Half Yearly Report

6 June 2011

Embargoed for 7am

JELF GROUP PLC

Interim Results for the six months ended 31 March 2011

Jelf, a leading independent consultancy providing expert advice on insurance, employee benefits, healthcare and financial planning, today announces its interim results for the six months ended 31 March 2011.

FINANCIAL HIGHLIGHTS

• Revenue in line with last year at £35.0m (2010: £34.9m) but EBITDAE increased by 2.0% to £4.2m (2010: £4.1m)

• Operating profits increased by 49% at £1.5m (2010: £1.0m)

• £1.5m early repayment of debt, strong cash generation continues

OPERATING HIGHLIGHTS

• Focus remains on improving margins through operational efficiencies

• Funds under advice rose to £500m (2010: £446m)

• Investment in people and systems continue

• Academies established for sales executives and managers.

• Awarded 2* "outstanding" customer service from Investor In Customers (IIC) for the third consecutive year

Alex Alway, Group Chief Executive, said:

"The wider economic climate remains challenging but Jelf has maintained its revenue levels and, thanks to the continued focus on operational efficiencies, both profits and margins have increased. This, coupled with a strong balance sheet puts the Group in an excellent position to take advantage of future opportunities."

Enquiries:

Jelf Group plc

Alex Alway, Group Chief Executive 01454 272713

John Harding, Group Finance and Operations Director 0117 315 6563

Cenkos Securities plc

Stephen Keys 0207 397 8900

Further information is available about Jelf at the Group's website: www.jelfgroup.com

Chairman's Statement

The business has performed well in the first half of this year, both in terms of improving underlying profitability and maintaining a strong balance sheet. We remain on course to deliver another good set of results in 2011.

Whilst overall revenues remained essentially flat in the first half of this financial year, we have seen organic growth in both our Employee Benefits and Insurance businesses. Operating profits improved by 49% (2011: £1.5m; 2010: £1.0m) due to a continuing focus on cost control and operating efficiencies but without the need to incur exceptional restructuring costs (2011: £nil; 2010: £0.4m). Earnings before interest, tax depreciation, amortisation and exceptional costs increased 2% year on year, (2011: £4.2m; 2010: £4.1m) and profit before tax also improved from a loss of £1.2m in 2010 to a profit of £0.8m in 2011.

Having now had an opportunity to carry out an initial review of the Group's strategy and operations I am confident that we have strong positions in all our chosen market segments and that we have the leadership, management capability and financial flexibility to invest in organic growth opportunities and in selective 'bolt on' acquisitions. We are well positioned to benefit from the economic recovery as it unfolds.

Our partnership with CapZ forged in 2010 has benefited the Group in providing a stable environment for management to operate. The Jelf Board and management continue to view this as a positive influence on creating value.

We recently announced that Jon Manson was stepping down from the Board. I was also pleased to be in a position to confirm that Jon will remain in the business and be able to devote his time to new business opportunities for the Group. On behalf of the Board I would like to put on record our thanks to Jon for his contribution to the Group to date and look forward to working with him in his new capacity.

Finally, on behalf of the Board I would like to thank our staff for their excellent efforts and our clients for their continued support.

Les Owen

Non-executive Chairman

Group Chief Executive's Statement

The business has continued to perform well in the first six months of this financial year, revenues have held up and we have achieved an increase in profitability and margin. Maintaining revenues against a continuing difficult economic backdrop is a good performance and our focus on improving margins means the business is well placed to take advantage of future opportunities.

No underlying trend in improved insurance rating has been detected to date although we are seeing rates increase on certain categories such as motor and medical insurance.

This financial year we have been working on increasing new business sales and I am pleased to be able to report good progress in both Employee Benefits and Insurance.

Financial performance

In the six-month period ending 31 March 2011, Group revenues were in line with forecasts at £35.0m (2010: £34.9m); Operating profits are £1.5m compared to £1.0m for the same time period last year and earnings before interest, tax, depreciation, amortisation and exceptionals (EBITDAE) increased by 2.0% to £4.2m (2010: £4.1m).

EBITDAE margin was increased to 12.1% (2010: 11.9%).

