Offer for Gordon Dadds & Placing to raise £20m

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THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR IMMEDIATE RELEASE. UPON PUBLICATION OF THIS ANNOUNCEMENT, THIS INSIDE INFORMATION, THIS INSIDE INFORMATION IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN.

12 July 2017

Work Group plc

("Work Group" or the "Company")

(to be renamed Gordon Dadds Group plc)

Offer for Gordon Dadds Group Limited

Conditional Placing to raise £20 million

Share Consolidation

Change of Adviser and Broker

Application for Admission of the Enlarged Share Capital to trading on AIM

Work Group (AIM: WORK) is pleased to announce that it has conditionally offered to purchase Gordon Dadds Group Limited ("Gordon Dadds"), an acquisitive London based law firm, via a share offer for an aggregate consideration of £18.8 million, to be satisfied by the allotment and issue of 13,417,143 New Ordinary Shares at a post-Consolidation price of 140 pence per share (4.375 pence per share on a pre-Consolidation basis) ("Acquisition").

Alongside the Acquisition, Work Group also announces that it has successfully raised £20 million via a conditional placing of new ordinary shares in Work Group at a post-Consolidation placing price of 140 pence per share (4.375 pence per share on a pre-Consolidation basis) ("Placing Price") to institutional investors ("Placing").

Highlights:

· Successfully raised £20 million via the Placing of 14,285,714 New Ordinary Shares (457,142,857 shares on a pre-Consolidation basis) ("Placing Shares") at the Placing Price.

· The Enlarged Group will have a market capitalisation of £40 million based on the Placing Price upon Admission to AIM.

· Proposed change of name to Gordon Dadds Group plc.

· Proposed consolidation of every 32 Existing Ordinary Shares into one New Ordinary Share ("Consolidation").

· On Admission, the Gordon Dadds' shareholders will own, in aggregate, approximately 46.9 per cent. of the Enlarged Share Capital.

Acquisition of Gordon Dadds

• Gordon Dadds is an acquisitive London based law firm with a twin track consolidation model to integrate mid-market law firms under the Gordon Dadds brand, and acquire smaller firms via its Prolegal acquisition vehicle.

• The turnover for the Gordon Dadds Group for the period ended 31 March 2017 was £25 million.

• Since 2013, Gordon Dadds LLP has grown from a £2.7 million turnover business to a £22.8 million turnover business by the end of March 2017, a compound annual growth rate of 70.7 per cent.

• The Acquisition constitutes a reverse takeover under Rule 14 of the AIM Rules requiring approval by shareholders at a General Meeting proposed to be held on 3 August 2017.

Market Opportunity

• The UK legal services market is poised for increasing consolidation, especially in the Enlarged Group's target market pool of £6.6 billion of annual revenue consisting of:

- nos.69-185 of the Top 200 law firms who between them have annual revenues of approximately £2.2 billion and which may be suitable for Gordon Dadds;

- c. 1000 UK firms with annual revenues of £2-10 million each who between them have annual revenues of approximately £4.4 billion and which are potential candidate firms for Prolegal.

• Gordon Dadds is well positioned in the market to take advantage of regulatory and financial changes having an early mover advantage and an experienced management team with a strong track record of successful and swiftly integrated acquisitions.

• Gordon Dadds has a purpose built, sophisticated and fully integrated technology platform, based in Cardiff, which has received £3.2 million of investment since 2013 and is ready to incorporate future acquisitions.

• Gordon Dadds has a strategy to develop new disruptive business methodologies, such as contract based lawyers for specific project-based work and the cross-selling of complementary professional services.

Details of the Conditional Placing

· Arden Partners plc ("Arden Partners") has conditionally agreed (as agent for the Company) to place the Placing Shares at the Placing Price to raise gross proceeds of up to £20 million before expenses and £17.9 million net of expenses.

· The Placing is conditional upon, inter alia:

o the passing of the Core Resolutions at the General Meeting;

o Admission taking place on or before 4 August 2017 (or such later date as Arden Partners and the Company may agree being not later than 31 August 2017); and

o the Placing Agreement becoming unconditional and not being terminated prior to Admission.

· Net proceeds of the Placing are to be used to fund the acquisition of Gordon Dadds to repay existing borrowings, and to be used as working capital to support the roll-out and integration of acquisitions.

· Arden Partners acted as sole broker in relation to the Placing and has been appointed the Company's nominated adviser and sole broker with immediate effect.

Adrian Biles, CEO of Gordon Dadds Group Limited, commented: "There is a significant opportunity to create a substantial legal practice in the UK and the proven Gordon Dadds' business model is uniquely placed to be a major consolidator in this fragmented market. Through the Gordon Dadds and Prolegal business units, the Group will provide an attractive platform for legal practices to gain the necessary scale to compete in the current market environment. The admission to AIM will provide the necessary capital for the Group's next phase of development and will also serve to enhance the Group's profile with clients and potential acquisition targets. We have a clear strategy for creating a strong, fast growing business and we look forward to delivering value to our shareholders and partners."

Simon Howard, Executive Chairman of Work Group plc, added: "Having evaluated a number of proposals the Existing Directors believe that Gordon Dadds's operations are compatible with the Company's investing policy and will be value enhancing for Shareholders. The Directors believe that the Enlarged Group will benefit from the significant opportunity presented by the UK legal services market."

For further information, please contact:

About Gordon Dadds

Gordon Dadds plc is an acquisitive legal and professional services firm headquartered in London with significant back office and technology functionality based in Cardiff. It currently employs 240 people, of whom 43 are back office staff. It operates through two distinct business channels, Gordon Dadds and Prolegal, to acquire law firms looking to gain scale in the UK.

Gordon Dadds: 

Gordon Dadds targets firms with annual fee income of £10m+ that are typically in the 69-185 range of the UK's top 200 law firms by revenue.

Prolegal:

Prolegal acquires and manages firms with £2m - £10m annual fee income. These firms also benefit from the back-office technology platform used by Gordon Dadds, which allows Prolegal to target smaller law firms seeking an alternative solution to the regulatory and investment requirements of the UK legal market.

Gordon Dadds Group plc is expected to commence trading on the London Stock Exchange (AIM: GOR) on 4 August 2017. Please visit www.gordondaddsgroup.com for more information.

Timetable of expected events

Admission statistics

1. 457,142,857 Existing Ordinary Shares on a pre-Consolidation basis

2. Assuming that all 100% acceptances of the Offer are received prior to Admission

3. 4.375 pence on a pre-Consolidation basis

Defined terms used in this announcement have the same meaning as set out in the Admission Document which will shortly be posted to shareholders and available to download at www.gordondaddsgroup.com and www.workgroupplc.com.

