Half Yearly Report

PENNA CONSULTING PLC

("Penna" or "the Group")

Interim Results for the six months ended 30 September 2013

12 November 2013

Penna Consulting Plc (PNA:AIM), the international human resources consulting group, today announces its interim unaudited results for the six months ended 30 September 2013.

FINANCIAL HIGHLIGHTS

· Profits after tax + 36% £0.8m (2012:£0.6m)

· Revenue - 3% £31.9m (2012: £32.8m)

· Earnings per Share + 38% 3.3p (2012: 2.4p)

· Debt No Debt (2012: £0.5m)

· Cash at period end + 33% £2.0m (2012: £1.5m)

· Interim Dividend + 50% 1.5p (2012: 1.0p)

OPERATIONAL HIGHLIGHTS

· Steady growth of earnings

· Important client contract renewals and new client wins

· Further progress within Recruitment Solutions

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

"I am pleased with the performance of the business for the first six months of the year with a positive year on year increase in earnings. The UK economy is now growing and we are seeing benefits from this and from a series of important client contract renewals and new client wins. We intend and expect all of our service lines to capitalise on this improving economic outlook to expand both by organic growth and by carefully planned acquisitions."

ENDS

For further information please contact:

Stephen Rowlinson, Chairman 0771 00 23699

Gary Browning, Chief Executive 020 7332 7754

David Firth, Finance Director 020 7332 7754

Charles Stanley Securities

Marc Milmo/Karri Vuori 020 7149 6000

Penna Consulting Plc

Chairman's Review

I am pleased to say that our first half results demonstrate that Penna's earnings are growing steadily. Following the usual seasonal pattern, profits for the period are modest but show substantial gains on the same period of last year. Profits after tax are up 36% to £0.8 million (2012: £0.6m) and earnings per share are up 38% to 3.3p (2012:2.4p). Prior year figures include losses from our Swedish operation which was closed at a later date. Excluding Sweden, the Company delivered a gain of 5.2% in profit after tax and of 6.5% in earnings per share.

Revenue overall was stable. Growth from Recruitment was offset by a reduction from Career Transition, which was as expected given the improved economic outlook. Earnings growth came from margin improvement and from a continuing focus on control of overhead costs.

The most important trend to emerge from these results is the continuing progress of Recruitment Solutions. This part of Penna's business broke even in H1 2011/12, produced an operating profit of £0.1 million in H1 2012/13 and has now delivered an operating profit of £0.6 million in the first half of 2013/14. The current level of profit is, of course, a fraction of what can potentially be achieved in the long term within a UK market for recruitment services of over £2 billion. However, the Penna recruitment services team has proved its ability to produce profitable growth even in an exceptionally challenging environment.

As noted in our Annual Report, our Career Transition consultancy has settled back to a post recessionary level of activity with Public Sector outplacement down 55% compared to H1 12/13 and Financial Services down 26% over the same period. As a result, net revenue in the half year was down 16% to £10.4m (2012: £12.4m) and Operating Profit down 11% to £0.9m. Our flexible cost model ensures that downward fluctuations in demand are not accompanied by steep falls in profit contribution. We are not expecting further significant reductions in revenue for Career Transition and the normal drivers of demand which include post-merger rationalisation, technical innovation, relocation and changes of management structures continue to account for the majority of projects undertaken. Penna's Career Transition offering is one of the world's leading outplacement practices and is a core part of the Group. Our strategy is to continue to expand market share within this important niche market both organically and by acquisition.

Penna continued to generate cash. In the 12 months between 30 September 2012 and 30 September 2013 the company paid £0.5m of dividends, eliminated debt of £0.5m, purchased its own shares at a cost of £145,000 yet still increased its positive cash balance by £0.5m to £2.0m.

Against this background the Board intends to continue its policy of buying in Penna shares. To that end shareholders were asked at the AGM on 26 September 2013 to approve a waiver under Rule 9 of the Takeover Code as further purchases by the company would have caused my shareholding to exceed 30%. The resolution was carried unanimously and we will therefore make further purchases on the company's behalf whenever shares are available at prices the Board considers favourable in relation to long term value.

