Final Results

PENNA CONSULTING PLC

("Penna" or "the Group")

Preliminary Results for the year ended 31 March 2012

12 June 2012

Penna Consulting Plc (PNA: AIM), the international human resources consulting group, today announces its preliminary unaudited results for the year ended 31 March 2012.

FINANCIAL HIGHLIGHTS

·; Revenue £68.5m (2011: £80.2m)

·; Net revenues £39.1m (2011: £40.4m)

·; Pre tax profits £1.8m (2011: £0.3m before £4.5m of non-recurring exceptional items)

·; Cash at year end £2.8m (31 March 2011: £3.4m)

·; Final dividend 1p (2011: 1p); total dividend for the year 2p (2011: 4p)

·; Diluted earnings per share 6.0p (2011: 1.0p before non-recurring exceptional items)

OPERATIONAL HIGHLIGHTS

·; Penna retained its leading position in the UK outplacement market with outplacement revenues showing moderate growth

·; UK recruitment market remains subdued but Penna continues to win new clients

·; Fixed cost base reduced by £3.9m and operating margins have improved

Commenting on the results and outlook, Stephen Rowlinson, Chairman, said:

"The UK economy faces an unprecedented period of uncertainty. It is possible that the Euro group will avoid implosion and that there will be a coordinated international response to the need for reflation. It is equally possible that politicians will be unable to suspend the laws of economics and that we will see a further and deeper period of recession.

Against this background, Penna's strategy is to have a highly flexible business model and to be able to respond quickly and adapt to changes in market conditions. This is not merely an aspiration. We have a proven track record and are proud of our ability to achieve a six-fold increase in profits while suffering a 15% drop in Gross Revenue.

Our countercyclical Outplacement services are an important protection against the impact of recession and our Recruitment services are poised to expand rapidly when recovery begins. Our focus remains on driving organic growth and maximising the potential of the strength of our relationships with our clients by providing them with service across our two divisions. However, we will continue to consider carefully selective acquisition opportunities if appropriate. We are determined to emerge from this period of challenge as a leading international HR service organisation."

ENDS

For further information please contact:

Stephen Rowlinson, Chairman 0771 00 23699

Gary Browning, Chief Executive 020 7332 7754

David Firth, Finance Director 020 7332 7754

Charles Stanley Securities

Marc Milmo/Darren Vickers 020 7149 6000

Penna Consulting Plc

Chairman's Review

The year ended 31 March 2012 was another challenging year with weak demand in most sectors of the UK market for HR services. Growth in revenue from our Outplacement service within HR Consulting was offset by a reduction in revenue from Recruitment Solutions and total net revenues were 3% lower than the previous year at £39.1m (2011: £40.4m). During 2010/11 we had markedly reduced our fixed and other operating costs and as a result, the fall in net revenues was more than offset by the reduction in costs resulting in an increase in profits in the year under review.

Operating profit was £1.8m (2011: £0.3m before non-recurring exceptional items). There were no exceptional items during the year (2011: £4.5m) and profit after tax was £1.5m compared to a loss of £3.1m in 2011.

Operating expenses in the year fell by 16% from £79.8m in 2011 to £66.7m with fixed costs down by £3.9m (12%) from £32.6m to £28.7m as a result of the cost reductions implemented last year.

Dividends

An interim dividend of 1p per share (2011: 3p) was paid on 16 March 2012. The Board is recommending a final dividend of 1p per share making a total dividend for the year of 2p (2011: 4p). The proposed final dividend will be payable on 8 November 2012 to shareholders on the register on 12 October 2012.

Operational and Financial Review

The company is organised into two service groups, namely HR Consulting and Recruitment Solutions, each led by a Managing Director reporting directly to the Chief Executive.

*Before non-recurring exceptional items of £4.5m

HR Consulting ("HRC")includes our market leading outplacement business, coaching, assessment, management development , performance and change management teams` .

During the year the Division served 1,200 clients including the majority of the UK's leading commercial and industrial companies. Of particular importance were the 64 Financial Service clients who represented 30% of Outplacement Revenue. Revenue from the Public Sector grew 7% and accounted for 19% of HRC income.

Thus far, in working to achieve Government spending targets, the Public Sector has largely relied on natural attrition, a recruitment freeze, and voluntary redundancies and therefore demand for Outplacement - which essentially helps people made redundant and who wish to find a new career as soon as possible - has grown at a slower rate than could have been anticipated. However, the next stage of deficit reduction is likely to require some public sector organisations to take more proactive action to downsize and our Outplacement services offering is well positioned to benefit from this.

Penna is the leading provider of outplacement services to public organisations and we have won 173 new contracts since the 2010 Comprehensive Spending Review. We advise on how best to implement re-organisations, we assess employees objectively in order to select people for redundancy and we provide support to ensure the individuals affected have the best possible opportunity to return to the job market as quickly as possible.