1. History of Work Group and background to and reasons for the Offer

The Company was originally admitted to trading on AIM in March 2006, raising £7 million at the time of admission to repay debt, strengthen the Company's balance sheet and seek further consolidation opportunities within the recruitment sector. Soon after admission, the Company acquired Recruitment Communications Company Limited and opened an office in New York to facilitate its expansion into the American market and in Hong Kong to service the Asian market.

The 2008 financial crisis significantly impacted on client recruitment activity and the Company was unsuccessful in its attempts to raise the finance necessary to further the Company's acquisition-led strategy. Subsequently major clients adjusted their buying behaviour and either brought activities in-house or concentrated their spending into major international competitors which led to a downturn in the financial performance of the business. Financial performance remained an issue and on 3 December 2012, the Company announced that it was considering all viable strategic opportunities to maximise value for shareholders, including the sale of individual parts of the business or the business as a whole. The review highlighted that the resources of the Company were not sufficient to meet the investment needs of the Company's operating subsidiaries and consequently the Company sold Armstrong Craven for a total consideration of £2.8 million in June 2013.

The Company conducted another strategic review in June 2015 to examine all opportunities for maximising value for shareholders. On 11 December 2015, the Company announced that it had entered into a conditional agreement for the sale of the Company's remaining operating subsidiaries to Capita Resourcing Limited (a subsidiary of Capita plc) for a cash price of £2 million (subject to working capital adjustments) (the "Disposal").

The Company has recently announced its results for the year ended 31 December 2016 which show a loss before tax of £0.5 million with marginal reported turnover. The net assets of the Company were £0.3 million and cash and cash equivalents were approximately £0.5 million. The Disposal represented a fundamental change to the business of the Company and the Company became an investing company under the AIM Rules. As a result, the Company had 12 months to implement its new investing policy or make an acquisition or acquisitions that constituted a reverse takeover pursuant to Rule 14 of the AIM Rules. The Company's investing policy for the purposes of the AIM Rules is to invest in, and/or make an acquisition in, the support and business services sectors in which the Existing Directors believe there are opportunities for growth which, if achieved, will be earnings enhancing for the Company's shareholders.

The Existing Directors have evaluated a number of proposals including that of Gordon Dadds. Given the business and progress of Gordon Dadds, the Existing Directors believe that Gordon Dadds' operations are compatible with the Company's investing policy and should be value enhancing for Shareholders.

The Directors believe that the Enlarged Group will benefit from a number of key factors which will differentiate it as a legal and professional services consolidator in the UK market:

· The significant market opportunity:

o The UK legal services market is poised for increasing consolidation, especially in the Enlarged Group's target market

o Substantial number of "risked" partnerships are in need of a quality solution

· Target pool of £6.6 billion of annual revenue amongst:

o nos.69-185 of the Top 200 law firms who between them have annual revenues of approximately £2.2 billion and which may be suitable for the Gordon Dadds LLP model

o c1000 UK firms with annual revenues of £2-10 million each who between them have annual revenues of approximately £4.4 billion

· Gordon Dadds is well positioned in the market to take advantage of regulatory and financial changes:

o Early mover advantage with an experienced management team with a strong track record of successfully acquiring and swiftly integrating acquisitions

o Growing reputation in the legal services market

o Focus for growth on London and the South East

· Gordon Dadds has demonstrated strong financial performance and cash generation capability:

o Expected to be a top 100 law firm in 2017

o Fully corporatised decision making

o Refined profit share model

o Partners and staff further incentivised through wide-spread share ownership

o London based front office

o £25 million turnover and £2 million adjusted profit before tax in 2017

o Gordon Dadds LLP 70.7 per cent. compound annual growth since 2013

· Gordon Dadds has a sophisticated and fully integrated platform which is ready to incorporate future acquisitions

o Purpose built technology hub

o "Nearshore" platform established in Cardiff to drive net operating profit improvement

o Developed over more than three years and received over £3.2 million of investment since 2013

· Gordon Dadds has a strategy to develop new disruptive business methodologies, such as contract based lawyers for specific project-based work and cross-selling of complementary professional services

2. The UK Legal Sector

The UK has a reputation as a leading global centre for the provision of international legal services and dispute resolution. The UK accounts for approximately 10% of global legal services fee revenue, second only to the United States. According to a report by CityUK in July 2016, fee revenue in 2014/15 amounted to £30.9 billion, an increase of 1.3% from the previous year.

The UK is widely regarded as the most international market for legal services, partly as a result of the widespread use of English law as a framework for international commercial contracts and dispute resolution. In recent years, there has been an increasing trend of external investment into UK law firms. Research from Arden Partners, titled "Analysis of external and corporate investment in UK law firms: sustainable momentum established" summarised the key highlights of recent external investment:

· Over £500 million invested in the UK legal sector by external investors

· Over £1 billion in annual revenue controlled by corporate investors

· 14 private equity investments

· Big accountancy firms taking advantage of ABS legal corporate structures are now generating annual revenues of approximately £40 million

· First UK corporate law firm IPO (excluding personal injury specialists) successfully completed in May 2015

It has been widely reported that the legal services sector is now primed for consolidation and the Directors believe this represents a significant opportunity for the Enlarged Group.

3. Gordon Dadds

Gordon Dadds is the ultimate holding company of Gordon Dadds LLP, an acquisitive law firm, and a group of other complementary businesses including Prolegal, a vehicle for acquiring and managing smaller law firms. Currently, there are more than 140 solicitors at Gordon Dadds LLP, designated as partners, associates, assistants or consultants and it is expected to be a top-100 law firm in the UK by turnover in 2017.

In the financial year ended 31 March 2017, Gordon Dadds had turnover of approximately £25 million and adjusted profit before tax of approximately £2 million.

The Directors believe that there is significant opportunity for consolidation within the UK legal services market in both the high-end advisory space through Gordon Dadds and the smaller, independent firms sector through the Prolegal model.

Gordon Dadds LLP has been exploiting this opportunity since 2013. It has spent £3.2 million building a tailor-made professional service back-office platform. Gordon Dadds' strong management team has already successfully integrated 10 firms onto this cost-efficient platform, all now trading under the Gordon Dadds brand. The Directors believe that there is an opportunity to continue to acquire and integrate other larger, high-end firms in the same way.

Smaller firms will be acquired by Gordon Dadds' subsidiary, Prolegal, and will be taken on to the platform in the same way as larger firms, but will continue to trade under their own names. Prolegal has recently made its first acquisition of a £1.6m revenue firm based in Wandsworth.

The Existing Directors consider that the acquisition of Gordon Dadds would be consistent with the Company's aim of making investments within the support and business services sector and should be value-enhancing for shareholders. They believe that Gordon Dadds has many opportunities for growth, both organically and through acquisition.

4. Gordon Dadds' Market opportunity

Challenged middle market firms (>£10 million annual revenue)

The UK legal services market is poised for accelerating consolidation especially in the middle market. Magic circle law firms and the "global elite" firms are beginning to dominate the top fifty law firms. Indeed, the completion of a three way merger (CMS, Nabarro and Olswang) in 2017 is a clear demonstration of the quest for scale. However the legal market has not seen anything like this scale of consolidation. With an average annual turnover of just £18.9 million, all of the middle market firms are sub-scale. In this challenged middle market many firms are experiencing a variety of pressures that the Directors believe represent a significant consolidation opportunity for the Enlarged Group.

These firms typically face competitive pressure on prices, meaning revenue per lawyer is lower, leading to profit margins that are below those of their larger rivals. Many have significant third party borrowings. Without scale, operating efficiency is hard to achieve as the necessary employee, back office and property costs comprise too great a proportion of total costs. This situation is aggravated by a lack of management capability; increasing IT and regulatory costs across the sector; and the historic unaddressed problem of "overstaffing". It is this band of firms that has the biggest challenge in differentiating itself in a market that is crowded, fragmented and which has significant external competition. The partner-owners of such firms are increasingly "at risk".

Many law firms have succession crises as fewer of the newer generation of lawyers are prepared to commit to a partnership in smaller firms. This leaves existing partners on a "legal carousel", unable to stop and extract their capital without finding either external capital or a buyer. A focus on the lock-step model and preservation of short-term partners' returns is leading to deterioration in the long-term outlook for many firms as the "consensual" model of a traditional legal partnership struggles to adapt to this new environment. These "risked partnerships" are increasingly seeking mergers and investment to secure their businesses.

Smaller firms (£2 - £10 million annual revenue)

There were 10,459 UK law firms operating in October 2016. This can be broken down into the following turnover segments:

· 22% or 2,321 law firms have an annual turnover of between £0.5 million and £2 million, this could equate to a market of approximately £1.5 to 2.9 billion;

· 7% or 682 law firms have an annual turnover of between £2 million and £5 million, this could equate to a market of approximately £1.5 to 2.5 billion; and

· 3% or 264 law firms have an annual turnover of between £5 million and £10 million, this could equate to a market of approximately £1.5 to 2 billion.

The 946 law firms in the £2m-10m turnover space are the Enlarged Group's primary target market for its Prolegal model.

Firms in this category are generally too small to offer full legal service and concentrate on serving small to medium-sized businesses and on family and private-client work. Their size means that their partner/owners find it difficult to recruit or retain high quality successors, because the larger firms attract the best talent. Their lack of economies of scale also cause significant margin pressure.

Prolegal model

Gordon Dadds has developed an innovative solution to address the issues facing many of the smaller independent law firms through its Prolegal acquisition vehicle. Under the Prolegal model, smaller acquisitions will not be rebranded Gordon Dadds or physically moved to Gordon Dadds' offices. They will continue to practise under their original names and from their original business premises, but will be moved onto the Gordon Dadds management, technology and regulatory platform.

A template structure of a Prolegal acquisition is highlighted below with retention of key personnel and growth of the business the key to the strategy:

· A low upfront percentage of turnover consideration is paid (the target is 10 - 15 per cent.).

· Earn-out based on a factor of turnover, payable in low % increments over 3 to 5 years (the "Earn-Out").

· Revenue-generating partners will move onto a revenue and referral profit sharing structure incentivising them to cross-sell.

· The Directors believe that the Prolegal model frees partners and staff of acquired firms to concentrate on gaining business and servicing clients, to the benefit of the clients and the firm.

· Being part of the Enlarged Group, firms will be able to refer specialised work across the firm, with the referring partners being rewarded in a transparent way for the value of the business done.

Attractiveness to prospective partners

The Gordon Dadds model offers a number of advantages to prospective partners of target firms. Partners are not required to borrow to fund capital contributions, capital is built up over time out of profit share with a relatively modest and achievable minimum contribution of £50,000. In owner-managed law firms, profit sharing structure is not always related to individual performance, nor is it always transparent. The traditional lock-step structure inevitably over-rewards timeservers and under-performers. In the Gordon Dadds model, each client is allocated a client care partner (the CCP) who receives, as allocated profit share, a percentage of annual revenues billed to those clients for whom he or she acts as CCP. In addition, each partner receives, as allocated profit share, a percentage of his or her personal billings, whether or not he or she is the CCP. Based on their extensive knowledge of, and soundings in, the legal marketplace the Directors believe that a Gordon Dadds LLP partner can achieve a significant uplift to what he or she might achieve in a traditional partnership practice.

The Gordon Dadds model, with its clear division between management and back office on the one hand, and client acquisition and servicing on the other, allows partners to devote time to their respective practice areas so enabling them to maximise their opportunities to give good service to their clients and for personal revenue generation and business development.

Most of the current Gordon Dadds' partners are already legally and/or beneficially entitled to Gordon Dadds Shares. Part of the rationale for the corporate structure and application for Admission is to enable future partners to be rewarded with share options pursuant to the Share Scheme or direct equity participation thus facilitating buy-in to the Gordon Dadds concept and an enduring investment in the Enlarged Group.

5. Regulatory evolution in the legal services market

The Legal Services Act 2007 created the opportunity for external investment in the legal sector through ABSs which enabled third party, non-lawyer investment into law firms for the first time in 2007. These structures offer a genuine funding alternative to the standard partner capital and bank lending that many firms rely on. They are also attractive to financial investors because of the potential for high profit margins through value-enhancing investment and efficiency-driven corporate models. Certain private equity investments have been made in the sector including the Business Growth Fund's investment in McMillan Williams Solicitors Limited and LDC's investment in Keoghs LLP. In June 2015, Gateley Holdings plc became the UK's first law firm to IPO, raising £5 million of new funds in the process. Some of the most recent external investments occurred in December 2016 when BGF invested £3.75 million in Setfords Solicitors to support the firm's expansion plans and LivingBridge invested in Stowe Family Law LLP in February 2017 to help the firm build a national footprint.

While the Top 200 legal firms have been slow to embrace fully the ABS model, others (notably, accounting firms) have been early adopters, intending to diversify their services, reinforce core client relationships and increase market share within their segments. Three of the "big four" (PwC, EY and KPMG) were granted alternative business structure licenses by the SRA in 2014 and are targeting the UK's legal middle market in a big way. As at 24 April 2017, a total of 892 ABS licences had been issued in the UK.

6. Information on Gordon Dadds

Gordon Dadds is the ultimate holding company of Gordon Dadds LLP, the law firm, and its associated businesses. Gordon Dadds also owns Prolegal which is an acquisition vehicle for smaller, independent law firms. The Directors believe that a successful roll-out of the Prolegal model will facilitate cross-selling of premium services into the wider Gordon Dadds Group and Gordon Dadds LLP in particular. Additional information departmental information is set out in the Admission Document.

