Dear fellow shareholders,
Please find enclosed a circular that has been sent to all shareholders which contains details of the plan to raise additional funds for Electric Word by issuing new shares which we announced on 17 August 2012, together with our interim results for the half year to 31st May 2012.
The circular contains important information which shareholders should read and any investment decisions should be made on the basis of that document alone. However I thought it would be useful to summarise the key points.
Electric Word has faced some difficult conditions in our public sector markets over the last couple of years which reduced our profits in the Education division in 2011 in particular. We decided that despite the difficult conditions we would take the opportunity while the market was weak to redevelop our portfolio of professional development products with the aim of putting all of our businesses in the best possible position to benefit when more stable economic conditions prevail.
We have therefore been engaged in a programme of product development and investment for much of the last year. We have already seen the benefits of that with the development of a new online publishing platform which launched in January 2012. Our Interim results also show the Education market stabilising with that division returning to profit in the first half of this year.
We now plan to accelerate that programme of investment, including developing further digital products and strengthening the central functions that enable us to drive value and growth in the Group's different businesses. We are making these investments in order to grow shareholder value by maximising the potential of each division.
In order to make these investments we are raising additional equity finance, which will be used to directly fund the next phase of investment, to improve the working capital available to the business and to further reduce our bank borrowings.
The equity fundraising is in two parts. First, there is a placing of shares and I'm pleased to report that all of the Company's three largest shareholders, as well as myself as Chief Executive, are participating in the Placing. Secondly, there is an Open Offer of shares to all shareholders, save for some certain overseas investors who we are unfortunately unable to include. This gives shareholders the opportunity to increase their shareholding at the same price as investors participating in the Placing. Your allocation under the open offer is one new share for every nine shares you already hold, but if you wish to apply for additional shares there is the facility to do that also, subject to certain overall limits.

www.

ElectricW ordplc .com 33-41 Dallington E C1V Street, London EC 1V 0BB T: 020 7954 3443 F: 0845 450 6405

Incorporated in England and W ales. Registration no. 3934419, Registered Office: 33 -41 Dallington Street, London 0BB


The Directors believe that the new shares, including those available under the open offer, should be eligible (subject to the circumstances of investors) for tax reliefs under the Enterprise Investment Scheme ("EIS") and for investment by VCTs. Full details are set out in part 7 of Part 1 of the enclosed circular. Naturally, investors should seek their own tax advice if they plan to make use of this scheme.
Approval from shareholders will be sought for the equity fundraising at a general meeting which will take place on 6 September 2012.
The Directors believe that the equity fundraising and the passing of the shareholder resolutions at a general meeting are in the best interests of the Company and shareholders, taken as a whole. The Directors unanimously recommend the shareholders to vote in favour of the shareholder resolutions and to complete and return the Form of Proxy enclosed with this letter.
Thank you very much for reading this letter. Yours sincerely,
Julian Turner

www.

ElectricW ordplc .com 33-41 Dallington E C1V Street, London EC 1V 0BB T: 020 7954 3443 F: 0845 450 6405

Incorporated in England and W ales. Registration no. 3934419, Registered Office: 33 -41 Dallington Street, London 0BB

distributed by