BLONDE ACQUISITION

5th September 2006

Cello invests in digital agency

Cello Group plc (‘Cello’, AIM: CLL), the research and data led marketing

services group, has taken a controlling stake in Blonde Digital Ltd (‘Blonde’), a newly created digital agency, based in Edinburgh.

The new agency provide a one-stop shop for clients, offering digital consultancy and strategy, marketing & design, technical build, security and hosting. The initial focus will be to offer digital services to existing Leith and Navigator clients, as part of an integrated campaign approach. The Managing Director of Blonde is Pete Burns, formerly Digital Creative Director of Navy Blue Design Group.

Cello has acquired 84% of Blonde for a nominal sum; with key management holding the remaining 16%. The management equity is subject to a put option on Cello, dependent on future performance, and is subject to a maximum consideration of £1.5 million in a mixture of cash and new ordinary shares. The percentage of any consideration payable in Cello new ordinary shares is at Cello’s sole discretion.

Cello has also agreed to provide initial working capital to Blonde in the form of a loan facility totalling £150,000.

Separately today Cello has published its interim results for the six months to 30 June 2006 which show that the Group increased profits by 98% to £2.62 million.

Mark Scott, Cello Chief Executive, said: “We are committed to building on our already strong on-line credentials. Pete Burns and team will be a real asset to the Group as we accelerate down the digital highway.”