Gordon Dadds' technology hub/near shore platform

Gordon Dadds has developed an effective professional services back office platform over the last three years. The platform is a cloud-based operating system with a combination of "off the shelf" components and bespoke systems. This platform has received over £3.2 million of investment since 2013 with the support of the Welsh government. Based on the strategy of moving front and back office roles from London to Cardiff, the Directors believe that the Welsh government will remain supportive as the Enlarged Group develops.

Gordon Dadds' Cardiff office became operational in August 2013 and has grown to support a back office team that consists of 38 accounting, compliance, HR and administrative personnel.

The investment in the platform has enabled Gordon Dadds to integrate acquisitions swiftly onto the Gordon Dadds operating system. The Directors believe the technology hub is tailormade for the roll-out of the Prolegal model thus enabling it to target smaller law firms seeking an alternative solution to the increasingly onerous regulatory and investment requirements of the current legal market.

History of Gordon Dadds

Gordon Dadds management identified an opportunity in the legal services market for a consolidation play and took advantage of the new ABS structure by establishing ACR Solicitors LLP in 2007. This was followed by the acquisition of the long-established solicitors' practice of Gordon Dadds in 2013 and the transformative pre-pack acquisition of Davenport Lyons in 2014. Since 2013, Gordon Dadds LLP has grown from a £2.7 million turnover business to a £22.8 million turnover business by the end of March 2017, a compound annual growth rate of 70.7 per cent. The turnover for the Gordon Dadds Group for the period ended 31 March 2017 was £25 million.

The majority of the growth of Gordon Dadds LLP to date has arisen from acquisitions in London and the South East region of England including those of Harris Cartier, Davenport Lyons, Jeffrey Green Russell Limited and Platt & Associates Limited.

Today Gordon Dadds LLP is a full service law firm whose main areas of business are dispute resolution, corporate, real estate, employment and immigration, tax, family & private client and regulatory solutions.

· Since 2013 Gordon Dadds has established complementary businesses providing a range of professional services such as actuarial, risk management, employee benefits and compliance advisory services. It has also acquired minority stakes in James Stocks & Co Ltd, a corporate finance and strategic advisory business; e.Legal Technology Solutions Limited, a company that develops technology solutions for the legal and regulated sectors and GD Financial Markets LLP, which focuses on remediation advice to financial institutions. In 2017, Gordon Dadds acquired The Hanover Trustee Company Limited and Hanover Pensions Limited, businesses which provide consultancy, administration and trusteeship services to small self administered pension schemes and final salary and money purchase schemes.

· Prolegal has recently acquired the practice of Alen-Buckley LLP, a £1.6 million turnover Wandsworth-based firm and the first acquisition under its model. A full timeline of acquisitions to date is set out in the Admission Document.

7. Competition

The UK legal market is extensive and diverse and ranges from the 'magic circle' elite and global international law firms with a UK presence through to the 'one-man band' high street practitioners with the national firms with multi-UK offices, typical London-centric middle market firms and boutique or specialist firms providing a range of legal services in between. Gordon Dadds LLP does not compete directly with the magic circle, global or high street firms. Its main competition is from regional firms capable of offering similar services at below London market rates and from middle market firms who are prepared to offer discounted rates to secure new business. Gordon Dadds' Cardiff office is a hedge to such competition by enabling it to offer quality services in certain practice areas at local rates. The Directors believe that its profit sharing structure is attractive to high quality lawyers and as such it is well placed to withstand competitive pressures by providing a high quality and consistent service across its practice areas.

8. Summary financial information on Gordon Dadds

The following summary of the historical financial information relating to the activities of the Gordon Dadds Group has been extracted from the historical financial information of the Company included in Section B of Part 4 of the Admission Document. In order to properly assess the financial performance of the Gordon Dadds Group, prospective investors should read the whole of the Admission Document and not rely solely on the summary set out below.

A pro-forma statement of the net assets of the Enlarged Group is set out in section B of Part 5 of the Admission Document.

With effect from Admission, the Enlarged Group's year end will be 31 March and the interim results date will be 30 September to match the reporting dates of the Gordon Dadds Group.

9. The Enlarged Group's strategy and AIM rationale

The Directors believe that there is a significant opportunity to create a substantial legal practice by the application of a different and modern business model, which does not rely on successful partners subsidising under-performing peers or ambitious young partners being held back until a senior partner retires or dies. They believe that this model can be applied in particular to existing businesses which are suffering financially or struggling to cope with key management and partner succession issues.

Since inception in 2013, Gordon Dadds has acquired and successfully integrated 10 professional services businesses. The Directors believe that there is significant scope for expansion of Gordon Dadds as a professional services group founded on its existing management skills and experience and using its tailor-made technology platform.

In addition, the Directors believe that profits can be enhanced by providing a more comprehensive service for clients across a number of professional disciplines with cross-selling of services a key goal.

The Placing and Admission will provide necessary capital for the Enlarged Group's next phase of development. Admission should also serve to enhance the Enlarged Group's public profile with clients and potential acquisition targets and assist with the recruitment, retention and incentivisation of partners and employees. The Directors believe that a strong balance sheet will be important in attracting new lateral hires and potential firms.

The Directors intend to double the Enlarged Group's revenue over the next 3 years. The Directors believe this will be achieved by:

· Applying the Gordon Dadds proven acquisition methodology to incorporate "risked" law firms and other professional service firms with re-incentivised key revenue generators able to earn significant profit share;

· Deploying the Prolegal model to well-established smaller law firms using the technology platform to reduce their office overheads;

· Organic growth and focus on current London and the South East foot print with "nearshore" back office operations in Cardiff;

· Incentivising and retaining key partners and employees via share ownership and the Share Scheme;

· Selective lateral hires from legal and complementary disciplines and possibly team hires; and

· Cross-selling across the Enlarged Group with significant incentivisation for partners.

The Enlarged Group will look to broaden and enhance its capabilities and accelerate its growth profile through acquisitions. The Directors believe that there are opportunities to pursue acquisitions which will enhance the Enlarged Group's core offering and broaden the Enlarged Group's professional services proposition by adding complementary businesses which can offer opportunities to cross-sell to clients, extend coverage and provide the opportunity to enhance operating margins and improve cash generation.

In the short term the Enlarged Group will seek to make acquisitions in the following areas:

· Law firms - There are 101 law firms in the Top 200 each with annual revenues of less than £22 million and, according to recent market research by Arden Partners, there is a significant band that will be challenged to achieve scale or develop efficiency. Succession planning in such firms is challenging, especially if they have high levels of debt. The partner-owners of such firms are typically exposed to significant strategic and business risks and the Directors believe this presents an opportunity for the Enlarged Group to act as a consolidator of firms ranked between 69 and 185 in the UK Top 200 market, especially amongst "risked" partnerships.

· Prolegal roll out - The increasing drive towards technology-led solutions has resulted in many smaller firms falling behind larger competitors in terms of technology investment. The Directors believe there is a significant consolidation opportunity for Prolegal in the £2-£10 million annual revenue space.

