Disposal

11 December 2015

WORK GROUP PLC

(the "Company" or the "Group")

Proposed disposal of the Operating Businesses and the Subsidiaries

Adoption of a new Investing Policy

Notice of General Meeting

The Company today announces that it has entered into a conditional agreement for the sale of the UK Businesses and the Subsidiaries to Capita for a cash price of £2,000,000 (subject to working capital adjustments). Further details of the terms of the Disposal are set out below and in the Circular sent to shareholders today, which is also available on the Company's website at http://www.workcomms.com/plc/investor/reports/.

Under Rule 15 of the AIM Rules, the Disposal represents a fundamental change to the business of the Company and the Disposal is accordingly conditional upon the approval of the Shareholders.

Furthermore the Disposal will result in the Company becoming an Investing Company. As a consequence, Rule 15 of the AIM Rules further requires the Company to obtain the approval of the Shareholders for its proposed Investing Policy following the completion of the Disposal. Further details of the proposed Investing Policy are set out below.

A General Meeting of the Company has been convened to seek the approval of Shareholders for the Disposal and the adoption of the Investing Policy. The General Meeting will be held at 11:30 a.m. on 29 December 2015. Notice of the GM has been posted to Shareholders with the Circular.

Background to and reasons for the Disposals

As indicated in the trading statement on 16 June 2015, during the period since its last interim statement on 30 September 2014, Work Group has been operating in challenging times, especially in the UK. Last year, despite an encouraging number of client wins in all territories, the Group experienced a significant contraction in its UK business due to the cancellation and deferral of a number of client assignments. The losses made in the UK business in the autumn period of 2014, coupled with a lengthening in customers' working capital cycles, placed additional operational strain on the Company's working capital resources. Significant efforts were made to reduce fixed overheads and other liabilities, including certain staff redundancies, reducing Directors' remuneration and a move of the head office. The position has not materially improved since the date of the trading statement.

In the announcement on 16 June 2015, the Company also reported that, against that background, the Board had decided to undertake a strategic review of its operations in the course of which it would consider all opportunities for maximising value for shareholders and that the Board had appointed SI Partners LLP to work with it in its review.

In those circumstances the Board decided not to publish its results for the year ended 31 December 2014 until the conclusion of the strategic review and accordingly trading in its Ordinary Shares on AIM was suspended.

On the 7 August 2015, the Company announced that the Board had resolved that that the appropriate action was to seek a buyer for the Operating Businesses and that a formal sale process, managed by SI Partners LLP, was being undertaken.

In the course of the strategic review and sale process, a number of changes taking place in the market for HR and Talent Management services were identified and it was concluded that within its sector the Company's capability in employee engagement activities and its establishment of profitable international businesses was a significant differentiator.

At the same time, the broader market in which the Company operates has experienced a period of consolidation which has seen in the course of 2015: Hay Group acquired by Korn Ferry, Saville Consulting acquired by Towers Watson HR, which in turn was acquired by KPMG, PA Consulting acquired by Carlyle, and Capita acquiring ThirtyThree.

As part of the sale process the Company engaged with a range of PR groups, outsourcing companies and management consultancies as potential purchasers. The outcome of the process is the proposed Disposal to Capita the details of which are set out in this announcement.

Financial Information and current trading

The Company's annual results for the year ended 31 December 2014 were announced to the market earlier today, but dealings in Ordinary Shares remain suspended pending the publication of its interim results for the six months to 30 June 2015 which are expected to be published on or before 16 December 2015. A copy of the audited report and accounts for the year ended 31 December 2014 will be posted to Shareholders shortly.

The trading environment for the Company in this period has remained challenging in the UK, but strong performances overseas have to some extent mitigated the UK position. Nevertheless, this, coupled with lengthening customer payment cycles, has placed a strain on the Company's working capital resources, despite the various cost saving measures implemented by management. The Company retains funds for working capital, but if the Disposal is not completed, the Company would need to raise additional capital.

The Company intends to publish its interim results for the six months to 30 June 2015 on or before 16 December 2015, at which time the suspension of trading of its shares on AIM it is expected to end.

For the year ended 31 December 2014, the Operating Businesses contributed revenue of £7.6 million, a loss in EBITDA of £635,000 and a loss before tax of £905,000. The total value of the Net Liabilities being disposed of as at 31 December 2014 was £1.71 million.

For the six months ended 30 June 2015, as extracted from the unaudited management accounts (excluding PLC costs) of the Company show the Operating Businesses contributed revenue of £3.45 million, a loss in EBITDA of £283,455 and a loss before tax of £286,260. The total value of the Net Liabilities being disposed of as at 30 June 2015 was £1.15 million.

For the ten months ended 31 October 2015, as extracted from the unaudited management accounts (excluding PLC costs) of the Company, the Operating Businesses contributed revenue of £6.02 million, EBITDA of £36,298 and a profit before tax of £31,213. The total value of the Net Liabilities being disposed of as at 31 October 2015 was £471,000.

Summary of the proposed Disposal

The Disposal to Capita of the Operating Businesses, which are carried out in the UK by the Company and Work Group Resources and in Hong Kong and the United States by the Subsidiaries, will be by an asset sale in respect of the UK Businesses and the sale of the shares of the Subsidiaries. The shares in the Subsidiaries will be acquired by Capita International Limited while the assets relating to the UK Businesses will be acquired by Capita Resourcing Limited.