As a further consequence of the ability of Penna to generate cash and as a sign of the confidence felt by the Board, an interim dividend of 1.5p (2012 : 1p) has been declared and this will be paid on 14 March 2014 to shareholders on the register on 14 February 2014.

Operating Review

The Company has two service groups, HR Consulting and Recruitment Solutions, each with a managing director reporting to the Chief Executive.

Divisional Breakdown

*includes Sweden which was discontinued in 2H of 2012/13

HR Consulting, includes our market leading outplacement service, board coaching, assessment, learning and development, performance and change. The division provided services to an impressive 761 clients in the six month period and once again we rank as the number one provider of outplacement services in the UK.

Net revenues from our HR Consulting division fell by £2.0m (16%) in the six month period. This followed the closure of the loss making Swedish operation and lower Career Transition revenues from the investment banking and public sectors. Some important new clients were gained in the period - there were 48 new clients in total including Heinz, Mars and Magnox. The benefit of these client wins will be seen towards the end of the current year and into 2014/15.

We also offer a range of Consultancy or Talent Management services including Assessment, Coaching, and Learning and Development and these have shown steady performance in the period, with assessment starting to shows signs of growth.

The decrease in net revenues from HR Consulting has been offset by significant reductions in the cost base through tight control on headcount and on overheads. Consequently the impact of the reduction in net revenues on operating profits has been largely offset. Operating profits in HR Consulting fell by only £0.2m from £1.1m to £0.9m. In addition to the new contracts we are beginning to see the impact of a recovery on corporate activity, particularly mergers and acquisitions and demergers and this is evidenced in two further new contracts with Lafarge Tarmac and Direct Line Group.

Recruitment Solutions combines our service capabilities in recruitment advertising and communications, managed recruitment and assessment, executive search and executive interim. This broad range of recruitment activities enables us to offer clients in both the commercial and public sector innovative solutions to their recruitment needs.

Revenues from Recruitment Solutions held up well in the period at £6.9m and the return to profitability reported on in this statement of last year continues with an impressive increase in profitability to £0.6m (2012: £0.1m).

Better margins and a continuing shift in the mix of work away from low margin advertising to higher margin consultancy based recruitment resulted in this improvement in profitability.

We have seen an increasing pipeline of new Recruitment contracts (66 in the period) including, for example, long term agreements with the Metropolitan Police, Santander and Ofsted. The continuing improvement in the UK economy will lead to an increase in recruitment activity across a wide range of clients. During recessions employees are cautious about moving jobs. However, once confidence returns people are prepared to move and as each move creates a vacancy the demand for recruitment support increases markedly.

Outlook

The UK economy is now growing and we are seeing benefits from this and from a series of important client contract renewals and new client wins. We intend and expect all of our service lines to capitalise on this improving economic outlook to expand both by organic growth and by carefully planned acquisitions.

Stephen Rowlinson

Chairman

12 November 2013

Unaudited condensed consolidated interim statement of comprehensive income

for the six months ended 30 September 2013

Penna Consulting Plc

Unaudited condensed consolidated interim statement of changes in equity

at 30 September 2013

Penna Consulting Plc

Unaudited condensed consolidated interim statement of financial position

at 30 September 2013

Penna Consulting Plc

Unaudited condensed consolidated interim statement of cash flow

for the six months ended 30 September 2013

Penna Consulting Plc

Notes to the unaudited condensed consolidated interim report

for the six months ended 30 September 2013

1. Basis of preparation

The unaudited condensed consolidated interim report for the period ended 30 September 2013 has been prepared under the historical cost convention, using accounting policies that are consistent with current International Financial Reporting Standards (IFRS) as endorsed by the European Union and also comply with IFRIC interpretation and Common Law applicable to companies reporting under IFRS. The condensed consolidated interim report should be read in conjunction with the annual financial statements for the year ended 31 March 2013, which were prepared in accordance with IFRS, as adopted by the European Union.

The unaudited condensed consolidated interim report has been prepared in accordance with the accounting policies adopted in the last annual financial statements for the year ended 31 March 2013 and applied consistently throughout the Group.

3. Earnings per share

The calculation of basic and diluted earnings per share is based on the following amounts: