Trading Statement

RNS Number:3512K
Cartucho Group Ltd
12 October 2006


Press Release                                  12 October 2006



                             Cartucho Group Limited


                         ("Cartucho" or "the Company")


                                 Trading Update


                              Directorate Changes



On 31 August 2006, Cartucho Group, a developer and manufacturer of ink refill
kiosks, announced that it had installed 379 kiosks under its contract with its
major customer in the US and that the Company had received notification from its
major customer to suspend further installations, resumption of the roll out
being contingent upon service and support performance meeting with their
approval.


The announcement on 31 August 2006 referred to the Company's proactive steps
being undertaken in conjunction with its outsourced service provider to upgrade
the provision of service and support levels, with the goal that enhanced levels
of service and support would both better serve its major customer and enable the
kiosk roll out to continue.  The Company had hoped that these actions would
allow for the recommencement of the kiosk roll out in October 2006.  Despite a
comprehensive technical audit and improvements in the levels of support, the
Company's major customer has not given the go ahead to recommence to roll out
and will not now do so for the remainder of 2006. This position is now due to be
further reviewed in January 2007.


The Company continues to see improvements in average refill rates in both mature
markets, those installed for more than 10 weeks, and overall averages. In the 6
weeks to 7 October 2006, refills have grown by 36%.  As the Company's major
customer enters its busiest time the year the Company expects to see these
positive trends continuing.


As a result of the Company's major customer's decision not to recommence the
roll-out of the kiosk's, the Company will not meet market estimates for revenue
in the current financial year, and as a result of the loss in income from the
171 kiosks and additional costs incurred during and subsequent to the technical
audit and costs incurred due to the cessation of manufacturing will materially
exceed market estimates for the loss before tax in 2006.


The delay is likely to also have an effect on the 2007 results which will be
significantly impacted by the timing of the installation of the remaining 171
kiosks.


Despite the reduction in income the Company continues to trade within its
combined cash reserves and bank facility limits.  There will be further cost
reductions in indirect cost lines before the end of 2006 and based on the
current levels of income the Company will become cash positive in December 2006.



Directorate Changes


The Board of the Company announces today that, through mutual agreement,
Chairman Ian Diery, Chief Executive, Michael Willcocks and Non-Executive
Director, Joseph Norberg will leave the Company with immediate effect.  Roger
Pellew will assume the role of Chief Executive on an interim basis with a view
to the making of a permanent appointment in the near future.


In the medium term, the Board will focus upon building a business within its
financial capability, focusing upon continuing to develop its business with its
major customer, particularly around the core kiosk estate and developing new
customer relationships.  The Board will further update shareholders as to its
more detailed strategy in the near future.




                                    - Ends -

For further information:
Cartucho Group Limited
Roger Pellew, Chief Executive                         Tel:  [phone]

Media enquiries:
Abchurch
Chris Lane / Hugh Barker                               Tel: [phone]
[e-mail]                            www.abchurch-group.com




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