Interim Results

−

Revenue increased 29% to £28.9m (2007:£22.5m)

−

Profits before tax quadrupled to £2.1m (2007:£0.5m)

−

Fully diluted earnings per share (EPS) quadrupled to 6p (2007:1.4p)

−

Strong balance sheet with net cash of £5m and no debt

−

Interim dividend 2p per share (2007:nil)

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

"I am very pleased to report some excellent results for the first half of the year. Performance has exceeded expectations and the interim dividend, expected to be 1 pence per share will now be doubled to 2 pence per share.

We are focused on increasing shareholder value and are optimistic about the future. All indications are that our Career Transition division, which accounts for 59% of the Group's net revenues, will experience further major expansion in the demand for its services in the coming months and years and we expect this to drive continuing growth of Penna's scale and profitability."

Stephen Rowlinson, Chairman

Gary Browning, Chief Executive

David Firth, Finance Director

0771 00 23699

020 7648 2448

020 7648 2423

Hawkpoint Partners

Graham Paton/Serge Rissi

020 7665 4500

Collins Stewart

Adrian Hadden

020 7523 8353

Pelham PR

Polly Fergusson

020 7743 6362

About Penna (www.penna.com)

Penna Consulting plc is a one of the largest HR consulting groups in the UK, and provides a range of HR consultancy services to companies across a range of sectors: Services include Recruitment Communications, Executive Recruitment, Executive Interim, Board and Executive Coaching, Leadership and Performance Consulting and Career Transition. Penna was placed 29th in The Sunday Times 100 Best Companies to Work For in 2008.

Penna Consulting Plc

Chairman's Statement

I am very pleased to report some excellent results for the first half of the year. Revenue is up 29% to £28.9m (2007:£22.4m) and net revenue is up 27% to £19.1m (2007:£15.0m). Profits before tax have more than quadrupled to £2.1m (2007:£0.5m) and earnings per share are 6.0 pence compared to 1.4 pence for the first half and 5.5 pence for the full 2007/08 year.

Penna's businesses are cash generative and our balance sheet is strong. Net assets are £20.8m (2007:£18.2m). Net tangible assets are £6.7m (2007:£4.2m) and net cash at mid year was £5.0m (2007:£0.9m). Your Board believes that in the current credit environment our strong cash position and lack of any need for bank finance is a major competitive advantage.

In the Annual Report published in June 2008 I noted the Board's recommendation of a 2 pence dividend in respect of 2007/8 and our expectation that the Board would be able to recommend a 1 pence interim and 2 pence final dividend for the current year. The Group's performance has, in the event, exceeded our expectations and we are therefore pleased to declare an interim dividend of 2 pence per share which will be payable on 4 March 2009 to shareholders on the register on 6 February 2009.

Six months to

30 Sept 2008

£'000

Six months to

30 Sept 2007

£'000

Change on

Prior period

%

Career Transition

11,301

8,111

+39%

Executive Recruitment

1,843

1,842

0%

Executive Interim

1,659

1,411

+18%

Recruitment Communications

587

384

+53%

Board & Executive Coaching

989

997

0%

Leadership & Performance Consulting

2,713

2,247

+21%

Total Net Revenue

19,092

14,992

+27%

Total Revenue 

28,894

22,419

+29%

Operational Review

Our core business - Career Transition - grew steadily through the 2007/08 financial year and the rate of growth accelerated as we entered the current year. Net revenue in the period under review grew by 39% compared to the six months to September 2007. As I noted in my statement at the AGM on 25 September 2008, these high volumes are the result of reorganisation decisions forced onto our client companies by the international financial crisis. Our Career Transition teams provide outstanding levels of service and support to our clients' ex-employees as they confront the challenge of unexpected and possibly unwelcome changes of career.

In parallel with the very strong performance of Career Transition our other divisions have performed well and together their net revenues are 20% ahead of last year in the UK and 13% ahead overall.

In the UK our Executive Recruitment net revenues have grown by 40% demonstrating the benefits of focusing on senior level public sector recruitment. Recruitment Communications had another period of very rapid growth and achieved a 53% advance in net revenues. Executive Interim continues to expand market share and net revenue grew by 18% to £1.7m in the period. Board and Executive Coaching maintained its revenues during the period and Leadership and Performance Consulting achieved net revenues of £2.7m, an increase of 21% on the same period last year.

Outside of the UK net revenues were 8% higher than the same period last year. Ireland saw very powerful demand for career transition and also its other services advanced by 31% resulting in overall growth of 49%. We did however experience a reduction in recruitment revenues in Paris during the period.

Outlook

The developed world has embarked on a period of major restructuring which will have profound effects on every branch of employment. Experience of previous periods of dislocation and recession suggest that many millions of people will be caught up in a process of change as some major sectors of employment decline and others develop and grow. This period may well last for three to four years and possibly for much longer.

Penna's mission is to facilitate fundamental changes in the world of work. Career Transition services are there to minimise the impact of events on individuals, to guide them through the process of identifying and evaluating many life and career alternatives and to assist them in finding exciting new roles capable of meeting their expectations. 

All indications are that our Career Transition division, which accounts for 59% of the Group's net revenues, will experience further major expansion in the demand for its services in the coming months and years and we expect this to drive continuing growth of Penna's scale and profitability.

Our other divisions are showing great resilience and we expect them also to play a central role in these challenging times. Executive Interim, Board and Executive Coaching, Leadership and Performance Consulting, Executive Recruitment and Recruitment Communications all provide services that are essential for our clients as they confront and overcome the challenge of recession and prepare for recovery.

Stephen Rowlinson

Chairman

11 November 2008

Notes

Six MonthsEnded

30 September2008£'000

Six Months Ended30 September 2007£'000

YearEnded31 March2008£'000

Continuing operations

Revenue

28,894

22,419

49,067

Operating expenses

(26,817)

(21,858)

 (47,065)

Operating profit

2,077

561

2,002

Finance net income/(costs)

62

(44)

(32)

Profit before tax

2,139

517

1,970

Tax

2

(600)

(156)

(592)

Profit for the period

1,539

361

1,378

Attributable to:

Equity holders of the parent

1,539

361

1,378

Earnings per share

3

Basic 

6.1p

1.4p

5.5p

Diluted

6.0p

1.4p

5.5p

30 September2008£'000

30 September2007£'000

31 March2008£'000

Non-current assets

Goodwill

14,036

14,036

14,036

Tangibles

1,667

1,934

1,850

Intangibles - software

24

33

32

Deferred tax

24

77

24

15,751

16,080

15,942

Current assets

Trade receivables

10,748

9,601

11,271

Other current assets

2,290

1,809

1,788

Cash and short term deposits

5,149

2,156

2,961

18,187

13,566

16,020

Total assets

33,938

29,646

31,962

Current liabilities

Trade payables

2,303

1,295

2,368

Bank overdrafts and loans

-

900

-

Loan notes

111

343

111

Obligations under finance leases

42

96

88

Short term provisions 

129

32

153

Corporation tax

753

165

154

Other creditors and accruals

9,434 

8,232

9,406

12,772

11,063

12,280

Non-current liabilities 

Obligations under finance leases

-

37

-

Long term provisions

390

311

351

390

348

351

Total liabilities

13,162

11,411

12,631

Net assets

20,776

18,235

19,331

Capital and reserves

Called up share capital

1,264

1,264

1,264

Share premium account

15,109

15,109

15,109

Merger reserve

10,170

10,170

10,170

Employee share option plan reserve

(397)

(397)

(397)

Foreign currency translation reserve

(120)

(13)

3

Retained loss

(5,250)

(7,898)

(6,818)

Total equity

20,776

18,235

19,331

Called upsharecapital£'000

Sharepremium£'000

Mergerreserve£'000

ESOPreserve£'000

Foreigncurrencytranslation£'000

Retainedloss£'000

Totalequity£'000

At 1 April 2007

1,264

15,109

10,170

(397)

66

(8,263)

17,949

Share issue

-

-

-

-

-

-

-

Currency translation differences

-

-

-

-

(79)

-

(79)

Profit for the period 

-

-

-

-

-

362

362

Share option credit

-

-

-

-

-

3

3

At 30 September 2007

1,264

15,109

10,170

(397)

(13)

(7,898)

