RNS No 7834x
CEDAR GROUP PLC
23rd October 1998


                      QUALTECH LIMITED

The  Board of Cedar Group Plc ("Cedar Group") is pleased  to
announce  that  an agreement has been reached to  accelerate
the  acquisition  of  the entire share capital  of  Qualtech
Limited  ("Qualtech") and assets of Dawn Technology Limited.
These  new arrangements supersede the staged option purchase
agreement entered into in November 1997.

In  its  first  year of operation Qualtech has  attracted  4
'early  adopter'  customers for its  new  REACH  measurement
service  and has secured call measurement business with  two
market  leaders in the financial services industry, together
with  a  pipeline  of  prospective customers  in  the  wider
services  industry.  The value of its service in determining
the  effectiveness  of customers' call centres  is  becoming
increasingly   apparent,   both   in   fulfilling   business
objectives,  and as the basis for improving agent  retention
and motivation through the targeting of their remuneration.

During  the  year to 30th September 1998, Qualtech  achieved
63%  margins  on #143,000 of Sales.  However, investment  in
the   service  delivery  software  and  the  sales  activity
required  to  secure  the currently  available  pipeline  of
prospects  led to a pre-tax loss for the period of  #121,000
and net liabilities of #445,000, funded by a trade loan from
Cedar Group.

The  extent  of the business opportunity and  the  need  for
Qualtech  to service rapidly accelerating levels of business
in  the  short term, gave rise to discussions between  Cedar
Group  and the vendors.  The benefits of this agreement  are
that  it  secures  both the timely expansion  of  Qualtech's
facilities  and a reduction in the consideration payable  by
Cedar Group for the businesses.

The revised consideration of #4 million comprises an initial
cash payment at completion of #150,000 and the issue of loan
notes  to a value of #3.85 million.  #2.85 million  of  loan
notes  will mature on 1st October and 1st November  1999  of
which  #1 million will carry a 5% coupon.  The balance  will
not  mature  until November 2001 and will  then  convert  to
Cedar Group 5p Ordinary Shares at the Company's discretion.



Enquiries:

Chris Ellis
Finance Director
Cedar Group Plc          Tel: 01932-584 000


END

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