Although the first repayment of the loan, taken out in 2010, was not due until the 2nd quarter of this year, £1.5m was repaid prior to the interims and the balance now stands at £14.5m (2010: £16.0m). No penalty was incurred but it achieves a reduction in net interest costs and proves the strong cash generation capability of the business.

Profit before tax improved from a £1.2m loss in 2010 to a £0.8m profit.

Organisational development

We have invested in a number of people development programmes for our sales force to promote excellence in client work and management and to deliver superior performance for those involved. This investment is complemented by regular communication to staff and management to enable the Group to effectively develop this key resource.

We have also invested in new leased offices in Swansea and Stratford which have resulted in an improved working environment for staff and a platform for growth in these areas.

Business Development

Insurance

We have started to see some rate increases in elements of the market such as individual motor. The mid-to-large commercial insurance market continues to be competitive due to a mixture of competition and the wider economic climate. The smaller owner-managed sector, which makes up a substantial element of Jelf clients, continues to feel the effects of the wider economic climate and in turn continues to put pressure on Insurance premiums. We anticipate that the current trading environment for our Insurance business will continue through 2011 into 2012.

We continue to focus on tightly managing the margins whilst looking to build our sales capability through investing in new account executives to continue the sales momentum in this area over time.

The revenues for the insurance business improved marginally and represent 64% of Jelf total income for the six months ended 31 March 2011 (2010: 64%).

The insurance business remains positively geared to an improvement in the rating environment.

Employee Benefits

The market for quality advice on Employee Benefits still continues to grow and we are enjoying a good trading environment in this area. We are now seeing a desire amongst our clients to invest in this area and seek good advice. Several new corporate mandates have been secured by the Employee Benefits team in 2011. We are also seeing good strong Group Risk new business sales.

The rates for private medical insurance continue to harden and we are pleased to be able to report 2.6% growth on the previous year. The results of the healthcare business continue to be weighted towards the second half of the financial year, particularly in the 3rd quarter.

Overall the employee benefits business has achieved a 6.9% growth in revenues year on year and represents 25% of Jelf revenues for the six months ended 31 March 2011 (2010: 24%).

The Employee Benefits team have won additional industry awards in 2011.

Financial Planning

In the current economic environment individuals continue to look to improve returns and seeking sound financial planning advice however the quality of advice demanded has risen. Revenues have dropped by 11% to £3.9m when compared to £4.4m (2010) although profitability has increased.

Our advisors are currently either studying for or achieved required additional qualifications and we have retained our chartered status as a business.

The Group now has currently £500m (2010: £446m) in third-party funds on wrap and discretionary management programmes producing fund-based income. In addition we continue to advise on over £1 billion of client funds under advice in old style product structures. This has improved the size of the ongoing trail that can be derived from these investments enabling the Group to service clients and grow the business.

The market for investment in equities continues to remain strong but the current uncertainty makes it impossible to predict that this sentiment will remain throughout 2011.

The Financial Planning business represented 11% of revenues in the period ended 31 March 2011 (2010: 12%).

Acquisitions

The focus throughout 2011 will continue to be an investment in our people and infrastructure with a view to improving productivity and margins. An anticipated return to M&A has been slowed due to the lack of reasonably priced targets.

People

Jon Manson has indicated that he will be retiring from the Board whilst focusing on new business development. Jon has considerable experience in our markets and will add real value to the sales effort and client retention.

Finally, I would like to thank all our staff and business partners for their support and efforts over the last six months and we look forward to working with them in the future.

Alex Alway

Group Chief Executive

* Included within cash and cash equivalents is fiduciary cash of £16,027,000 (31 March 2010: £18,067,000; 30 September 2010: £11,241,000)

The notes on pages 9 to 14 form an integral part of the consolidated financial statements. The financial statements were approved by the Board of Directors and authorised for issue on 6 June 2011. They were signed on its behalf by:

Alex Alway John HardingGroup Chief Executive Group Finance and Operations Director

Consolidated statement of comprehensive income

For the six months ended 31 March 2011

Consolidated statement of changes in equity

For the six months ended 31 March 2011

1 Shown within other reserves on the balance sheet

2 Shown net of tax

The Group has applied s611 of the Companies Act 2006 in respect of Merger Relief.

