Preliminary Results

15th February 2012

ELECTRIC WORD PLC

Preliminary Results to 30 November 2011

Electric Word, the specialist media company, announced today audited results for the year ended 30 November 2011.

Julian Turner, Chief Executive of Electric Word, commented:

"2011 has been a transitional year for Electric Word. The Group has undergone significant change and made strategic progress in challenging market conditions.

The Group is now focused around three key markets and has a strong platform in each of these markets to build upon in the coming year. We have developed new products and services to position us well for future growth and look forward to the many opportunities for the Group ahead."

* Adjusted numbers, as set out in note 5, exclude amortisation and impairment of goodwill and intangible assets, acquisition-related and restructuring costs, and share based payment costs, as well as the tax impact of those adjusting items and any non-cash tax credits and charges (which relate to movements on deferred tax such as the use of tax losses or tax credits from the recognition of tax losses).

† Adjusted conversion excludes non-trading payments such as working capital injections into acquired businesses and restructuring or acquisition-related costs as paid and is set out in the Operating and Financial Review. Debt includes bank overdrafts and loans, but excludes deferred and contingent consideration.

In accordance with AIM Rule 19, the audited report and accounts of the Company for the year ended 30 November 2011 have been posted to the Company's website at www.electricwordplc.com. The printed version, together with details of the Annual General Meeting, will be posted to shareholders in due course.

ENDS

Enquiries:

Notes to Editors

Electric Word plc is a specialist media company operating in attractive and information-hungry markets, providing information in a wide range of formats through three divisions in 2011:

·; Professional:provides professional development, compliance and other resources to the public sector through professional communities in education and healthcare, including school leaders and managers, teachers, special needs and speech therapy professionals, and General Practitioners and practice managers - primarily in the UK.

·; Business information: provides insight and analysis across the business of sport (for international sports federations, brands and sponsors, broadcasters and media, major event organisers), and the global online gaming industry, for both the affiliates that market the gaming sites and the industry itself.

·; Specialist consumer: provides high-quality content, mainly online, in sport and health, aimed at competitive athletes and coaches and sports injury professionals, and in education, providing information for parents to support their children's schooling and development.

The range of products and services offered to these communities include subscription websites, journals, magazines, events, training, books, special reports and research and consultancy. We aim to go beyond being an information provider and support our customers in achieving their key objectives through higher-value advice, compliance reporting, professional development and critical data.

CHAIRMAN'S STATEMENT

2011 has been a transitional year in which the Group has implemented significant change and made strategic progress against a challenging background.

Despite the year going beyond even our own expectations in the degree of difficulty faced by the public sector markets, the Group remained profitable at a trading level*, operationally cash generative and further paid down debt. This was achieved at the same time as making a number of investments in new businesses, products and systems.

The year ends with the Group stronger, leaner and reorganised around three key markets: Health, Education, and Sport & Gaming, each with the potential for further growth and scale.

In late 2010 and through 2011 the Group started to bring together a portfolio of professional education and compliance products aimed at the Health sector. This exciting new development comes as Health services are moving into a period of profound change, including new compulsory continuing educational standards and structural decentralisation. We see Health as a sound strategic fit with our existing Education activities as the businesses share skills and experiences in two fast-changing but connected markets where reliable information can be vital.

The Business Information division saw profit margins* climb to 28%. This was driven by the strength of our brands in the sport and online gaming sectors combined with a receptive market and an increased investment in the division. An important part of that was the buyout of its contract partner in the gaming affiliate marketing events which helped simplify the management of that business and demonstrate its underlying margin. The acquisition has already returned 37% of the acquisition price in its first year.

The Education sector has been suffering from funding uncertainty and therefore reduced confidence since the middle of 2010. In that environment it has of course been important for the management to trim costs and remove unprofitable activity wherever possible through the downturn. That process was started in 2009-10 and has continued into this year but it has been accompanied by some more profound changes to the cost structure of the business as digital migration accelerates and we reduce our exposure to lower-value product areas and carry less physical stock. This has been accompanied by some prudent write-downs in our Education assets which, though disappointing, leave the Group's Education business clearly focused on its key growth opportunities: the new online subscription service for schools which launched in January 2012 and the conferences business which now appears to be stabilising and to which we are now adding new in-school training products.

It is encouraging to see the Group emerging from this year having learnt so much about itself and its markets. The sense now is of a stronger and more focused business with good market positions and a platform to support future growth in each of our market sectors. Increasingly, that growth is coming from products and services that go beyond providing important information and help our customers achieve key objectives for themselves and their organisations. As we emerge from a difficult year, the Group can reflect on much that has been achieved in laying the foundations of the future and look forward to many new opportunities ahead.

Peter Rigby

Chairman

14 February 2012

CHIEF EXECUTIVE'S STATEMENT

Strategic overview

The Group is a specialist media business targeting information hungry markets. We provide content in many different formats and the Group's diversity has enabled it to develop competencies in one sector which can then be transferred to another as opportunities arise.

Our approach is to identify a niche community within our market sectors, say a managerial role within a school or a commercial director responsible for sports rights, and fulfil their key information, best practice and compliance needs. Increasingly, our aim is to provide higher-value services that help our customers to achieve their key personal and organisational objectives.

Divisional review

Professional division

The division provides specialist management and professional development information for school teachers, general practitioners and other professionals working in schools and primary health care.

Year of investment in Education and Health as new market opportunities emerge

Revenue was down by 17% on an organic basis on the prior year as the severe slowdown in spending in these markets from midway through last year showed only limited signs of relenting. Optimus Education has used this period of slower sales to redevelop its education portfolio to be ready for the market returning to normality. There is now some evidence that the market is starting to be more confident about future funding and receptive to products which support the continued trend away from centrally-provided support. This creates a good opportunity to rebuild profits as the need for information and professional development support is greater than ever at a time of significant structural change and further devolution of management control to schools. Over the next two to three years there is a significant opportunity for the Group to increase its share of the professional development market in schools as the new generation of products that have been developed gain traction.

Profits have suffered more than revenues here through a number of factors. First, the education business lost high-margin, incremental subscribers and delegates year on year. The first half of 2010 saw record event profits with events front-loaded into the first half of the year before the May election, and several record attendances exacerbated this effect. 2010 margins were further boosted by the cost reductions enacted ahead of the expected downturn, while the revenue impact affected the second half of 2010 only. Marketing spend has been maintained in 2011, particularly for events and the key subscriptions products, and that activity generated less revenue per pound spent than previously, while still bringing a positive return. Finally, content investment has been deepened for the online transition and to cover the change happening in the sector.

Costs and marginal product have again been cut out this year where appropriate but not at the expense of market position or future profits or prospects. Two significant product changes have taken place.

The first is where Optimus has over the last three years been investing heavily into building a school management and professional development booklist with the objective of repeating the high recurring profit margins earned by Speechmark's equivalent list. With the fast pace of change and further fragmentation of the Education system, we found that many books in a previously successful large-scale, high-price format were too slow and costly to produce and the professional development and training value they contained was not sufficiently apparent to customers. Much of the content that would previously have appeared in book format is now being redeveloped either as part of our enhanced subscriber websites or as new products specifically designed for in-school training, with the option of being self-delivered or by an expert trainer. As a result the back list of printed books has been heavily provided against this year as the division focuses on more profitable and appropriate formats.

The second significant product change is the launch in January 2012 of the Optimus online subscription service. This replaces the old fourteen role-specific paper newsletters with seven broader sites which include the news and case studies from the relevant newsletters but add new areas of essential content that is continuously updated as requirements change, improved search and the facility for schools to get particular questions about areas of concern answered by expert panellists. Access to the sites will be sold in packages and a school taking all seven will get comprehensive support for the key managerial roles.

In Health, the acquisitions of Radcliffe and Ikonami (rebranded Radcliffe Solutions) have performed in line with expectations and achieved margins of 15% in their first year. Much organic growth opportunity exists in these two businesses, which now share the Radcliffe name. Radcliffe's respected journals and books provide both academic rigour and exam support in medical education and a wide range of other professional development books. The new Radcliffe Solutions business provides software to enable NHS trusts to manage and report on their compliance obligations in staff training as well as supporting other strategic workforce initiatives. The objective in 2012 is to integrate the businesses operationally, ensure product development and marketing investments are aligned, and start to take advantage of the online platform investment in other parts of the business to develop new digital products. To date all businesses have been moved into the Group's two properties and moved onto the Group's back office services and systems.

2012 looks set to be a busy and exciting year with so much change in the market and new opportunities to build on the platforms created in 2011. There is every reason to expect the Education division, over time, to rebuild its profits to previous levels and in the Health sector the Group is developing an opportunity that could prove at least as significant.

Business information division

The division is an international provider of business insight and analysis for the sports and online gaming sectors, with skills and experience across a range of media from online subscriptions to live events and from daily news to bespoke research.

