the end of the first half was £38.2m compared to £49.0m at the end
of the comparable period last year and £56.7m at the year end. It is expected to see the £38.2m current debt level further reduced going forward.

I personally already have a modest holding in MEG, and when/if this starts to move decisively in the right direction I will add to my base holding on the rise upwards. I hope that when this does start to move we will develop some momentum which will keep it rising in an upwardly motion to around the 50-80p levels.

The boards priorities in the second half are on cash management, further debt reduction and organic growth. Next results due 21st May. Remember that as often the share price reflects future actions up to a year in advance I would expect this share to start to move upwards this year, especially leading up to May when it will become clear that thr ship has been totally turned around. Waiting until then may mean having to pay a premium to have the certainty of the turnaround.

Market cap £46m, Revenue £190m, No of shares 175m

IMHO - one to have on your monitor list going forward in 2006.

TTNY