Half-year Report

Management Resource Solutions PLC

Half Year Report

Period Ended

31 December 2016

Company number: 8046513

CEO's Statement

Dear shareholders,

The Half Year results show a Net Loss Before Tax of A$3.2m on Revenue of A$20.6m.

Shareholders should be aware that the going concern basis of preparation of these interim accounts is based on the Directors assumptions, having prepared a cash flow forecast, of the Company's working capital requirements and the need to access additional equity funding or asset divestment if required within the next 12 months.

Restructure

Significantly underperforming business units within MRS necessitated a restructure of the group in October/November 2016:

Non-Recurring Costs

Significant non-recurring costs have been incurred to date in FY17 to fund the restructure of MRS group as well as the acquisition and restructure of the Subzero assets to establish the MRS Services Group (MRSSG):

Of the above, A$1,920k has been recognised in the first half of FY17.

MRS Services Group Performance

Upon the acquisition of MRS Subzero, out of its Receivership, there was a requirement to make major structural changes to overhead and occupancy costs resulting in significant restructuring and non-recurring costs. This was planned prior to the acquisition. A lack of working capital and the resulting cash constraints has impacted the performance of the business. MRSSG has implemented an overhead reduction program outlined above and is in the process of implementing operating cost savings with installation of bulk oil, gas and fuel to the workshops and implementing consumable kiosks with resulting savings in consumable and inventory costs. Every facet of the business is under review to streamline costs.

Bachmann Plant Hire

All the documentation, agreements and payment of consideration are now complete for the purchase of BPH, save for the outstanding issue of new shares to the value of A$500,000, as previously announced.

BPH continues to perform well against budget. It is a mature, established business with a 50 year history of civil earthworks in Ipswich and will continue to operate effectively in this sector.

Group Performance

The business restructure, ensuing non-recurring costs and the underperformance of MRSSG have put significant strain on cash flow which has impacted the growth of the business to date and our ability to take advantage of opportunities in the market.

MRS Outlook

The focus for MRS going forward is the consolidation of the four "pillars" of the business and developing the business strategy and framework to drive the performance of the Group. When recovered from the current cash constraints the business will be in a very good position to take advantage of the coal industry upturn in the Hunter Valley and the residential growth in Southern Queensland.

On behalf of the Board, I would like to thank the MRS employees, clients, suppliers and shareholders for maintaining the belief in the Company in difficult times.

GW (Joe) Clayton

Chief Executive OfficerManagement Resource Solutions PLC

Management Resource Solutions PLC

Management Resource Solutions PLC

Condensed Consolidated Statement of Changes in Equity

Management Resource Solutions PLC

Management Resource Solutions PLC

1. Accounting Policies

The condensed consolidated unaudited interim financial information set out in this report is based on the financial statements of Management Resource Solutions plc ("MRS"). The condensed financial information should be read in conjunction with the annual financial statements for the year ended 30 June 2016, which were prepared in accordance with International Financial Reporting Standards. The interim financial information for the Group for the six months ended 31 December 2016 was approved and authorised for issue by the Board on 7th April 2017. This interim financial information has been prepared in accordance with the accounting policies that are expected to be applied in the Report and Accounts of MRS for the year ending 30 June 2017 and are consistent with International Financial Reporting Standards adopted for use in the European Union.

2. Basis of preparation

The financial information for the six months ended 31 December 2016 does not constitute the Company's statutory financial statements for those periods. The comparative financial information for the full year ended 30 June 2016 has been derived from the statutory financial statements for that period. The statutory accounts for the year ended 30 June 2016 have been filed with the Registrar of Companies.

The financial statements are presented in Australian Dollars and all values are rounded to the nearest thousand dollars ($'000) except where otherwise indicated.

3. Going concern

The interim financial information has been prepared on the going concern basis as, in the opinion of the Directors, at the time of approving, there is a reasonable expectation that the Group will continue in operational existence for the foreseeable future.

As reported in the Annual Report for the year ended 30 June 2016, closure of the former consulting business has brought major cost savings and the Group has secured further finance facilities. Based on these developments and on the Company's ability to modify expenditure outlays further if required, and to source additional funds, the Directors consider there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable, and therefore the going concern basis of preparation is considered to be appropriate for the financial report for the year ended 31 December 2016. The Board of Directors are aware, having prepared a cash flow forecast, of the Company's working capital requirements and the need to access additional equity funding or asset divestment if required within the next 12 months.

In the event that the Company is not able to continue as a going concern, it may be required to realise assets and extinguish liabilities other than in the normal course of business and perhaps at amounts different to those stated in its financial report.

4. Earnings / (loss) per share

Earnings / (loss) per share is calculated on the reported loss for the period of $4,030,000 and on 57,554,573 ordinary shares, being the weighted average number of shares in issue throughout the period ended 31 December 2016.

For diluted earnings per share, the weighted average number of ordinary shares in issue has been adjusted to assume conversion of all dilutive potential ordinary shares. The Company has two classes of dilutive potential ordinary shares, being share options granted to directors and employees and warrants to subscribe for ordinary shares issued in connection with the placing of ordinary shares on 11 December 2014.

Management Resource Solutions PLC

5. Subsequent events

6. Acquisition of business

On 30 September 2016 the Company, through an Australian subsidiary, acquired the business and various assets of SubZero Group Limited ("SZG") for a total consideration of $6.12 million (comprising a cash payment of $1 million on settlement, a deferred payment of $500,000 payable in cash 12 months after the date of completion and the issue of 7,596,967 new ordinary shares of Û0.01 each in Management Resource Solutions plc).

The acquisition had the following estimated effect on the group's assets and liabilities.

7. Interim Statement

Copies of this Interim report for the six months ended 31 December 2016 will be available on the company's website www.mrsplc.net