Result of strategic review and implementation of fundamental restructuring programme

Cambridge, 17th September 1998 - Acorn Group plc, the technology design and solutions company, today announced that following a strategic review of its operations, it is implementing a fundamental restructuring programme which will enable the Company to become more focused as a digital TV and thin-client components company. The programme will also allow Acorn to establish key strategic alliances focusing on profitability and growth in these markets.

In August, the Board's interim results statement reported that the Chief Executive had been empowered to move quickly, to create a focused and sustainable business for the benefit of all shareholders. The new management team also made clear its intention to take early steps to reduce the losses and cash consumption in the core businesses. This was to be achieved through a combination of disposals, increased focus on targeted revenue-earning activity and a related cost reduction programme.

As a result of completing its strategic review, Acorn is cancelling its Risc PC 2 project, and is realigning its infrastructure and support costs so that they are appropriate to the new company structure and size. Acorn will continue to supply existing desktop computer ranges, notably the Risc PC, but it will be postponing its annual show for the specialist market and is planning to transfer its logistics and systems activities to Xemplar, its 50% associate.

As part of the infrastructure realignment, Acorn will be reducing its non-engineering staff by around two-thirds, and will be reorganising its engineering staff onto direct revenue-earning design and consultancy work.

The overall effect of these changes will be to reduce Acorn's employee numbers from the current 175, to around 100. The Company currently estimates that the total cost of these measures will be about £1 million, inclusive of stock provisions.

Stan Boland, Chief Executive, commented: "Today's announcement marks a significant watershed in Acorn's history. Whilst we are sad to be announcing the redundancies, we are making these important changes to Acorn's market position and business shape to recognise that the future of this company lies as a leading player in the digital TV system components, and in partnership with other technology companies.

"Acorn's ability to create very fast and powerful silicon and software designs for some of the world's leading companies is increasingly being acknowledged. We are working hard to engage successfully in this market with a number of partners and potential partners."

For further information:

Stan Boland, Chief Executive
Acorn Group Plc
01223 725000
Rollo Head / Sarah Pascoe
Shandwick Consultants
0171 329 0096

About Acorn

Acorn is a technology design company, with a strong market focus on Digital interactive TV (DiTV) and Information Appliances (IA). Acorn offers world-class capabilities in complete product, silicon, operating systems and software component design. Acorn solutions provide high levels of functionality, the flexibility that only software can provide, and a reduced component count. Due to Acorn's independent status as a design company, their technologies can be applied in a range of applications across the consumer electronics industry.

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