The principal terms of the Sale and Purchase Agreement:

· £2,000,000 cash consideration of which £1,500,000 is to be paid on Completion and the balance of £500,000 upon finalisation of the completion accounts.

· The agreement is conditional only on the passing Resolution 1 at the GM.

· A working capital position has been agreed and will be subject to completion accounts and the final payment adjusted upward or downward adjustment accordingly.

· Warranties and indemnities have been entered into whose expiry will be six months from Completion.

· No distribution of proceeds may take place until expiry of the six month warranty and indemnity period.

· The Purchasers will take full responsibility for all staff within the overseas companies while the employment all UK employees engaged in the UK Businesses (which does not include those employed by the Company itself) will be transferred (under TUPE) to Capita Resourcing Limited.

Following Completion, the Company will retain a number of liabilities (principally one UK property and various creditors) which will be discharged as soon as practically possible.

Board Change

If the Disposal is approved, Rose Colledge has agreed that she will then resign from the boards of the Company and Work Group Resources.

Proposed New Investing Policy

If the Disposal is approved, the Company will have disposed of all of its trading businesses. Under Rule 15 of the AIM Rules the Company will be reclassified as an Investing Company. Under the AIM Rules if they wish to continue to be admitted to dealings on AIM, Investing Companies are required to adopt an Investing Policy that must be approved by Shareholders.

It is, in any event, necessary that the Company continue to function in order that its residual liabilities can be discharged as well as to comply with the terms of the Sale and Purchase Agreement which prohibits any return of sale proceeds before the warranties and indemnities have expired. Consequently it is in the interests of Shareholders that the Company adopts this policy and retains its listing on AIM.

The Company's proposed new Investing Policy is to invest in and/or acquire within the support and business services sector where the Board believes there are opportunities for growth which, if achieved, will be earnings enhancing for Shareholders.

Where appropriate, the Board may seek to invest in businesses where it may influence the business at a board level, add its expertise to the management of the business, and utilise its significant industry relationships and access to finance. The ability to work alongside a strong management team to maximise returns through revenue growth will be something the Board will focus upon initially.

The Company's interests in a proposed investment and/or acquisition may range from a minority position to full ownership and may comprise one investment or multiple investments. The proposed investments may be in either quoted or unquoted companies; and may be in companies, partnerships, debt or other loan structures, joint ventures or direct or indirect interests in assets or projects. The Board may focus on investments where intrinsic value can be achieved from the restructuring of investments or merger of complementary businesses.

The Board will place no minimum or maximum limit on the length of time that any investment may be held. The Company may be both an active and a passive investor depending on the nature of the individual investment.

There is no limit on the number of projects into which the Company may invest, and the Company's financial resources may be invested in a number of propositions or in just one investment, which may be deemed to be a reverse takeover under the AIM Rules. The Directors intend to mitigate risk by appropriate due diligence and transaction analysis. Any transaction constituting a reverse takeover under the AIM Rules will also require Shareholder approval. The Board considers that if investments are made, and new promising investment opportunities arise, further funding of the Company may also be required.

Investments may be made in all types of assets and there will be no investment restrictions on the type of investment that the Company might make or the type of opportunity that may be considered. The Company may consider possible opportunities anywhere in the world.

The Board will conduct initial due diligence appraisals of potential business or projects and, where they believe further investigation is warranted, intend to appoint appropriately qualified persons to assist. The Board believes it has a broad range of contacts through which they are aware of various opportunities which may prove suitable, although at this point only preliminary due diligence has been undertaken. The Board believes its expertise will enable it to determine quickly which opportunities could be viable and so progress quickly to formal due diligence. The Company will not have a separate investment manager. The Company proposes to carry out a comprehensive and thorough project review process in which all material aspects of a potential project or business will be subject to rigorous due diligence, as appropriate.

As an Investing Company, the Company will be required to make an acquisition or acquisitions which constitutes a reverse takeover under the AIM Rules or otherwise implement its proposed Investing Policy on or before the date falling 12 months from completion of the Disposal failing which, the Ordinary Shares would then be suspended from trading on AIM. In the event that its Ordinary Shares are so suspended and the Company fails to make an acquisition or acquisitions which constitute a reverse takeover under the AIM Rules or otherwise implement its proposed Investing Policy, the admission to trading on AIM would be cancelled six months from the date of suspension.

If the Company does not fully implement its proposed Investing Policy on or before the date falling 12 months from completion of the Disposal, the Board intends to take such steps as are appropriate to secure the most effective return of shareholders' funds to shareholders which the Board considers is likely to be way of a members' voluntary liquidation.

Action to be taken by Shareholders

The Notice of General Meeting, to be held at 11:30 a.m. on 29 December 2015 at the offices of Laytons Solicitors LLP, 2 More London Riverside, London SE1 2AP, which was posted to shareholders today and is available to view on the Company's website, http://www.workcomms.com/plc/investor/reports/, sets out the Resolutions.

A form of proxy for use at the General Meeting has been sent to Shareholders. Whether or not Shareholders propose to attend the General Meeting, they are requested to complete the form in accordance with the instructions printed on it and return it to Computershare Investor Services plc, The Pavilions, Bridgewater Road, Bristol BS99 6ZY, as soon as possible, but in any event, to arrive not later than 11:30 a.m. on 23 December 2015.

The return of the form of proxy will not prevent Shareholders from attending the General Meeting and voting in person if they so wish.

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