1 Included within cash and cash equivalents is fiduciary cash of £16,027,000 (31 March 2010: £18,067,000; 30 September 2010: £11,241,000)

Notes to the consolidated financial statements

1. General information

Jelf Group plc is an AIM listed company incorporated and domiciled in the United Kingdom under the Companies Act 2006. The address of the registered office is given on page 14.

These Group condensed interim financial statements do not constitute statutory accounts within the meaning of Section 435 of the Companies Act 2006 and should be read in conjunction with the statutory accounts for the year ended 30 September 2010. These were prepared under International Financial Reporting Standards

(IFRSs) and were authorised for issue by the Board of Directors on 31 January 2011 and delivered to the Registrar of Companies. The Independent Auditor's report on those accounts was not qualified, did not include a reference to any matters to which the auditors drew attention by the way of emphasis without qualifying the report and did not contain statements under section 498 (2) or (3) of the Companies Act 2006.

These financial statements are presented in pounds sterling because that is the currency of the primary economic environment in which the Group operates.

2. Basis of preparation

These consolidated financial statements have been prepared using accounting policies consistent with IFRSs as adopted for use in the European Union and the AIM rules and as disclosed in the Group's statutory accounts for the year ended 30 September 2010. These condensed financial statements do not comply with all the requirements of IAS 34 'Interim financial reporting' as the Company is not required to adopt this.

3. Segmental Reporting

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The chief operating decision-maker has been identified as the Board, which is responsible for allocating resources, assessing performance of the operating segments and making strategic decisions.

All revenue arose within the United Kingdom. No geographical segment information is therefore given. Segment information about these businesses is presented below.

It is not practicable to separately identify the investment revenues, finance costs and income tax credit for each of the segments. Accordingly, consolidated figures have been presented.

The amounts provided to the Board with respect to total assets and liabilities are measured in a manner consistent with that of the financial statements. These assets and liabilities are allocated based on the operations of the segment.

4. Borrowings

On 31 March 2011, the Group made a £1.5m voluntary repayment on the term loan.

5. Called up share capital

At 31 March 2011, the Company had authorised share capital of 100,000,000 (31 March and 30 September 2010: 100,000,000) ordinary shares of 1p each, of which 85,320,582 (31 March 2010: 77,529,257; 30 September 2010: 84,949,782) ordinary shares have been allotted, called up and fully paid.

On 24 February 2010, the Company issued 27,713,939 ordinary shares of 1p each at a price of 36p. This issue resulted in an increase of £277,139 to share capital and £9,699,879 to share premium. At the same time, the Company issued 25,063,838 non-voting convertible shares (the "non-voting shares") of 1p each at a price of 36p. This resulted in an increase of £250,638 to share capital and £8,772,343 to share premium. The related transaction costs of £1,247,000 have been netted off against the share premium.

On 15 April 2010, the Company issued 7,420,525 ordinary shares of 1p each at a price of 36p in relation to the settlement of certain deferred consideration liabilities. The issue resulted in an increase of £74,205 to share capital and £2,597,184 to merger reserve.

On 31 March 2011, the Company entered into agreement to settle the last of the deferred consideration liability with 370,867 ordinary shares of 1p each at a price of 36p. This resulted in an increase of £3,709 to share capital and £129,803 to merger reserve. These shares will be formally issued in due course.

6. Exceptional costs

Exceptional costs are those items the Group considers to be one-off or material in nature that should be brought to the reader's attention in understanding the Group's financial performance. These costs are not associated with the ongoing activities of the Group. Exceptional costs are as follows.

7. Earnings / (loss) per share

1 Before deduction of amortisation of intangible fixed assets and exceptional items

2  In accordance with IAS33 Earnings per Share, the weighted average shares in issue has been used to calculate the loss per share due to the antidilutive nature of losses

8. Cash generated from operations

9. Copies of the Financial Statements

Copies of these Group condensed interim financial statements are available on the Group's website (www.jelfgroup.com) or from the Company Secretary at the Company's registered office: Fromeforde House, Church Road, Yate, Bristol, BS37 5JB.