· Related professional service businesses - There are numerous complementary disciplines in the business services sector such as tax advisory services, financial services, compliance and risk management advisory services and legal recruitment. The Enlarged Group will continue to explore opportunities in such areas.

10. Current trading and prospects for the Enlarged Group

Work Group

The Company is currently an investing company and does not trade. Its full year results for the year ended 31 December 2016 were announced on 28 June 2017 and showed net assets of £0.3 million at the year end. Since 31 December 2016, the Company has incurred expenditure in line with the Existing Directors' expectations.

Gordon Dadds

Gordon Dadds' full year results for the year ended 31 March 2017 showed revenues of £25 million and adjusted profit before tax of £2 million. Since 31 March 2017, Gordon Dadds has traded in line with the Proposed Directors' expectations.

Prospects for the Enlarged Group

The Directors believe that the Enlarged Group has considerable growth and consolidation opportunities in the legal services market in particular, both organically and via selected acquisitions.

11. Directors

Keith Cameron has agreed to resign as a non-executive director of the Company with effect from Admission. Subject to the passing of the Resolutions at the General Meeting, each of the Proposed Directors will be appointed to the Board with Adrian Biles becoming Chief Executive for the Enlarged Group, Christopher Yates becoming the Finance Director for the Enlarged Group and Anthony Edwards becoming its non-executive Chairman. Simon Howard will step down as Chairman but will remain on the Board as a non-executive director of the Enlarged Group.

Brief biographical details of the Existing Directors and the Proposed Directors of Gordon Dadds are set out below.

The current Board is as follows:

Simon Howard Executive Chairman (age 61)

Simon has served as Chairman of the Company since inception and has worked in the UK recruitment industry for over 30 years, 20 of which have been in senior executive roles. In 1988 he was appointed Managing Director, then Chief Executive of Barkers Human Resources. He left the business in 1994 to lead the buy-out of Park Human Resources which was then sold to SHL Group plc in 1997 with Simon becoming an executive director on the main board. He resigned in 1999 and co-founded the Company in 2000. He wrote the weekly 'Jobfile' column on employment issues in The Sunday Times for over 12 years and is a regular contributor to magazines and speaker on recruitment and HR issues.

The Proposed Directors deem Simon to be independent as the Enlarged Group, upon completion of the Acquisition, will fundamentally be a different business to the existing and previous businesses of the Company.

Keith Cameron Non-executive Director (age 70)

Keith has extensive experience as an executive and non-executive director of both public and private companies. He has spent the vast majority of his career in human resources at a number of multinational companies including Union Carbide Inc., Rank Xerox Inc., Levi Strauss Inc., Dixons Group plc, Storehouse plc and between 1998 and 2001 was Chief Operating Officer of The Burton Group plc/Arcadia Group plc. In 2004 he was persuaded by Stuart Rose to return from retirement to take up the position of HR Director at Marks & Spencer plc. Keith previously served as the Independent Director of the Barclays Bank Pension Fund, and was previously a non-executive Director of the Britannia Building Society.

Proposed Directors

Upon Admission, Keith Cameron will resign as a director and the following will be appointed to the Board:

Anthony Edwards, Non-executive Chairman (age 59)

Anthony is a qualified solicitor and a former Managing Partner of Thomas Eggar LLP, a middle market law firm which merged with Irwin Mitchell in December 2015. Anthony retired from Irwin Mitchell in April 2016 having worked at the firm for 37 years. Anthony also serves as non-executive Chairman of Thesis Asset Management plc, a fast growing investment management service provider for private clients, charities, pension funds and trusts. Funds under management at Thesis have grown from £600 million to £12 billion under Anthony's time as Chairman. On 20 June 2017, Regit BidCo Limited announced a recommended cash offer of £47 million for Thesis Asset Management plc.

Adrian Biles, Chief Executive Officer/Managing Partner (age 49)

Adrian qualified as a solicitor at a large City law firm in the early 1990s. He left to go into business in 1994, since when he has been involved in private equity transactions across a number of business sectors, including insurance broking and underwriting, retail motor distribution and property development. Adrian has a record over 25 years of creating significant value for shareholders. He founded ACR Solicitors LLP in 2007 and was responsible for merging the original legal practice of Gordon Dadds into Gordon Dadds LLP in 2013 when he became managing partner and has since overseen the expansion of Gordon Dadds by a combination of acquisitions and organic growth from a £2.7 million turnover business in 2013 to a £25 million turnover business in 2017.

Christopher Yates, Finance Director (age 63)

Christopher is a chartered accountant who has been actively involved in corporate finance for over 30 years. Christopher qualified with Touche Ross & Co. (now part of Deloitte) in 1978 and from 1983 spent nearly 20 years with Credit Lyonnais Securities. He has since been involved with Corporate Finance Partners Limited and has previously been a director of two AIM companies, Pires Investments plc and Kennedy Ventures plc. Christopher chaired the QCA Corporate Governance Committee from 2001 to 2005 and joined Gordon Dadds in 2013.

David Furst, Non-executive Director (age 66)

David is a Chartered Accountant and acted as Gordon Dadds' external accountant and financial adviser for ten years before joining Gordon Dadds LLP's Advisory Board in 2013. Previously, David was a partner in Crowe Clark Whitehill LLP for 30 years and was managing partner and chairman for part of that time. David was President of the Institute of Chartered Accountants in England and Wales 2008-09 and served on its Council for 9 years.

Biographies of key senior management personnel in Gordon Dadds LLP are set out in paragraph 12 of Part 1 of the Admission Document.

12. Principal terms of the Offer

The Company has conditionally offered to acquire the entire issued and to be issued share capital of Gordon Dadds on the following basis: for each Gordon Dadds Share 1.11258 New Ordinary Shares.

The Offer values the whole of Gordon Dadds at £18.8 million.

The Offer is conditional, inter alia, on:

• the passing of the Core Resolutions without amendment; and

• valid acceptances being received (and not withdrawn) by 5.00 p.m. on 3 August 2017 (or such later time(s) and/or date(s) as the Company may, with the consent of the Panel or in accordance with the Takeover Code, decide) in respect of Gordon Dadds Shares which constitute not less than 90 per cent (1) in nominal value of the Gordon Dadds Shares to which the Offer relates; and (2) of the voting rights attached to those shares.

Irrevocable undertakings to accept the Offer, have been received in respect of 10,533,351 Gordon Dadds Shares representing 87.35 per cent. of the Gordon Dadds Shares and, accordingly, the Offer is expected to become unconditional as to acceptances today.

Further details of the terms and conditions of the Offer are set out in paragraph 14 of Part 6 of the Admission Document.

