Half Yearly Unaudited Interim Results

PENNA CONSULTING PLC

("Penna" or "the Group")

Interim Unaudited Results for the six months ended 30 September 2015

Penna's Profit after Tax up 36% in First Half and Interim Dividend doubled to 4p per share

10 November 2015

Penna Consulting Plc (PNA: AIM), the international human resources consulting group, today announces its unaudited interim results for the six months ended 30 September 2015.

FINANCIAL HIGHLIGHTS

· Gross Revenue +15% to £47m (2014: £41m)

· Net Revenue +20% to £25m (2014: £21m)

· Operating Profit +34% to £2.8m (2014: £2.1m)

· Profit after Tax +36% to £2.3m (2014: £1.7m)

· Earnings per Share +36% to 9.1p (2014: 6.6p)

· Interim Dividend +100% to 4.0p (2014: 2.0p)

· Net cash £4.2m (31 March 2015: £2.3m)

· Net cash generated by operating activities £3.7m (2014: £1.0m)

OPERATIONAL HIGHLIGHTS

· Further impressive growth of Recruitment Solutions: Net Revenue +25% to £11.2m (2014: £8.9m) and Operating Profit +16% to £1.6m (2014: £1.3m)

· Steady performance from Career Services: Net Revenue +8% to £10.4m (2014: £9.9m) and Operating Profit held at £1.8m

· Turnaround of Talent Practice: Net Revenue +45% to £3.1m (2014: £2.6m)

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

"Penna made further substantial progress in the first half with Profit after Tax up 36% to £2.3m and Earnings per Share up 36% to 9.1p. These advances are particularly noteworthy because comparisons are with performance in H1 last year, which at the time I was able to describe as "by far the best first half performance from the Company since the beginning of the recession in 2009".

As the UK economy continues to grow we are seeing a significant rise in clients' expenditure on recruitment and other HR projects. Penna continues with impressive momentum and we remain confident of the outlook for the Group. We now believe that profit for the year will be ahead of management's original expectations and we are doubling the Interim Dividend."

ENDS

For further information please contact:

Penna Consulting Plc

Gary Browning, Chief Executive 020 7332 7993

David Firth, Finance Director 020 7332 7993

Panmure Gordon (UK) Ltd

Nominated Adviser and Broker

Mark Taylor 020 7886 2977

Karri Vuori 020 7886 2976

Vigo Communications

Ben Simons, Jeremy Garcia or Fiona Henson 020 7016 9570

Penna Consulting Plc

Chairman's Review

Penna has completed another successful first half with Profit after Tax up 36% to £2.3m (2014: £1.7m) and Earnings per Share up 36% to 9.1p (2014: 6.6p).

The UK Recruitment market has continued to strengthen but has yet to regain the levels of activity seen before the recession. Against that background our Recruitment Solutions division continues to impress by delivering record half year net revenue and profit figures. A combination of a recovering market and further gains in market share produced 25% growth in net revenue to £11.2m (2014: £8.9m) and a 16% gain in operating profit to £1.6m (2014: £1.3m).

Penna's Career Services division includes our Outplacement business. Typically, two major drivers of demand are large scale mergers leading to rationalisation and the cycle of expansion and contraction in the financial services sector. In the period under review there was relatively subdued M&A activity in the UK and no pronounced downsizing in the City of London. Nevertheless Career Services grew net revenue by 8% to £10.4m (2014: £9.9m) and maintained operating profit at £1.8m (2014: £1.8m) in line with last year.

The Talent Management division achieved management's target of eliminating last year's operating loss (£0.3m) and grew net revenue by a substantial 45% to produce net revenue of £3.1m (2014: £2.4m). Talent Management continues to win new projects and is increasingly benefiting from its ability to provide clients with creative and practical solutions to the need for constant upgrading and changing of employee skill sets. Spain, our one remaining overseas operation, also achieved a substantial increase of 45% in net revenue and a much reduced operating loss of £52,000 (2014: £144,000).

Penna can increasingly be seen as a developer and supplier of digital services. In every division we deliver solutions through a hybrid of traditional and online systems. A notable example is within Career Services where our industry leading face to face coaching practice is complemented by our proprietary outplacement tools. "Penna Sunrise" is our key digital package and in the last year over 30,000 individuals have used it as the core element of their job search. "BeMore" is another Penna online career development tool which clients provide to their employees to support them in the management and development of their careers within the organisation. Similarly, within recruitment, every major project has digital elements at its core. We have a growing stream of royalty income from digital and other services provided to third parties.

Penna's long term strategic objective has been to become the provider of the UK's widest range of HR services with a balance of investment and profit contribution between a range of business streams across recruitment, talent development and career services. I am pleased that we are achieving these strategic goals and that our two major divisions are now of similar size with net revenue in the half year of £11.2m from Recruitment Solutions and £10.4m from Career Services. Operating profits are also in balance with £1.6m from Recruitment Solutions and £1.8m from Career Services. 

