Trading Update

26th August 2010

Archial Group Plc

Trading Update

Archial Group Plc ("Archial" or the "Group") (ARL.L), the architects and design business, provides the following update to the market.

The continuing economic slowdown and significant reduction in Government spending together with the well publicized uncertainty in the construction industry, has led to several of the Group's projects being cancelled and many being postponed or delayed.

The Group therefore reports that revenue and profit for the year to 31 December 2010 are now expected to be significantly below market expectations. The Group took cost saving action in Q4 2009 and again in Q2 of 2010. To reflect these lower anticipated trading volumes, the Group has now commenced a further programme of cost reductions expected to amount to an annualized saving of £4.25m.

The Group is also in discussion with HMRC with regards to amounts due in respect of prior tax years. Negotiations with regard to the scheduling of these payments are continuing. In the light of this and current trading conditions reported above, discussions are being held with the Group's bankers and principal shareholder with regard to financial support necessary to conclude these negotiations. The Group hopes to resolve this issue as soon as possible and will continue to update the market as appropriate.

Interim Results for the half year ending 30th June 2010 will be announced on the 29th September 2010.

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