13. Implications of the Acquisition for the purposes of the Takeover Code

The Panel has agreed that 12 of the Gordon Dadds Shareholders, whose names are listed in paragraph 10.1 of Part 6 of the Admission Document, and who together own approximately 87 per cent. of the issued share capital of Gordon Dadds, are a concert party for the purposes of the Acquisition ("Concert Party"). The Concert Party is not currently interested in any Existing Ordinary Shares, but following the completion of the Acquisition and on Admission, the Concert Party's interest will be approximately 41 per cent. of the Enlarged Share Capital by virtue of the issue to them of the Offer Shares.

Pursuant to Rule 9 of the Takeover Code any person who together with persons acting in concert with him is interested in shares which in aggregate carry not less than 30% of the voting rights of a company but does not hold shares carrying more than 50% of such voting rights and such person, and/or any such person acting in concert with him, acquires an interest in any other shares which increases the percentage of shares carrying voting rights in which he is interested, such person or persons acting in concert with him will normally be required to make a general offer to all remaining shareholders to acquire their shares.

Should the Concert Party acquire any further interest in New Ordinary Shares or should any individual member of the Concert Party acquire any interest in New Ordinary Shares such that they are interested in 30 percent. or more of the voting rights of the Company, the Panel may regard this as giving rise to an obligation upon the Concert Party or such individual member of the Concert Party (as the case may be) to make an offer for the entire issued share capital of the Company at a price no less than the highest price paid by the Concert Party or such individual member of the Concert Party in the previous 12 months.

The Company has applied to the Panel for a waiver of Rule 9 in order to permit the Acquisition without triggering an obligation on the part of the Concert Party to make a general offer to Shareholders. The Panel has agreed to waive the obligation of the Concert Party to make a general offer for the entire issued share capital of the Company that would otherwise arise on the issue and allotment of the Offer Shares subject to the passing by independent Shareholders of the Waiver Resolution at the General Meeting.

The Rule 9 Waiver will be invalidated if any purchase of Existing Ordinary Shares is made by any member of the Concert Party or any person acting in concert with any of them in the period between the date of the Admission Document and the General Meeting.

14. The Placing

Arden Partners has conditionally agreed (as agent for the Company) to place 14,285,714 New Ordinary Shares at the Placing Price to raise £20 million before expenses and £17.9 million net of expenses.

The Placing Price (being 4.375 pence on a pre-Consolidation basis) represents a premium of approximately 46% to the closing mid-market price of 3p per Existing Ordinary Share on 16 December 2016, being the last business day prior to the suspension of the Existing Ordinary Shares from trading on AIM, once the effect of the Capital Reorganisation is taken into account.

The Placing is conditional upon:

· the passing of the Core Resolutions at the General Meeting;

· Admission taking place on or before 4 August 2017 (or such later date as Arden Partners and the Company may agree being not later than 31 August 2017); and

· otherwise the Placing Agreement becoming unconditional and not being terminated prior to Admission.

The Placing Shares will be credited as fully paid and will, on Admission rank pari passu in all respects with all other New Ordinary Shares then in issue, including the right to receive all dividends or other distributions declared, paid or made on or after Admission.

A summary of the terms of the Placing Agreement is set out in paragraph 15.1.2 of Part 6 of the Admission Document.

15. Use of the proceeds of the Placing

The Enlarged Group expects to receive gross proceeds of approximately £20 million from the Placing. The net proceeds of the Placing receivable by the Enlarged Group after the costs and expenses of Admission are expected to be approximately £17.9 million and are intended to be used as follows:

· £4 million to repay existing borrowings

· £6 million to be used as cash consideration to fund acquisitions

· £7.9 million to be used as working capital to support the roll-out and integration of acquisitions and maintain a strong balance sheet

The split between funds used as consideration for acquisitions and for working capital purposes may shift depending on the nature and shape of specific acquisitions.

16. Capital Reorganisation

Subject to the passing of the Core Resolutions at the General Meeting, the Capital Reorganisation is expected to take effect at 6pm on 3 August 2017. The Capital Reorganisation will comprise the consolidation of every 32 Existing Ordinary Shares into one share of 64p in nominal value and the immediate sub-division of such shares into one New Ordinary Share and one Deferred Share.

The rights attaching to the New Ordinary Shares will be the same as the rights attaching to the Existing Ordinary Shares and the New Ordinary Shares will be admitting to trading on AIM in place of the Existing Ordinary Shares.

Immediately following the Capital Reorganisation and before Admission, Shareholders will own the same proportion of ordinary shares in the capital of the Company as they did prior to the Capital Reorganisation (subject to fractional entitlements) but will hold fewer New Ordinary Shares than the number of Existing Ordinary Shares currently held.

The Company will issue new share certificates to those Shareholders holding shares in certificated form to take account of the Change of Name and the Capital Reorganisation. Following the issue of new certificates, share certificates in respect of Existing Ordinary Shares will no longer be valid. Shareholders will still be able to trade in New Ordinary Shares using certificates for the Existing Ordinary Shares during the period between the passing of the Resolutions and the date on which Shareholders receive new certificates.

Further details about the Capital Reorganisation are set out in paragraphs 5.2 to 5.6 of Part 6 of the Admission Document.

17. Capital Reduction

The Capital Reduction is intended to eliminate the deficit on the Company's profit and loss account which at 31 December 2016 (the date to which the latest audited financial statements have been prepared) stood at £11,026,000. Since that date the Existing Directors have estimated that additional losses of approximately £250,000 have been incurred. Under UK company law a company may only make distributions to the extent that it has available distributable reserves. Accordingly in order to permit future dividends to be made by the Enlarged Group it is proposed, to:

· cancel the balance standing to the credit of the share premium account of the Company as at 31 December 2016 (being £8,240,000); and

· reduce the issued share capital of the Company by the cancellation of the Deferred Shares created as a result of the Capital Reorganisation.

It is anticipated that the Capital Reduction when combined with the existing special reserve of £2,826,000, will create an aggregate special reserve of £11,388,003.08 which will be available to eliminate the Company's accumulated losses and generate positive distributable reserves (subject to the Court's creditor protection requirements) of up to £112,003. The Capital Reduction requires the approval of Shareholders by special resolution and, under CA 2006, the subsequent confirmation of the Court and registration at Companies House of the relevant Court order, together with a statement of capital.

The Court will require to be satisfied that there is no real likelihood that the Capital Reduction will result in the Company being unable to discharge any debt or claim as it falls due. It is for the Court to determine whether any protection is required for creditors. The Company will put in place such form of creditor protection as the Court may require in order to permit dividends to be paid following the Capital Reduction taking effect. However the Board reserves the right to abandon or discontinue (in whole or in part) the application to the Court in the event that the Board considers that the terms on which the Capital Reduction would be (or would be likely to be) confirmed by the Court would not be in the best interests of the Company and/or the Shareholders as a whole.

If Resolutions 7 and 8 set out in the Notice are passed at the General Meeting, the Directors propose to commence proceedings to obtain the confirmation of the Court to the Capital Reduction as soon as practicable after Admission.