Penna consistently generates cash. Cash generated from operations in the period was £3.7m. The Company has no debt and cash at 30 September 2015 was £4.2m (31 March 2015: £2.3m). Accordingly, we propose to continue with a progressive dividend policy and in addition to adopt the practice of spreading dividend payments to shareholders more evenly over the year. The intention will be that in most years the Interim Dividend will be at the same level as the subsequent Final Dividend. Following this new policy the Board has declared an Interim Dividend at double last year's level at 4p per share (2014: 2p) which will be paid on 17 March 2016 to shareholders on the register on 19 February 2016.

Operational Review

Penna offers a broad range of HR services to over 1,500 clients, spanning the employment lifecycle from recruitment activities, through assessment and development services to career transition and career development. The ability to combine specialist HR Services into talent solutions for our clients enables us to add value. This differentiates us from others in the sector.

In the first half of 2015/16, we have seen the momentum from the previous year continue and grow in each of our three service groups, with net revenues up 20% and operating profit increasing by 34% to £2.77m (2014: £2.07m).

Recruitment Solutions combines our expertise in Resourcing (attraction and branding, communications, managed recruitment and assessment), Executive Search and Executive Interim Management.

Net revenues grew significantly in the six months by 25% and profit increased by 16%. The Resourcing team had particular success winning and delivering a number of large scale long-term contracts providing increased visibility for our future revenue streams. The combination of services in this area, including attraction, sourcing, assessment and selection to support clients with specific recruitment issues, including diversity of the workforce, hard to source skills and brand challenges, means that the margins at 14% (2014: 15%) are higher than would normally be expected in volume based recruitment businesses.

The Recruitment Solutions business continues to service a diverse range of clients with particular strength in policing and security services, local authorities and retail. The company has a specific niche in "Transformation Recruitment" where we support organisations, for example local authorities, going through fundamental change resulting in the need for a change in the skills set of their personnel.

Our Talent Management team provides services to support clients in the assessment and development of talent, specifically leadership talent. Demand for these services has been increasing as clients continue to recognise that their management's quality, motivation and willingness to embrace continual change is the key to their long term success. Revenues grew 45% to £3.11m (2014: £2.15m). The division broke even in the period (2014: £0.34m loss) and we are confident that it will continue to grow and make a substantial profit contribution in the future.

Careers Services represents the portfolio of services aimed at providing clients and their employees with advice, guidance and consultancy on career direction and transition. It includes the UK's market leading Outplacement consultancy together with newer services in career development and redeployment. Penna created the UK's first Outplacement consultancy over 40 years ago and since that time has supported over one million individuals as they made the transition from one phase of their career to another.

Net revenue in the six months to 30 September 2015 increased 8% to £10.43m (2014: £9.65m). This growth was achieved despite a strong macro-economic environment. This demonstrates yet again that Outplacement services are in demand throughout the business/economic cycle.

Globalisation in the Outplacement sector continues and we are very pleased to report that the global network we established three years ago The Career Star Group (CSG) has matured into a major competitor for larger international contracts. Today CSG has representative members in 74 countries and serves around 7,000 corporates and other organisations.

Supporting individuals going through a career change as a result of a redundancy is now widely endorsed by the vast majority of large employers. Outplacement is increasingly acknowledged as representing best practice in HR which strengthens a company's brand and reputation as a good employer and promotes better productivity in the workforce. For the individual impacted, the support is invaluable. Penna supported over 30,000 individuals in the last year and, of these, 88% reported getting a new role on a higher salary than the one they left. National labour statistics reported on by the OECD (ONS Data) show that on average across the UK only 29% of people made redundant return to work within 3 months. In contrast, individuals supported by Penna return to work twice as fast as the national average with 60% getting a new role in less than 3 months.

Outlook

As the UK economy continues to grow strongly we are seeing a significant rise in clients' expenditure on recruitment and other HR projects. Penna continues with impressive momentum and we remain confident of the outlook for the Group. We now believe that profit for the year as a whole will be ahead of management's original expectations.

Stephen Rowlinson

Chairman

10 November 2015

Unaudited consolidated statement of comprehensive income for the six months ended

30 September 2015

Penna Consulting Plc

Unaudited consolidated statement of changes in equity at 30 September 2015

Penna Consulting Plc

Unaudited consolidated statement of financial position at 30 September 2015

Penna Consulting Plc

Unaudited consolidated statement of cash flow for the six months ended 30 September 2015

Penna Consulting Plc

Notes to the unaudited consolidated interim report for the six months ended

30 September 2015

1. Basis of preparation

The unaudited condensed consolidated interim report for the period ended 30 September 2015 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 2015, 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 2015 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: