Acquisition of Canadian Operation, Closure of Knowledge Engineering Division

Acquisition

Stilo today announces that it has acquired certain assets and contracts comprising the content engineering division of Xia Systems Corporation, Ottawa for a total cash consideration of approximately £108,000, financed from the Company's existing resources. Xia Systems Corporation provides project consultancy and implementation services to major organisations, with leading expertise in XML-based publishing solutions.

As a result of the acquisition Stilo will take on three new full time employees and an expanded base of potential sub-contractors. Stilo also acquires certain existing customer contracts and a prospective business pipeline. This acquisition provides Stilo with additional project services expertise required to introduce StiloCF2 into the North American market.

Closure of Knowledge Engineering Division

Stilo also announces the closure of its Knowledge Engineering business, based in Bristol, as at 30 November 2004. This is in line with the Board's stated intention, announced on 8 September 2004, to take such steps as may be necessary to ensure that losses for the Division do not extend beyond 2004. As a result, Stilo has made 6 staff redundant and has moved to new, smaller premises in Swindon, reducing ongoing UK operating costs.

Change of Registered Office

Stilo announces that since 29 November 2004 its UK registered address is:

Stilo International Plc,
2 Bloomsbury St,
London WC1B 3ST

Commenting on these developments, Les Burnham, Chief Executive, stated: "These transactions reflect the continuing implementation of the Group's strategy to focus on growing the content engineering business".

For further information please contact:

Les Burnham, Chief Executive, Stilo International plc 01793 441 444

Russell Cook, Charles Stanley Corporate Finance 020 7739 8200