Interim Results

PENNA CONSULTING PLC

("Penna" or "the Group")

Interim Results for the six months ended 30 September 2010

4 November 2010

Penna Consulting Plc (PNA:AIM), the international human resources consulting group, today announces its interim unaudited results for the six months ended 30 September 2010.

HIGHLIGHTS

·; Revenue down 6.8% to £45.1m (2009: £48.4m)

·; Pre tax profits before exceptional costs £0.1m (2009: £3.5m)

·; Cost reduction programme completed in first half will result in annualised savings of £4.6m at a cost of £0.95m

·; Loss before tax £0.8m (2009: Profit £2.5m)

·; Cash at period end £3.6m (31 March 2010: £5.3m); no bank debt

·; Interim dividend held at 3p (2009: 3p)

·; Growing pipeline of Public Sector revenues for outplacement and related restructuring services

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

"We continue to anticipate stronger profit performance in the second half and consequently expect to deliver a full year result in line with market expectations.We have restructured our cost base to align it with current levels of demand and a higher level of activity of outplacement and restructuring services is reflected in the trend of revenue and work in progress in the first weeks of the second half year."

ENDS

For further information please contact:

Gary Browning, Chief Executive 020 7332 7754

David Firth, Finance Director 020 7332 7754

Hawkpoint Partners

Graham Paton/Serge Rissi 020 7665 4500

Collins Stewart

Adrian Hadden/Ileana Antypas 020 7523 8350

Penna Consulting Plc

Chairman's Review

The half year to 30 September 2010 began five weeks before the General Election and ended three weeks before the publication of the Comprehensive Spending Review. Against a background of continuing gloom in international markets the timing of these important events created a period of deep uncertainty for all UK Private and Public Sector organisations. The inevitable result was a mood of hesitation and our clients put a number of reorganisation, recruitment, training and other HR projects on hold pending the outcome of the election. One of the first acts of the Coalition Government was to announce a freeze in Public Sector recruitment and the Comprehensive Spending Review has confirmed that the Public Sector is to embark on a four year period of retrenchment.

We anticipated these conditions and, in our Annual Report, I noted that we expected only marginal profits in the first half followed by a much stronger second half. As planned we have implemented a significant cost reduction programme during the first half and I am very pleased to say that our expectation that we would be agreeing a large number of outplacement contracts with the Public Sector has proved to be well founded. The combination of cost reduction and higher revenues means that we anticipate meeting our targets for the second half of the current year and we expect that these favourable conditions will continue into 2011/2012.

Revenue in the first half fell 6.8% to £45.1 million (2009:£48.4m) and Net Revenue was 12.5% lower at £21.8m (2009:£24.9m). As expected pre-tax profits (before exceptional items) fell to £122,000 compared to £3.5m in 2009.

During the period we completed a major cost reduction programme to align our cost base with current demand levels and as we enter the second half of this financial year our annualised operating costs have been reduced by £4.6m. Redundancy and other costs of the programme were £952,000 and this is reflected in the statement of comprehensive income.

Dividend

Our Balance Sheet remains strong. Cash at 30 September 2010 was £3.6 million and our only debt is a finance lease of £1.6m. Committed bank facilities of £3.0 million remain undrawn. We are maintaining the Interim dividend of 3p (2009: 3p) and this will be paid on 10 March 2011 to shareholders on the register on 11 February 2011.

Operational Review

Note: Comparative figures for Communications and Resourcing include the results from the acquisition

HR Consulting

Our HR Consulting business is a leader in Assessment, Executive Coaching, Leadership Development, Performance and Change consulting and is the UK's largest Career Transition consultancy. Career Transition is expected to benefit from the significant public sector downsizing and the associated requirement for career transition services and we have already seen the public sector pipeline begin to build.

Communications

In the period under review, our Communications business reported revenues of £18.1m while last year's comparative figures included the contribution of the acquired Barkers business for the three months since 29 June 2009. With the recruitment market remaining subdued, the Communications service group has realigned its cost base to match current trading levels and still enable it to service its existing long term contracts. The market is transitioning from traditional media to digital services and Penna's vision for this division is to become a leader in digital applications. While we expect that the recruitment advertising market will be slow to recover, the Communications team will continue to focus on developing its corporate client base and addressing changing public sector needs.

Executive Search & Interim

Despite the public sector recruitment freeze the service group generated revenues of £8.2m versus £8.0m in the comparative period last year. Being the UK's largest executive interim provider, our strategy is to further build the team with top performing new hires and acquisitions in the medium term. We believe that opportunities exist to expand this business within the private sector as the markets improve, through new client wins and cross-selling to other existing Penna clients.

Resourcing

As a major provider of "turnkey" recruitment projects, whose value added solutions generate high margins, our Resourcing business is well placed to benefit from the trend towards outsourcing and privatisation especially in an era of public sector budget constraints. Cross-selling opportunities exist for the division's innovative and bespoke solutions to be packaged with other Penna services to create tailored solutions to meet client needs. In the period under review, resourcing business reported revenues of £5.4m while last years comparative figures included the contribution of the acquired Barkers business for the three months since 29 June 2009.

Outlook

We continue to anticipate stronger profit performance in the second half and consequently anticipate delivering a full year result in line with market expectations. This will in part be based on the effect of the cost reduction programme but equally on the prospects for significant growth in revenue of our Career Transition business. Penna has an unrivalled position in the UK market for outplacement services and has long experience of the particular challenges facing people made redundant from the Public Sector. The services we offer seek to minimise the trauma of redundancy and to ensure the most rapid possible return to work for the people affected by restructuring. We believe the market for recruitment and related services will remain subdued but the effect of this will be more than offset by the strength of Career Transition.

Since the election we have gained 30 major new clients in the Public Sector and are in current dialogue with a further 46 organisations. These organisations include Central and Local Government bodies, Quangos, Police Authorities, Universities and the Health Service. A higher level of activity is reflected in the trend of revenue and work in progress in the first weeks of the second half year.

Stephen Rowlinson

Chairman

4 November 2010

Unaudited condensed consolidated interim statement of comprehensive income

for the six months ended 30 September 2010

Penna Consulting Plc

Unaudited condensed consolidated interim statement of changes in equity

at 30 September 2010

Penna Consulting Plc

Unaudited condensed consolidated interim statement of financial position

at 30 September 2010

Penna Consulting Plc

Unaudited condensed consolidated interim statement of cash flow

for the six months ended 30 September 2010

Penna Consulting Plc

Notes to the unaudited condensed consolidated interim report

for the six months ended 30 September 2010

1. Basis of preparation

The unaudited condensed consolidated interim report is for the period ended 30 September 2010 has been prepared under the historical cost convention, using accounting polices 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 2010, 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 2010 and applied consistently throughout the Group.

Non-GAAP performance measures

The directors believe that the adjusted profit and earnings per share measures provide additional useful information for shareholders on the underlying performance of the business. These measures are consistent with how underlying business performance is measured internally. The adjusted profit before tax measure is not a recognised profit measure under IFRS and may not be directly comparable with adjusted profit measures used by other companies. Adjustments have been made to reported profit before tax to exclude exceptional income and charges as these are one-off in nature and therefore create significant volatility in reported earnings.

2. Non-recurring exceptional items

Non-recurring exceptional items comprise expenses incurred by the Group in restructuring the cost base during the first half of the year. They are highlighted in the income statement because separate disclosure is considered relevant in understanding the underlying performance of the business. The expenses incurred in the prior year comprise costs incurred by the Group in integrating the trade and assets of the Barkers Group, purchased on 29 June 2009. The highlighted items arise from redundancy expenses, surplus property and other costs.

Penna Consulting Plc

Notes to the unaudited condensed consolidated interim report (continued)

for the six months ended 30 September 2010

4. Earnings per share

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

Penna Consulting Plc

Notes to the unaudited condensed consolidated interim report (continued)

for the six months ended 30 September 2010

7. Goodwill and intangible assets

Following the acquisition of Barkers an exercise to identify and assess the value of intangible assets acquired has been carried out.

Any value identified for intangible assets following this review has been separated from goodwill and amortised over the intangible assets' useful economic life. The value of goodwill has been adjusted by £300,000 on identification of additional opening liabilities relating to client rebates and other potential legal liabilities arising from the administration of Barkers.