Final Results

PENNA CONSULTING PLC

("Penna" or "the Group")

Preliminary Unaudited Results for the year ended 31 March 2014

10 June 2014

Penna Consulting Plc (PNA: AIM), the international human resources consulting group, today announces its preliminary unaudited results for the year ended 31 March 2014 which exceeded market expectations.

FINANCIAL HIGHLIGHTS (continuing operations)

· Revenue £69.0m (2013: £65.5m)

· Net revenues £36.1m (2013: £37.2m)

· Adjusted pre tax profits* £2.7m (2013: £2.5m)

· Net cash at year end £0.9m (31 March 2013: £2.6m)

· Final dividend 1.5p (2013: 1p); total dividend for the year 3p (2013: 2p)

· Diluted earnings per share* 8.2p (2013: 8.9p) from continuing operations

· Pre tax profits after non-recurring exceptional items £0.1m (2013: £2.5m)

· Post tax loss after discontinued operations and non-recurring exceptional items £1.4m (2013: Profit £1.0m)

*before non-recurring exceptional items

OPERATIONAL HIGHLIGHTS

· Recruitment Solutions operating profits tripled to £1.1m (2013: £0.3m)

· A full Career Services pipeline at end year from Banking and Retail

· Savile Group acquired for £1.1m consideration and incurred additional £2.6m in reorganisation costs

· Savile contributed £0.9m of turnover and £0.1m in profit for the three months to 31 March 2014

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

" The year to 31 March 2014 saw growth of 6% in Pre Tax Profits for continuing businesses* to £2.7m (2013: £2.5m). This modest increase does not fully reflect a number of important and positive trends established in the last twelve months. During the year we gained some major new clients and with them and existing clients planned a series of projects to be implemented during 2014/5.

An important event in the year was our acquisition of Savile Group which has already made a positive contribution to profits.

The early weeks of the new company year have seen encouraging trends with all businesses showing advances on the same period of the previous year. We are planning for 2014/15 to be a year of growth in our existing business streams while we will continue to look for further acquisition opportunities."

ENDS

For further information please contact:

Stephen Rowlinson, Chairman 0771 00 23699

Gary Browning, Chief Executive 020 7332 7753

David Firth, Finance Director 020 7332 7753

Charles Stanley Securities

Marc Milmo 020 7149 6000

Karri Vuori 020 7149 6000

Penna Consulting Plc

Chairman's Review

The year to 31 March 2014 saw growth of 6% in Pre Tax Profits for continuing businesses (before non-recurring exceptional items) to £2.7m (2013: £2.5m). This modest increase does not fully reflect a number of important and positive trends established in the last twelve months.

The small gain in overall profit resulted from an extremely impressive gain of 329% in profits from Recruitment Solutions which grew operating profits from £0.3m to £1.1m being somewhat offset by a drop in the contribution from HR Consulting from £3.1m to £2.5m. This was largely the result of some contract delays in the 4th Quarter. However, this appears to be a short term situation and notably the pipeline of new business at the end of the year was at a very satisfactory level. During the year we gained major new clients and with them and existing clients planned a series of projects to be implemented during 2014/15.

Our Recruitment business continued to grow strongly and accounted in the year for over 41% of the Group's Net Revenue. It was pleasing that there was growth and positive contributions from all Recruitment service units. Of particular note was growth of Net Revenue from Executive Interim of 22% to £2.7m and of Executive Search of 25% to £2.4m.

An important event in the year was our acquisition of Savile Group. Consideration for the shares was £1.1m in cash and in addition we incurred £2.6m in reorganisation costs. For these sums we acquired incremental net revenue of around £4m and an important additional Talent Management business as well as further resources in Career Transition. In the first 3 months post acquisition the old Savile units produced operating profits of £0.1m on turnover of £0.9m. We have provided for all former Savile property costs and completed the integration of the teams.

As previously announced our business in Northern Ireland became loss making following the completion of a major long term contract and it had to be closed. The former management will, however, continue independently under a licence arrangement with Penna and we wish the Belfast team well and will give them every support in the future.

Earnings per share from continuing businesses before non-recurring exceptional items was 8.2p (2013: 8.9p) and the Board is recommending a final dividend of 1.5 pence per share (2013: 1.0 pence) to make a total dividend of 3.0 pence (2013: 2.0 pence) for the year. If approved at the Annual General Meeting the final dividend will be paid on 20 November 2014 to shareholders on the register on 24 October 2014.

Board changes

On 14 January 2014 Bev White the Managing Director of our HR Consulting division and Julie Towers the Managing Director of Recruitment Solutions joined the Main Board which now has four executive and three non-executive members. At the same time we made a number of appointments to the Board of Penna Plc which is the operating subsidiary of Penna Consulting Plc. The Main Board and Operating Board appointments recognise the strength of our management teams and ready the company to drive growth.

Operational Review

Penna offers a broad range of HR services to clients, spanning the employment lifecycle from recruitment activities, through assessment and development services to career transition and career development. The ability to combine transactional HR services into talent solutions for our clients enables us to add value and differentiates us from others in the sector.

In the year ended 31 March 2014 we were organised into two service groups, namely Recruitment Solutions and HR Consulting, each led by a managing director reporting directly to the Chief Executive.

Continuing operations includes post acquisition trading for 3 months to 31 March 2014 from the Savile Group.

2013 has been restated to exclude discontinued operations.

HR Consulting included our market leading outplacement consultancy as well as a portfolio of talent assessment and development services, through which we provide clients with solutions supporting them to identify and develop their people. These included coaching, management and leadership development, and assessment.

Net revenues in the year in HR Consulting fell by 8% to £21.2 million (£23.1 million) primarily as a result of lower levels of restructuring within the financial services sector. The impact of this on outplacement revenues was partly mitigated by major contract wins in other sectors going through restructuring such as retail and pharmaceutical which are contributing to the healthy pipeline going into the new financial year.

The HR Consulting Service group included the loss making operations in Northern Ireland which was closed in the year. Operating profits in HR Consulting from continuing operations were £2.5m (2013: £3.1m) producing an operating margin of 11.7% (2013: 13.4%).

Good progress was made in the year with our international career services network - the Career Star Group, which we founded in April 2012. There are now 28 partners, across 70 countries. Referral income across the group in the year was £1.5m and Penna received over £130k income from the network this year. During the year Penna signed a licence agreement with Husys, an HR services group in India. The agreement brings Husys into the Career Star Group and will create an additional source of revenue for Penna going forward.

As the UK economy returns to growth the focus of HR directors has turned to recruitment, development and also retention of key talent. The provision of Career Development as a retention strategy has risen up the HR agenda and Penna developed a new service during the year called "BeMore", a blended online and face-to-face service to help organisations provide their employees with career development support. This new service was launched after the year end and we will see the benefits of additional revenues in 2014.

In December 2013 Penna acquired the Savile Group, a substantial competitor in Outplacement and Talent Management. We are pleased to report that the integration of the Savile business into Penna was completed by 31 March 2014. We have vacated all of the Savile premises and have merged the teams into Penna offices, successfully removing any duplication or overlap. As a consequence of the speed of this transition we are able to report a small contribution of £102,000 on revenues of £948,000 from the Savile business over the three months from January 2014. We had not anticipated being able to show a contribution from this acquisition in the current year.

Recruitment Solutionscombines our expertise in resourcing (attraction communications, advertising, managed recruitment and assessment), executive search and executive interim. By combining these services we offer clients the right solution to their recruitment needs.

Revenues continued to grow during the year and ended 13% up on the prior year at £47.2m (2013: £41.7m). Net revenues were also up 6% at £14.9m (2013: 14.0m). This increase translated into a significant improvement in profitability to £1.1m (2013: £0.3m). The trend of increasing recruitment revenues and profitability throughout the year has continued since the year end.

We have clients across all government and commercial sectors and it remains a strategic intention to balance the mix of recruitment work across both the public and commercial sectors.

Our strength in public sector recruitment was reinforced during the year through the successful appointment of the company onto five recruitment lots within the Civil Service Resourcing framework, a major government procurement framework for resourcing contracts. This strength was balanced with significant new recruitment contracts with Aldi, BMW and KPMG.

An improving recruitment market enabled and the investments made in consultants in the previous year meant that Executive Interim fees increased by 22% and in Executive Search, retained work sourcing executives increased by 25%.

Balance sheet

The Group's net assets at 31 March 2014 were £17.9m (2013: £20.0m) including cash balances of £0.9m (2013: £2.6m). The Group has no debt and has working capital facilities of £5.5m.

Cashflow

Cash generated by operations amounted to £1.9m (2012: £1.8m). Capital expenditure amounted to £0.4m (2013: £0.4m) and a further £0.2m (2013: £0.6m) was repaid on finance leases. Dividends paid in the year amounted to £0.6m (2013: £0.5m). Cash paid for the shares of Savile Group amounted £1.1m.

Outlook

The early weeks of the new company year have seen encouraging trends with all businesses showing advances on the same period of the previous year. We are planning for 2014/15 to be a year of growth in our existing business streams while we will continue to look for further acquisition opportunities.

Stephen Rowlinson

Chairman

10 June 2014

Consolidated statement of comprehensive income

for the year ended 31 March 2014 (unaudited)

Penna Consulting Plc

Consolidated statement of changes in equity

at 31 March 2014 (unaudited)

Penna Consulting Plc

Penna Consulting Plc

Consolidated statement of cash flow

for the year ended 31 March 2014 (unaudited)

Penna Consulting Plc

Notes to the preliminary announcement

for the year ended 31 March 2014 (unaudited)

Basic and Diluted

Diluted earnings per share cannot result in a lower loss per share than basic earnings per share, therefore the diluted earnings per share for the current year is the same as the basic earnings per share.

6. Discontinued operations

In February 2014 the Board decided to discontinue its operations in Belfast due to continuing operating losses. Consequently, assets and liabilities allocable to the operation were classified as a disposal group. Revenue and expenses, gains and losses relating the discontinuation of this subgroup have been eliminated from the Group's continuing operations and are shown as a single line item on the face of the income statement.

Comparative figures for the year ended 31 March 2013 also include the financial impact arising from the Group's discontinued operations in Sweden which was closed in March 2013.