Further details about the Capital Reduction are set out in paragraphs 5.13 to 5.17 of Part 6 of the Admission Document.

18. Change of Name

In view of the change of the business activities of the Enlarged Group it will be proposed at the General Meeting that the name of the Company be changed to Gordon Dadds Group plc.

19. Corporate governance

Companies that are admitted to trading on AIM are not required to comply with the UK Corporate Governance Code. However, the Directors recognise the importance of sound corporate governance and intend to comply with the provisions of the Corporate Governance Code for Small and Mid-size Quoted Companies 2013, published from time to time by the Quoted Companies Alliance, to the extent that they believe it is appropriate in light of the size and stage of development of the Enlarged Group.

The Board will be responsible for the management of the business of the Enlarged Group on behalf of its shareholders. It will set the strategy for and direction of the Enlarged Group and will formulate its policies. It will also be responsible for overseeing the financial performance of the Enlarged Group and monitoring its systems and internal controls.

Board Committees

The Board has established an audit committee ("Audit Committee"), a remuneration committee ("Remuneration Committee") and a nominations committee ("Nominations Committee"). With effect from Admission:

· the Audit Committee will comprise David Furst, Anthony Edwards and Simon Howard and will be chaired by David Furst. The Audit Committee will monitor the quality of the Enlarged Group's internal financial controls, it will review its financial results and financial statements and report on them to the Board; it will also maintain the Enlarged Group's relationship with its auditors and make recommendations to the Board concerning the auditors and fixing their remuneration. The Audit Committee will meet at least three times a year.

· the Remuneration Committee will comprise Anthony Edwards, Simon Howard and David Furst and will be chaired by Anthony Edwards. The Remuneration Committee will review the performance of the executive directors of the Company and determine their terms and conditions of service, including their remuneration and the grant of options. The Remuneration Committee will meet at least twice a year.

· the Nominations Committee will comprise Simon Howard, Anthony Edwards and Adrian Biles and will be chaired by Simon Howard. The Nominations Committee will identify and nominate, for the approval of the Board, candidates to fill Board vacancies as and when they arise. The Nominations Committee will meet at least twice a year.

A summary of the terms of reference for the Audit Committee, the Remuneration Committee and the Nominations Committee is set out in paragraph 16 of Part 6 of the Admission Document.

Share dealing policy

The Company has adopted a share dealing policy for dealings in securities of the Company by directors and certain employees which is appropriate for a company whose shares are traded on AIM. This will constitute the Company's share dealing policy for the purpose of compliance with MAR and the AIM Rules.

20. Relationship Deed

The holding of New Ordinary Shares of Adrian Biles and persons associated with him is expected to comprise 26.6 per cent. of the Enlarged Share Capital on Admission. Accordingly the Company has entered into an agreement with Adrian Biles ("Relationship Deed") to regulate his ongoing relationship (and those of his associates) with the Company; to ensure that the Enlarged Group is capable of operating independently of Adrian Biles and his associates; and to ensure that any transactions or arrangements between Adrian Biles and the Enlarged Group are on arms' length terms and on a normal commercial basis.

The provisions of the Relationship Deed will apply for as long as Adrian Biles and/or his associates hold, in aggregate, an interest in 20 per cent. or more of the issued share capital of the Company.

Further details of the Relationship Deed are contained in paragraph 15.1.4 of Part 6 of the Admission Document.

21. Lock-in and orderly market arrangements

The Company has entered into agreements with Simon Howard, the Proposed Directors and certain of the Gordon Dadds Shareholders ("Locked-in Shareholders") whereby each of the Locked-in Shareholders have agreed not to, and to procure that their associates will not, dispose of any interests in New Ordinary Shares before the first anniversary of Admission; more than 50 per cent. of the Ordinary Shares between the first and the second anniversary of Admission and that until the third anniversary of Admission they will only dispose of their interests in Ordinary Shares on an orderly market basis through the Company's broker for the time being.

In addition the Company has entered into agreements with consultants and employees of Gordon Dadds (other than the Locked-in Shareholders) who hold Gordon Dadds Shares on the date of the Admission Document ("Locked-in Staff") whereby each of the Locked-in Staff have agreed not to, and to procure that their associates will not, dispose of any interests in the Ordinary Shares before the third anniversary of Admission and that until the third anniversary of Admission they will only dispose of their interests in Ordinary Shares on an orderly market basis through the Company's broker for the time being.

Further details of such lock-in agreements can be found in paragraphs 15.1.5 and 15.1.6 of Part 6 of the Admission Document.

22. Dividend policy

The Enlarged Group will be engaged in a significant expansion plan which will be capital intensive. Subject to the needs of that plan, the Directors' current intention is to adopt a progressive dividend policy.

The Directors intend to pay a final dividend for the financial year ending 31 March 2018. Thereafter the Directors expect to pay interim and final dividends in the approximate ratio of 1/3 (interim): 2/3 (final).

23. Regulatory and Compliance

Under the Legal Services Act 2007, there are restrictions on the holding of "restricted interests" in Licensed Body law firms. A "restricted interest" for these purposes includes an interest of 10 per cent or more in the issued share capital of the Licensed Body and includes an interest in the ultimate parent company of the Licensed Body.

Gordon Dadds LLP and Prolegal are currently Licensed Bodies and the SRA has consented to the Company becoming a Licensed Body on Admission.

Your attention is drawn to the Risk Factor headed "Restrictions on holding 10 per cent or more" in Part 2 of the Admission Document for further details of these restrictions.

24. Taxation

Information regarding taxation is set out in paragraph 17 of Part 6 of the Admission Document. This information is intended only as a general guide to the current tax position under UK tax law.

If an investor is in any doubt as to his or her tax position or is subject to tax in a jurisdiction other than the UK, he or she should consult his or her own independent financial adviser immediately.

25. Settlement and dealings

Admission is conditional upon the passing of the Core Resolutions at the General Meeting. Subject thereto, the admission of the Company's Existing Ordinary Shares to trading on AIM will be cancelled and the Enlarged Share Capital will be admitted to trading on AIM.

Admission is expected to take place at 8 a.m. on 4 August 2017.

The New Ordinary Shares are eligible for CREST settlement. CREST is a paperless settlement procedure enabling securities to be evidenced otherwise than by a certificate and transferred otherwise than by a written instrument in accordance with the requirements of CREST. The Articles permit the holding and transfer of New Ordinary Shares to be evidenced in uncertificated form in accordance with the requirements of CREST. Accordingly, following Admission, settlement of transactions in New Ordinary Shares may take place within the CREST system if the relevant Shareholder so wishes. CREST is a voluntary system and Shareholders who wish to receive and retain share certificates will be able to do so.

IMPORTANT NOTICE

This announcement is released by Work Group plc and contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) 596/2014 ("MAR") it is disclosed in accordance with the Company's obligations under Article 17 of MAR.