18,235

Share issue

-

-

-

-

-

-

-

Currency translation differences

-

-

-

-

16

-

16

Profit for the period

-

-

-

-

-

1,016

1,016

Share option credit

-

-

-

-

-

64

64

At 31 March 2008

1,264

15,109

10,170

(397)

3

(6,818)

19,331

Share issue

-

-

-

-

-

-

-

Currency translation differences

-

-

-

-

(123)

(123)

Profit for the period

-

-

-

-

-

1,539

1,539

Share option credit

-

-

-

-

-

29

29

At 30 September 2008

1,264

15,109

10,170

(397)

(120)

(5,250)

20,776

Notes

Six MonthsEnded 30September2008£'000

Six MonthsEnded 30September2007£'000

YearEnded 31March2008£'000

Cash flows from operating activities

Cash generated/(used) by operations

5a 

2,240

(73)

2,497

Tax (paid)/refunded

(1)

1

(393)

Interest received/(paid) - bank interest

69

(44)

(17)

Net cash generated/(used) by operating activities

2,308

(116)

2,087

Cash flows used in investing activities

Net purchase of property, plant and equipment

(67)

(209)

(415)

Net cash used in investing activities

(67)

(209)

(415)

Cash flows used in financing activities

Interest paid - finance leases

(7)

(9)

(15)

Repayment of finance leases

(46)

(40)

(94)

Repayment of loan notes

-

(88)

(320)

Bank loan repaid

-

(600)

(1,500)

Net cash used in financing activities

(53)

(737)

(1,929)

Net increase/(decrease) in cash and cash equivalents 

2,188

(1,062)

(257)

Cash and cash equivalents at start of period

2,961

3,218

3,218

Cash and cash equivalents at end of period

5b

5,149

2,156

2,961

1. Accounting policies

The consolidated interim financial statements are for the six months ended 30 September 2008. They have been prepared under the historical cost convention using accounting polices that are consistent with current International Financial Reporting Standards (IFRS). The interim financial statements have neither been audited nor reviewed pursuant to guidance issued by the Auditing Practices Board.

2. Taxation

Taxation has been provided for at 28% (2007:30%) for the UK and at appropriate rates for overseas earnings.

3. Earnings per share

The calculations of basic and diluted earnings per share are based on the following amounts:

Six monthsended 30September 2008

Six monthsended 30September2007

Year ended31 March2008

Earnings

Profit from continuing operations (£'000)

1,539

361

1,378

Profit for the period (£'000)

1,539

361

1,378

Number of shares

Weighted average number of 

Shares

25,173,348

25,173,348

25,173,348

Dilution effect of share option 

Schemes *

515,572

-

14,495

Diluted weighted average number 

of Shares

25,688,920

25,173,348

25,187,843

Earnings per share:

Basic

6.1p

1.4p

5.5p

Diluted

6.0p

1.4p

5.5p

5a. Reconciliation of operating profit to net cash flow from operating activities

Six MonthsEnded30 September2008£'000

Six MonthsEnded30 September2007£'000

YearEnded31 March2008£'000

Operating profit

2,077

561

2,002

Adjustments for:

Depreciation

258

264

532

Share option expense

29

3

67

Changes in working capital:

Decrease/(increase) in trade and other receivables

21

451

(1,187)

(Decrease)/increase in trade and other payables

Surplus property provision reversed

(145)

-

(1,352)

-

1,161

(78)

Cash generated/(used) by operations

2,240

(73)

2,497

5b. Cash and cash equivalents

At30 September2008£'000

At30 September2007£'000

At 31 March2008£'000

Cash and cash equivalents are made up as follows:

Net cash 

5,038

2,045

2,850

Cash on restricted deposit

111

111

111

Cash and cash equivalents

5,149

2,156

2,961

6. Nature of the financial information

The financial information set out in this document does not constitute statutory accounts within the meaning of Section 240 of the Companies Act 1985. Statutory accounts for the year ended 31 March 2008, on which the auditors gave an unqualified audit report, have been delivered to the Registrar of Companies and copies of the Interim Report can be obtained from our Registered Office at 3rd Floor, St Mary's Court, 20 St Mary at Hill, London EC3R 8EE.

The Board of Directors approved the Interim Report on 11 November 2008. The financial information in respect of the six months to 30 September 2008 has neither been audited nor reviewed pursuant to guidance issued by the Auditing Practices Board.