If an organisation uses our services the completion of the redundancy programme is achieved earlier and savings therefore accrue earlier. Most importantly the people given our professional career support, redeploy into the job market on average 40% faster than those who are not supported.

Other services of this division include Board Coaching and Assessment and these units have performed very well in challenging markets. Coaching revenues were maintained at the same level as in the prior year and Assessment revenues grew by an impressive 30%.

Recruitment Solutions combines our service capabilities in recruitment advertising and communications, managed recruitment and assessment, executive search and executive interim. This broad range of recruitment activities enables us to offer clients in both the commercial and public sector innovative solutions to their recruitment needs. The Division derives half of its revenue from each of the public and private sectors. Demand from both sectors was depressed with revenues from the Public sector down 24% and those from the Private sector down by 22% compared to last year. Our client list across both sectors remains strong with ongoing contracts and good relationships over a broad range of organisations. A large proportion of income comes under long term contracts and we remain sure that we are retaining our key clients and indeed continuing to win new ones. However, given current world market conditions it would not be realistic to expect a rapid recovery in expenditure per client.

We, therefore, believe that demand for our Recruitment services will remain subdued throughout 2012 and we have reduced operating costs significantly, with employee costs down £2.6m and overheads £0.6m lower than last year, whilst ensuring that we remain well positioned to expand as and when client confidence and recruitment activity does increase.

We have made particularly good progress in building our commercial sector client base and have added new clients and new services, such as the award winning technology enabled graduate assessment programme for KPMG. Clients continue to look for innovation and highly cost effective means to recruit new talent. We are working with major clients such as BT to run their recruitment programmes through social media, and we are a leader in direct sourcing and avatar based technologies.

Recruitment advertising and communication continues to work through enormous changes in technology and we are determined to retain our position as a leader of the industry.

Balance sheet

The Group's net assets at 31 March 2012 were £19.4m (2011: £18.3m) an increase of £1.1m reflecting the net profit for the year of £1.6m less the payment of £0.5m in dividends.

The Group had a cash balance of £2.8m at 31 March 2012 (2011: £3.4m) and has outstanding finance leases of £0.8m (2011: £1.3m). Net Cash was therefore little changed at £2.0m (2011: £2.1m). The Group has working capital facilities of £3.0m but yet again these were un-utilised during the year.

Cashflow

Cash generated by operations amounted to £0.4m after the cash cost of £1.0m following the restructuring of the Recruitment Solutions business at the end of the previous year. A tax refund of £0.7m was received in September 2011 relating to losses carried back against tax paid in prior years. Capital expenditure amounted to £0.6m and a further £0.6m was repaid on finance leases taken out in 2010/11 to finance the fit-out of our then new offices in Fleet Place, London. Dividends paid totalled £0.5m for the year.

Taxation

Taxation has been provided at 26% with the current year charge benefiting from utilisation of losses brought forward from the prior year. The deferred tax asset includes a provision for surplus trading losses of £0.7m available to carry forward.

 Outlook

The UK economy faces an unprecedented period of uncertainty. It is possible that the Euro group will avoid implosion and that there will be a coordinated international response to the need for reflation. It is equally possible that politicians will be unable to suspend the laws of economics and that we will see a further and deeper period of recession. Against this background, Penna's strategy is to have a highly flexible business model and to be able to respond quickly and adapt to changes in market conditions. This is not merely an aspiration. We have a proven track record and are proud of our ability to achieve a six-fold increase in profits while suffering a 15% drop in Gross Revenue.

Our HR consulting business continues to benefit from the restructuring and downsizing across the commercial and public sectors in response to the economic slowdown. However, as noted above, the opportunity from the public sector has not to date been as large as originally anticipated although we remain hopeful that the Group will benefit from the next stage of the drive to reduce the public sector deficit. Our Recruitment business has started the new financial year in line with our expectations and the cost base is now aligned to current market conditions.

Our countercyclical Outplacement services are an important protection against the impact of recession and our Recruitment services are poised to expand rapidly when recovery begins. Our focus remains on driving organic growth and maximising the potential of the strength of our relationships with our clients by providing them with services across our two divisions. However, we will continue to consider carefully selective acquisition opportunities if appropriate. We are determined to emerge from this period of challenge as a leading international HR service organisation.

Stephen Rowlinson

Chairman

12 June 2012

Consolidated statement of comprehensive income

for the year ended 31 March 2012 (unaudited)

Penna Consulting Plc

Consolidated statement of changes in equity

at 31 March 2012 (unaudited)

Penna Consulting Plc

Consolidated statement of financial position

at 31 March 2012 (unaudited)

Penna Consulting Plc

Consolidated statement of cash flow

for the year ended 31 March 2012 (unaudited)

Penna Consulting Plc

Notes to the preliminary announcement

for the year ended 31 March 2012 (unaudited)