For the purposes of MAR and Article 2 of Commission Implementing Regulation (EU) 2016/1055, this announcement is being made on behalf of the Company by Simon Howard, Chairman.

No action has been taken by the Company or Arden Partners, or any of their respective affiliates, that would, or which is intended to, permit a public offer of the Placing Shares in any jurisdiction or the possession or distribution of this announcement or any other offering or publicity material relating to the Placing Shares in any jurisdiction where action for that purpose is required. Any failure to comply with these restrictions may constitute a violation of the securities laws of such jurisdictions. Persons into whose possession this announcement comes shall inform themselves about, and observe, such restrictions.

No prospectus has been made available in connection with the matters contained in this announcement and no such prospectus is required (in accordance with the Prospectus Directive (as defined below)) to be published.

THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED HEREIN, IS FOR INFORMATION PURPOSES ONLY, AND IS NOT INTENDED TO AND DOES NOT CONSTITUTE OR FORM PART OF ANY OFFER OR INVITATION TO PURCHASE OR SUBSCRIBE FOR, UNDERWRITE, SELL OR ISSUE OR THE SOLICITATION OF AN OFFER TO PURCHASE OR SUBSCRIBE, SELL, ACQUIRE, DISPOSE OF THE PLACING SHARES OR ANY OTHER SECURITY IN THE UNITED STATES (INCLUDING ITS TERRITORIES AND POSSESSIONS, ANY STATE OF THE UNITED STATES AND THE DISTRICT OF COLUMBIA, COLLECTIVELY THE "UNITED STATES"), AUSTRALIA, CANADA, JAPAN OR SOUTH AFRICA OR IN ANY JURISDICTION IN WHICH, OR TO ANY PERSONS TO WHOM, SUCH OFFERING, SOLICITATION OR SALE WOULD BE UNLAWFUL.

The Placing Shares have not been and will not be registered under the United States Securities Act of 1933, as amended (the "Securities Act") or under the securities laws of any state or other jurisdiction of the United States, and may not be offered, sold or transferred, directly or indirectly, in or into the United States unless registered under the Securities Act or pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and in compliance with applicable state laws. There will be no public offering of the Placing Shares in the United States, the United Kingdom or elsewhere.

The relevant clearances have not been, and nor will they be, obtained from the securities commission of any province or territory of Canada; no prospectus has been lodged with, or registered by, the Australian Securities and Investments Commission or the Japanese Ministry of Finance; and the Placing Shares have not been, and nor will they be, registered under or offered in compliance with the securities laws of any state, province or territory of Canada, Australia, Japan or South Africa. Accordingly, the Placing Shares may not (unless an exemption under the relevant securities laws is applicable) be offered, sold, resold or delivered, directly or indirectly, in or into Canada, Australia, Japan or South Africa or any other jurisdiction outside the United Kingdom or to, or for the account or benefit of any national, resident or citizen of Australia, Japan or South Africa or to any investor located or resident in Canada.

Arden Partners is authorised and regulated in the United Kingdom by the Financial Conduct Authority and is acting exclusively for the Company in connection with the Placing and no one else and will not be responsible to anyone other than the Company for providing the protections afforded to its clients nor for providing advice to any other person in relation to the Placing and/or any other matter referred to in this announcement.

This announcement is being issued by and is the sole responsibility of the Company. No representation or warranty, express or implied, is or will be made as to, or in relation to, and no responsibility or liability is or will be accepted by Arden Partners (apart from the responsibilities or liabilities that may be imposed by the FSMA, as amended, or the regulatory regime established thereunder) or any of their respective affiliates or any of their respective directors, officers, employees, advisers, representatives or shareholders (collectively, "Representatives") for the contents of this announcement, or any other written or oral information made available to or publicly available to any interested party or its advisers, or any other statement made or purported to be made by or on behalf of the Arden Partners or any of their respective affiliates or by any of their respective Representatives in connection with the Company, the Placing Shares or the Placing and any responsibility and liability whether arising in tort, contract or otherwise therefore is expressly disclaimed. Arden Partners and its respective affiliates and each of their respective Representatives accordingly disclaim all and any liability, whether arising in tort, contract or otherwise (save as referred to above) in respect of any statements or other information contained in this announcement and no representation or warranty, express or implied, is made by Arden Partners or any of their respective affiliates or any of their respective Representatives as to the accuracy, fairness, verification, completeness or sufficiency of the information contained in this announcement and nothing in this announcement is, or shall be relied upon as, a promise or representation in this respect, whether as to the past or future.

This announcement does not identify or suggest, or purport to identify or suggest, the risks (direct or indirect) that may be associated with an investment in the Placing Shares. Any investment decision to buy Placing Shares in the Placing must be made solely on the basis of information contained in the Admission Document in connection with the Placing and the proposed re-admission of the Company's ordinary shares to trading on AIM, a market operated by the London Stock Exchange. Copies of the Admission Document are available from the Company's website at www.workgroupplc.com and at www.gordondaddsgroup.com.

This announcement contains (or may contain) certain forward-looking statements, beliefs or opinions, with respect to certain of the Company's current expectations and projections about future prospects, developments, strategies, performance, anticipated events or trends and other matters that are not historical facts. These forward-looking statements, which sometimes use words such as "aim", "anticipate", "believe", "intend", "plan" "estimate", "expect" and words of similar meaning, include all matters that are not historical facts and reflect the directors' beliefs and expectations and involve a number of risks, uncertainties and assumptions that could cause actual results and performance to differ materially from any expected future results or performance expressed or implied by the forward-looking statement, including, but not limited to, those risks and uncertainties described in the risk factors included in the Admission Document. These statements are subject to unknown risks, uncertainties and other factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements. Statements contained in this Announcement regarding past trends or activities should not be taken as a representation that such trends or activities will continue in the future. The information contained in this announcement is subject to change without notice and, except as required by applicable law, neither the Company nor Arden Partners nor any of their respective affiliates nor any of their respective Representatives assumes any responsibility or obligation to update, amend or revise publicly or review any of the forward-looking statements contained in this announcement. You should not place undue reliance on forward-looking statements, which speak only as of the date of this announcement. Any indication in this announcement of the price at which Placing Shares have been bought or sold in the past cannot be relied upon as a guide to future performance. No statement in this announcement is or is intended to be a profit forecast or profit estimate or to imply that the earnings of the Company for the current or future financial years will necessarily match or exceed the historical or published earnings of the Company. Past performance of the Company cannot be relied on as a guide to future performance and persons reading this announcement are cautioned not to place undue reliance on such forward-looking statements.

The Placing Shares to be issued pursuant to the Placing will not be admitted to trading on any stock exchange other than the AIM market operated by the London Stock Exchange.

Neither the content of the Company's website nor any website accessible by hyperlinks on the Company's website is incorporated in, or forms part of, this announcement.