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Continuum to Provide Menzies' Publishers and Retail Partners Enhanced
Quality Service

BRACKNELL, UK (02 April, 2001) - Magic Software Enterprises (Nasdaq: MGIC),
a leading provider of state-of-the-art application development technology
and business solutions, announced today that it has been selected by John
Menzies Distribution ("Menzies") to help develop Continuum, Menzies new
sophisticated Web-enabled distribution system. Menzies, which controls
approximately 25% of the United Kingdom's wholesale media distribution
market through a network of 30 distribution centres, distributes roughly 4
million newspapers every day, 9.5 million periodicals every week and 21
million magazines every month to more than 21,000 supermarkets, gas
stations, newsagents and convenience stores. Continuum will integrate Magic
with Oracle Data Structures running on Sun Solaris to provide enhanced
quality service to Menzies' publishers and retail partners.

Continuum, which is scheduled to be rolled out in the next several weeks,
takes maximum advantage of Magic's rapid application development and
integration capabilities to cover the full range of information technology,
from Internet-based customer inquiries through administrative systems such
as payroll to a new communications network designed to support Menzies'
complete technological infrastructure. Among the key features scheduled for
the initial release are:

- A "next generation" of allocation systems, written using Magic, that
provides both "bottom up" and "top down" business analyses of sales
potential for magazines and newspapers to help ensure publishers' business
objectives are married to retailer sales demands.
- Web-enabled customer service that allows Menzies' customers to obtain
details on invoices, credit notes, delivery notes, and magazine and
newspaper recall notes.
- Sales-based replenishment facilities, which combine the information held
in Menzies' branch computer systems with information received from customers' systems, to help ensure the availability of magazines and newspapers where
required. In addition, the system will alert Menzies to potential sell-out
situations so that the problem can be avoided altogether or appropriate
corrective action taken immediately.

"We chose Magic because of their e-business expertise and their clear
understanding of the issues unique to our business," said Frank Coyle, IT
director of Menzies. "In addition, Magic's seamless integration with the
Oracle Data Structures and the ability to quickly develop sophisticated
Web-enabled and other business solutions were key factors in selecting the
technology as a basis for Continuum."

Other features of Continuum include:

- An accountability project focused on returned magazines and newspapers
that will enable Menzies to identify the precise reasons for unsold
- A contractor self-billing system that enables Menzies to generate invoices
from individual contractors in a standard format for expedited processing.
- A Web-enabled document image processing system for the 22,000 invoices
produced by Menzies each week to expedite customer inquiries at the branch

In addition, Menzies plans to add facilities for customer relationship
management and Web-based retail education in the future.

"This is an enormously satisfying project because of the level of
sophistication being built into each delivery system and because it once
again demonstrates Magic's ability to integrate quickly and seamlessly with
other vendor's products," said Menachem Hasfari, chief executive officer of
Magic. "Menzies remains the leader in providing state-of-the-art technology
for the distribution of newspapers and magazines, and it is expected that
this system will lead the market as well in customer-facing innovation."

About John Menzies Distribution
John Menzies Distribution is a leading operator in the United Kingdom's news
industry, distributing newspapers, magazines and periodicals. Its strong
market position is based upon forward-thinking, technological innovation and
a constant emphasis on customer service. Using more than 1,200 vehicles
covering more than 50,000 miles a day and employing more than 4,000 staff,
Menzies handles more than 3,000 regular titles, including 4 million
newspapers each day, 9.5 million periodicals each week and 21 million
magazines a month.

About Magic Software Enterprises
Magic Software Enterprises, a member of the Formula Group (Nasdaq: FORTY),
develops, markets and supports software development and deployment
technology that enables enterprises to accelerate the process of building
and deploying applications that can be rapidly customised and integrated
with existing systems. Magic technology, applications and professional
services are available through a global network of subsidiaries,
distributors and Magic solutions partners in approximately 50 countries,
including the UK.

The Formula Group is an international information technology company
principally engaged, through its subsidiaries and affiliates, in providing
software consulting services, developing proprietary software products and
producing computer-based solutions.

Except for the historical information contained herein, the matters
discussed in this news release include forward-looking statements that may
involve a number of risks and uncertainties. Actual results may vary
significantly based upon a number of factors including, but not limited to,
risks in product and technology development, market acceptance of new
products and continuing product conditions, both here and abroad, release
and sales of new products by strategic resellers and customers, and other
risk factors detailed in the Company's most recent annual report and other
filings with the Securities and Exchange Commission.

Company Contact:
Andy Peart
Magic Software Enterprises UK Ltd
01344 667000

Media Contact:
Sara Claridge
Marylebone Media Relations
Tel: 0118 975 5188

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