ATCG.L

AT Communications Group plc

('ATC' or 'the Group')

Delayed Project

The Board of ATC has had discussions with a major customer and been informed that a substantial proportion of a project, scheduled for completion in this financial year, will no longer be on schedule. This project generated a turnover of approximately £6million which was accrued last year based on work done up to 31 December 2008 and would have provided significant cash for debt reduction during the course of the current financial year. The company is currently in discussions over the exact timing of the delay to this project and a further announcement will be made in due course.

The Board of ATC has informed its Bankers of this matter in light of the re-negotiation of ATC's facilities currently underway following the disposal of Rocom.

ATC has begun a cost reduction programme, which will substantially reduce its ongoing staffing levels. Although turnover in the four months to 30 April is behind expectations, the Directors are encouraged by the levels of new business wins being achieved by the new management team. This, together with the effects of the cost reduction programme, mean that the Company is better placed to  mitigate the effect of the delay to the project referred to above.  

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