Trading Update & Board Change

Diagonal PLC 24 May 2004 FOR IMMEDIATE RELEASE 24 May 2004 Diagonal Plc TRADING UPDATE AND BOARD CHANGES Trading update Approaching the end of the half year to 28 May 2004, the Board expects that profit before tax, exceptional items and goodwill for the first six months will be in accordance with the guidance given at the time of the last preliminary results announcement and it is therefore expected to exceed the level achieved in the second half of the year ended 28 November 2003. In addition, the results for the first half year will benefit from an exceptional credit of approximately £250,000 as a result of the settlement of the commercial dispute referred to in the results for last year. Looking forward, the Board notes that although Diagonal's markets have seen some improvement, not all sectors and geographies have experienced these better trading conditions. The Board is confident in its strategy for developing the group's businesses but recognises that some further reduction in costs may become necessary. In reviewing the prospects for the year as a whole, the Board has concluded that while it expects Diagonal's recovery to continue, this progress will be insufficient to meet current market expectations. Diagonal will announce its interim results on 13 July 2004 and will give a detailed update on all aspects of the business at that time. Board changes The Board announces that, due to health grounds, Colin Burnside has decided to step aside as Chief Executive Officer. Colin was one of the original founders of Diagonal and became CEO in July 2003. It is expected that Colin will continue to make available to Diagonal his substantial industry experience and high level contacts. Malcolm Gloak has been appointed Executive Chairman with immediate effect. Malcolm joined the board in June 2003 and became non-executive Chairman in March 2004. He will remain as Executive Chairman until a new Chief Executive is appointed. It should be noted that in recent months Diagonal's operational and financial management team has been strengthened with new Managing Directors appointed to each of the operating divisions and Martin Andrews appointed as Finance Director. Ends Enquiries: Diagonal: Malcolm Gloak, Chairman 01252 736 600 or 07976 439 651 Martin Andrews, Finance Director 01252 736 680 or 07739 517 699 Bankside: Steve Liebmann 020-7444-4163 or 07802-888159 This information is provided by RNS The company news service from the London Stock Exchange