Half Yearly Report

8 May 2012

JELF GROUP PLC ("Jelf" or the "Group")

Interim Results for the six months ended 31 March 2012

Jelf, an independent full service brokerage that supports businesses and individuals, announces its interim results.

Financial highlights

Strong financial performance continues:

·; Revenues in line with last year at £35.2m (2011: £35.0m)

·; EBITDA increased by 5% to £4.4m (2011: £4.2m)

·; EBITDA margin increased to 12.6% (2011: 12.1%)

·; Earnings per Share increased by 41% to 1.0p (2011: 0.7p)

Cash generated from operations continues to be strong:

·; Net debt down to £1.1m (2011: £10.0m)

Operating highlights

·; Revenues in the Insurance business are up 4% to £23.3m (2011: £22.3m)

·; New business sales in the Insurance business are up by 14%

·; Margins in the Employee Benefits business increased by 7%

·; Margins improved at the same time investment continues to be made in improving organic growth

Alex Alway, Group Chief Executive said:

"The Group continues to make progress and the investment within the business in growth initiatives and in further improving cost efficiencies continues to make a difference. It is anticipated that this will drive improved performance in 2012/13 and beyond."

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/Max Hartley 0207 397 8900

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

Chairman's statement

I am pleased to report on another period of encouraging performance for the Jelf Group.

Despite difficult economic conditions and a very competitive market environment, we have maintained revenues for the 6 months ended 31 March 2012 at £35.2m (2011: £35.0m), increased EBITDA by 5% to £4.4m (2011: £4.2m) and increased Earnings per Share by 41% to 1.0p (2011: 0.7p). This is a very pleasing performance which has been delivered through a continued clear focus on productivity, efficiency and margin improvements.

The renewed focus on organic growth which we announced last year is progressing well. We are making a number of investments in strengthening our sales capability and systems and support infrastructure and we are confident that these investments will contribute to growth through the rest of 2012 and 2013. One example of this is our new London office where the new sales teams are already delivering excellent results.

In support of this Management have put in place a new 3 year strategic framework which has been communicated to all our people throughout the business. The framework continues the focus on organic revenue growth and increased margins through sales productivity and efficiency improvements.

We have a strong balance sheet with net debt at 31 March 2012 down to £1.1m (2011: £10.0m) and are generating good operational cash flows. This gives us considerable flexibility to take advantage of any acquisition opportunities that fit with our business, where the price is realistic and where we can create shareholder value.

In view of our strong balance sheet, financial performance and prospects, the Board will, before the year end, review the Group's dividend policy.

We have an excellent senior management team and expert and committed people throughout the Group who are producing consistently strong results and, on behalf of the Board, I would like to thank them.

Jelf is well placed to continue to weather the difficult external environment and to benefit from any upturn in the economy.

Les Owen

Non-executive Chairman

Group Chief Executive's Statement

The business has performed well during the first six months of this financial year. Revenues have been maintained and we have achieved improvements in both profitability and margin.

The new 3 year strategic framework which is focused on continuing to foster organic growth and margin improvement was launched in January.

Our focus for the first six months of this financial year has been on:

·; Continued development of our new business and client retention

·; Continued investment in growth initiatives and further improving cost efficiencies

·; Developing our lead generation and client engagement programmes

·; Paying down debt ahead of schedule

The rate movements that we reported at the year end in Motor Insurance have now dropped away as Insurers have re-appraised claims provisions in light of performance. There have been some increases in Medical Insurance and Group Risk insurance ratings but these remain the exception and no other improvement of Insurance ratings has been detected to date.

In the last quarter of 2011 we opened our first London office and this is now performing ahead of schedule. It is expected that this will provide a blueprint for further development in the capital.

We have continued to develop our new business sales and client engagement and I am pleased to be able to report good progress in our Insurance business with a 14% increase year on year in new business sales.

Financial performance

In the six months ending 31 March 2012 Jelf's revenues were slightly ahead of last year at £35.2m (2011: £35.0m). EBITDA increased by 5% to £4.4m (2011: £4.2m) and Earnings per Share rose by 41% to 1.0p (2011: 0.7p). Despite significant investment in growth initiatives as set out below, EBITDA margins improved by 4% to 12.6% (2011: 12.1%).

A further £0.5m of debt was repaid early during the period. This does not incur early repayment penalties and helps reduce our interest costs and results from our strong cash generation. Net debt at 31 March 2012 is £1.1m (2011: £10.0m).

Organisational development

We are in the middle of the investment programme which was sign posted at the time of the 2011 final results. It is anticipated that this investment in organic growth will produce benefits for future years in terms of improved performance. This investment is complemented by regular communication to staff and management to enable the Group to effectively develop this key resource.

The upgrade and integration in systems previously reported will be completed in 2012 and has gone to plan. We have also invested in upgrading the working environments in Gillingham and Plymouth which are major offices for the Group. Where we have upgraded the facilities we have seen improvements in the business performance.

Business Development

Insurance

Revenues for the Insurance business grew strongly in the period by 4% to £23.3m (2011: £22.3m) and EBITDA grew by 11% to £2.9m (2011: £2.6m) with an increase in margins. Insurance revenues represent 66% of Group revenues (2011: 64%).

The rate movements that we reported in Motor Insurance have now dropped away as Insurers have re-appraised claims provisions in light of performance. This reflects the general trend in shorter rating cycles. No other improvement of insurance rating has been detected to date. We anticipate that the current trading environment for our Insurance business will continue through 2012 into 2013.

New business performance continues to improve with a 14% increase year on year. 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 over time.

During the second half of 2012 we will be expanding our Insurance affinity business having recruited a team from a competitor. It is expected that this will lead to growth in 2013.

The final elements of the systems integration will be completed in the second half of 2012 and will leave the insurance business in a good shape for expansion.

