Half Yearly Report

Press Release 30 September 2014

WORK GROUP PLC

(the "Group" or "Company")

Interim Results

Work Group plc, the AIM quoted global consulting firm that builds business performance through innovative and integrated approaches to talent management, today announces its interim results for the six months ended 30 June 2014.

Headlines

· Group unaudited operating loss £132k (2013: loss £366k)

· Strong performances from our US and Hong Kong operations

· Operating loss(from continuing activities) more than halved to £116k (2013: loss £303k)

· Focussed investment on strengthening management and sales teams and new enterprise system

· Cash at period end of circa £0.5m

*Includes £1,957k profit on disposal of assets.

** Includes £2,200k goodwill impairment

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Chairman's Statement

Whilst we are encouraged by the progress of change in the Group, the turnaround in the UK has been slower than anticipated and the first half year results reflect this.

Nevertheless, the unaudited interim accounts show that in the US revenue growth has increased significantly by 58 per cent. to £493k (2013: £366k). Furthermore, both the US and Hong Kong returned to profitability with a combined operating profit of £109k (2013: Operating loss £191k).

The early turnaround signs are encouraging with a reduced operating loss from continuing operations of £116k (2013: loss £303k), and overall the increased gross margin of 59per cent. (2013: 53 per cent.) represents our focus on operational profitability.

We took the decision last year to move away from low-margin communications work and focus on higher margin work, particularly in the UK. As a result of this, the £787k drop in income is more than accounted for by client business activity in the corresponding period last year, but which did not repeat thereafter.

The cash position reflects the significant capital expenditure on the implementation of the Microsoft Dynamics enterprise system, together with the professional costs relating to the Armstrong Craven disposal.

Over the past three months we have reorganised the Company to create a UK trading subsidiary, appointed a UK Managing Director and created a partnership in order to enter the lucrative temporary recruitment market.

We remain committed to returning all regions to profitability and to explore all avenues for the maximisation of shareholder returns.

The Directors do not recommend the payment of an interim dividend.

Simon Howard

30 September 2014

Consolidated income statement

For the Six month period ended 30 June 2014

Consolidated statement of comprehensive income

for the six month period ended 20 June 2014

Consolidated balance sheet

As at 30 June 2014

Consolidated cash flow statement

for the six month period ended 30 June 2014

*Proceeds from disposal of property, plant and equipment relate to the disposal of business unit.

Notes to the interim financial information

1 Financial information and presentation

The Company is a limited liability company incorporated and domiciled in the United Kingdom. The address of its registered office is Marble Arch Tower, 55 Bryanston Street, London, W1H 7AA.

The Company has its primary listing on AIM, a market operated by the London Stock Exchange.

This condensed consolidated Interim Report does not comprise statutory accounts within the meaning of section 435 of the Companies Act 2006. Statutory accounts for the year ended 31 December 2013 were approved by the Board of Directors on 24 April 2014 and delivered to the Registrar of Companies. The report of the auditors on those accounts was unqualified, did not contain an emphasis of matter paragraph and did not contain any statement under section 498 of the Companies Act 2006.

2 Principal accounting policies

Basis of preparation

This condensed consolidated financial information is for the half-year ended 30 June 2014 and has been prepared in accordance with AIM Rules and accounting policies set out in the Group's 2013 annual report as amended for new standards effective during the period where relevant. These accounting policies are based on the EU-adopted IFRS and IFRIC interpretations that are applicable at the balance sheet date. IFRS and IFRIC interpretations that will be applicable at 31 December 2014, including those that will be applicable on an optional basis, are not known with certainty at the time of preparing this interim financial information. It is therefore possible that further changes to the accounting policies and the comparative financial information may be required before their publication in the 2014 annual report and financial statements.

Exceptional items

Exceptional items are those income or costs recognised as one-off or non-recurring in nature, and substantive in size. The separate reporting of exceptional items helps provide a better indication of the Group's underlying business performance.

Seasonality of operations

Due to the seasonal nature of the recruitment segment, higher revenues and operating profits are usually expected in the second half of the year than in the first six months.

3 Exceptional items

The exceptional profit of £264k (2012: £2,229k) relates to the release of a provision previously made in connection with the disposal of the business of Armstrong Craven in 2013.

4 Taxation

The deferred tax asset for the six month period ended 30 June 2014 is based on the estimated expected effective tax rate of 20 per cent. (2013 actual rate: 23.5 per cent.). No taxation has been provided on profits of overseas subsidiaries.

5 Earnings per share

As there are basic losses per share the effect of share options is anti-dilutive, consequently diluted losses per share equates to the basic losses per share

6 Reconciliation of operating loss to cash used in

Operations

Statement of directors' responsibilities

The directors confirm that this Interim Report has been prepared in accordance with AIM rules and accounting policies set out in the Group's 2013 annual report as amended for new standards effective during the period.

The directors are also responsible for the maintenance and integrity of the Company website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

The directors of Work Group plc are listed in the Work Group plc Annual Report for 31 December 2013. A list of current directors is maintained on the Work Group plc website: www.workgroup.plc.uk.

Principal risks and uncertainties

The Board consider the principal risks and uncertainties relating to the Group for the next six months to be the same as detailed in our last Annual Report and Accounts to 31 December 2013. Full details of the risks and uncertainties are detailed in the Directors' report section of those accounts. The principal risks to the business are:

· Economic uncertainty

· Loss of clients

· Loss of key employees

· Financial risk

By order of the Board

Simon Howard Rose Colledge

Chairman Chief Executive

30 September 2014 30 September 2014