Issue of Equity

 11 March 2011

Merchant House Group Plc

Successful Integration of Acquired Business of The Clarkson Hill Group Plc and Completion of Placing

Integration of Clarkson Hill

Merchant House Group Plc ("The Company") (LSE: MHG.L) is pleased to announce that, further to its announcement of 23rd December 2010, it has successfully integrated the acquired assets of Clarkson Hill Group Plc ("CHG") with its new financial planning business, Merchant House Financial Services ("MHFS"), a subsidiary of the Company. The Company is particularly pleased to announce that some 120 former CHG Independent Financial Advisers ("IFAs") have joined MHFS, with 32 now formally registered with the FSA. We expect the FSA to register consistently now that it has approved the applications of the first group of advisers.

MHFS now represents £541 million in assets under supervision and in excess of 30,000 clients. In addition to those assets within MHFS, Merchant House Group, through its subsidiary Merchant Capital, also represents £350 million of clients' assets in structured products and $50 million under management within its absolute return UCITS division, giving a total of assets under management, administration and supervision approaching £1 billion.

The Company expects MHFS to be a significant contributor to the Company's revenue in 2011. MHFS now has offices in Cardiff, London, Northampton, Plymouth and Truro, with a head office in London, trading as "Merchant House Financial Services". This network gives it the broad geographic reach necessary to further extend its client base in the United Kingdom.

Share placing

MHG is pleased to announce that it has today issued 207,518,797 new ordinary shares of 0.01 pence each in the Company at 0.16625 pence per share (the "Placing Shares"). The placing has yielded £345,000 gross of expenses. These funds have been raised to support the growth and development of Merchant House Financial Services as outlined above.

The Company has received notification that Liberty Capital Limited have disposed of 111,000,000 shares

The Company has today issued 283,000,000 new ordinary shares of 0.01 pence each in the Company at 0.05 pence per share by way of conversion of £141,500 of New Convertible Loan Notes subscribed for by Liberty Capital Limited under the Proposals contained in the Company's circular to shareholders dated 3 August 2010 and which were approved at the Company's general meeting held on 31 August 2010 (the "Conversion Shares"). As a result of these transaction, Liberty Capital now owns 532,000,000 ordinary shares in its own name and as nominee for others representing 29.7% of the enlarged issued share capital of the Company.

The Placing Shares, which will represent 11.6 per cent. of the enlarged issued share capital of the Company, will rank pari passu in all respects with the existing ordinary shares in the Company and the Conversion Shares, which will represent 15.78 per cent. of the enlarged issued share capital of the Company, will also rank pari passu in all respects with the existing ordinary shares in the Company. Application has been made to the London Stock Exchange for the Placing Shares and Conversion Shares to be admitted to trading on AIM and admission is expected to commence on or around 17 March 2011.

Following the placing and coversion, the issued share capital of the Company will comprise 1,794,518,823 ordinary shares of 0.01p each.

Christopher Day, CEO of Merchant House Group Plc, said: "We are very pleased to report that Merchant House Financial Services is going from strength to strength and is now solidly positioned to contribute to the continuing growth of group revenue. The successful placing puts us on a sound financial footing to support our consolidation and growth strategies and drive the business forward."

MHFS provides fee- and commission-based financial planning services in the United Kingdom, covering regulated products such as life assurance, pensions, collective investment schemes, term assurance, structured products, permanent health insurance and medical expenses insurance.

MHFS is an Appointed Representative of TenetConnect Ltd, which is authorised and regulated by the Financial Services Authority of the United Kingdom.

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