We plan to continue to improve our margins despite a lack of improvement in the rating environment.

Employee Benefits

Revenues have reduced by 4% year on year but 2011 was an exceptional year for Corporate Pensions sales which we did not expect to repeat this year. EBITDA has been maintained at £1.5m (2011: £1.5m), margins have improved by 7% underpinning the focus on margin growth. Employee Benefits represents 24% of Group revenues (2011: 25%).

The Employee Benefits management team has been re-structured and we have invested in a small number of additional management positions to position for organic growth.

The market for quality advice on Employee Benefits remains robust and we are enjoying a sound trading environment. Several new corporate mandates have again been secured.

The Group Risk market has benefited from some re-rating which, when coupled with strong new business growth, has delivered results ahead of plan and is the first clear deliverable from our organic growth plans for this part of the business. We have recruited a small number of new sales executives who will produce growth in 2013.

Rates for Private Medical Insurance (PMI) have moved ahead slightly in the first half. However the benefits from this have been largely offset by increased competition. Revenues from the healthcare business continue to be weighted towards the second half of the financial year, particularly in the 3rd quarter.

The international PMI business continues to perform strongly and is an area for continued strong organic growth. We have seen an increased demand for advice from larger clients to support cover for employees abroad.

The Employee Benefits team won several industry awards in 2012 for the third year in a row.

Financial Planning

Revenues for the Financial Planning business have reduced in the period by 10% to £3.5m (2011: £3.9m) although the underlying recurring income has improved. A small EBITDA loss of £13k has arisen (2011: £0.1m profit) but this is not unexpected as we continue to invest in preparing for the Regulatory Distribution Review (RDR).

The Group's Chartered Financial Planning business is going through a period of considerable change ahead of RDR. The number of advisors has been reduced by management as we re-position the advice that we provide to clients. All advisors who remain are or will be qualified for the new regime.

In the current economic environment clients continue to look for improved returns and sound financial planning advice, and the demand for quality advice increases.

The Group has £483m (2011: £500m) in third-party funds on wrap and discretionary management mandates producing fund-based income. We provide advice on the individual client requirements and outsource the investment management to third parties.

We advise on an additional £500 million of client funds not currently on the platforms referred to above. We are overseeing a migration programme on to the new style platforms that will take a couple of years as it must align with customer requirements and sound advice.

Investment markets remain uncertain making it difficult to predict investment sentiment through 2012. It is difficult to predict an upturn whilst we operate in this challenging business environment.

The Financial Planning business represented 10% of revenues (2011: 11%).

Acquisitions

During the first six months we have made two purchases of small Insurance and Employee Benefits business portfolios that have complimented existing operations. These acquisitions were made from existing cash flows and did not stop the Group making early repayments of its loan facility. The focus throughout 2012 will continue to be on investment in organic growth and further improvement in productivity and margins.

We continue to review more material acquisition opportunities as they arise but we will retain a disciplined approach to price and value.

People

Staff and management responded positively to the new strategic framework that has been put in place. The levels of commitment and expertise continue to impress.

On behalf of the Board and senior management I would like to thank them.

Alex Alway

Group Chief Executive

Consolidated balance sheet

As at 31 March 2012

* Included within cash and cash equivalents is fiduciary cash of £11,433,000 (31 March 2011: £16,027,000; 30 September 2011: £14,485,000)

The notes to these accounts form an integral part of the consolidated financial statements. The financial statements were approved by the Board of Directors and authorised for issue on 8 May 2012. They were signed on its behalf by:

Alex Alway John HardingGroup Chief Executive Group Finance and Operations Director

Consolidated income statement

For the six months ended 31 March 2012

Consolidated statement of comprehensive income

For the six months ended 31 March 2012

Consolidated statement of changes in equity

For the six months ended 31 March 2012

1 Shown within other reserves on the balance sheet

2 The share based payment reserve is distributable to the equity holders of the Company

3 The Employee Benefit Trust (EBT) purchased 322,280 (2011: 400,000) shares in the period

Consolidated cash flow statement

For the six months ended 31 March 2012

1 Included within cash and cash equivalents is fiduciary cash of £11,433,000 (31 March 2011: £16,027,000; 30 September 2011: £14,485,000)

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 in note 10.

These unaudited consolidated 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 consolidated financial statements for the year ended 30 September 2011. These were prepared under International Financial Reporting Standards (IFRSs) and were authorised for issue by the Board of Directors on 13 December 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 interim financial statements have been prepared using accounting policies consistent with IFRSs as adopted for use in the European Union and the AIM rules as disclosed in the Group's statutory accounts for the year ended 30 September 2011. These consolidated interim financial statements do not comply with all the requirements of IAS 34 'Interim financial reporting' as the Group 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 (charge)/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. Unallocated segment assets relate to cash held in the parent Company.

4. Income tax charge/(credit)

5. Borrowings

On 30 March 2012, the Group made a £500,000 voluntary repayment on the loan facility.

6. Called up share capital

At 31 March 2012, the Company had authorised share capital of 100,000,000 (31 March and 30 September 2011: 100,000,000) ordinary shares of 1p each.

On 28 September 2011, the Company settled the last of the deferred consideration liability with 371,112 ordinary shares of 1p each at a price of 36p. This resulted in an increase of £3,711 to share capital and £129,889 to merger reserve, less costs of £7,000.

On 24 May 2011, 12,631 ordinary shares of 1p were issued at 12p to fulfil share options exercised by staff members.

7. Earnings per share

8. Cash generated from operations

9. Net debt

1Borrowings are shown gross of amortised loan costs of £366,000 (31 March 2011: £514,000; 30 September 2011: £438,000). See note 5 for details.

10 . Copies of the Financial Statements

Copies of these consolidated 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.