Profits up 60% as organic revenue grows 7% and contract buyout boosts margin to 28%

The division grew revenue by 7% year on year, largely as a result of the continued success and expansion of its events aimed at affiliates in the online gaming market but aided by many successes across both sectors within the Division. The affiliate events and publishing business, which operates under the iGB Affiliate brand, had been involved in a marketing arrangement with a business partner who helped the initial establishment of this successful business and has since received fees based on the profits of the business. In January 2011 this partner was bought out of their rights and obligations under the joint venture agreement and fees previously paid to the partner will now remain within the Group, with effect from December 2010. The Division's profit has grown by 60% in the year with 14% of that organic and the remainder coming from the contract buyout.

Advertising and sponsorship remain robust across the Division while it continues to mine the unique opportunities presented by its strong positions in both sectors. In gaming, the success of the events has been supplemented by growth in information sales, both in subscriptions and reports. In sport, the unique blend of market knowledge from its leading publications, notably Sports Business International and TV Sports Markets, and its skills as a communications partner has allowed the team to win several contracts to help organisations promote themselves within the world of sport, whether through magazines, online publications or events.

The migration over the last two years of TV Sports Markets from a traditional newsletter into a higher-value online subscription continues to be a success, both in customer feedback and the growing revenue base. Its format of reporting, insight, data analysis and online accessibility is now being mirrored with the launch at the end of the year of Sports Markets Frontiers, an equivalent product for the sponsorship market. Digitalisation has continued into 2012 with site-licensed versions of top-selling reports and a new TV Sports Markets app in January 2012. Meanwhile changes in the regulatory environment are starting to open new opportunities for iGaming Business in the USA which will become an important focus in 2012.

Specialist consumer division

This division operates in two niche consumer markets which are complementary to its Professional division:

·; competitive sports athletes and coaches and related injury professionals (Sports Performance); and

·; helping parents to support their children's educational development (The School Run, formerly My Child).

The division is principally online focussed with significant active web communities already being serviced.

Sports Performance grew profits in the year and has the potential to develop valuable synergies with Radcliffe's Health publishing with its professional development support for individual sports coaches (through Peak Performance) and physiotherapists (through Sports Injury Bulletin). Both websites are expected to benefit from rolling out the Group's new online platform in 2012.

The School Run in particular suffered in 2011 from changes in the algorithms Google uses to run searches in order to try and avoid commercialisation of those results. This has slowed down the progress to profitability for The School Run, which was expecting to continue the high level of subscriber growth it achieved in 2010. As a result, its goodwill has been fully impaired this year.

Central costs

These costs represent central PLC costs which are not directly related to the divisional trading and are not therefore included in their results. They include Board fees and costs related to being both a PLC and a consolidated Group.

The Group has again kept its central costs at 5% of Group revenues. These costs have not increased for the Health acquisitions late in 2010 and in 2011.

Net interest payable has increased this year despite the decrease in the Group's debt as the Bank loan was renewed in January 2011 but at higher terms in line with the market. In addition the Group is suffering notional interest (an accounting charge for the time value of money where no interest is actually inherent) on the contingent consideration related to the Ikonami acquisition in April 2011. This notional (non-cash) interest came to £17,000 in the year.

Julian Turner

Chief Executive

14 February 2012

OPERATING AND FINANCIAL REVIEW

Adjusted numbers to reflect underlying trading performance

* A reconciliation of the adjusted numbers is set out in note 5. The adjusted numbers are presented to allow shareholders to gain a further understanding of the trading performance of the Group. Profits are adjusted for items not perceived by management to be part of the underlying trends in the business and the related tax effect of those items together with removing the profit impact of movements in deferred tax balances.

Operating segments

The Group evolved significantly in 2011 and to reflect its new focus has reorganised its management and reporting around three market-facing divisions: Education, Health and Sport & Gaming. Having completed this reorganisation, 2012 reporting will reflect the new structure.

Restructuring costs and impairment charges

As part of this restructure, and in line with the strategy of focusing on higher-value activities, the Group has reviewed areas of weak strategic fit and greatest profit risk in the current market conditions. Consequently, the Group has remodelled its Education management portfolio, impairing its books list while repurposing relevant content in a new in-school training format. The Group has also reduced its exposure to commerce and consumer products in the Education market. These changes have resulted in a number of redundancies being made.

A significant part of this action has been to serve notice on the Group's secondary property in Milton Keynes and take a lease on a much smaller office-only property. This has been made possible by outsourcing the warehousing and fulfilment functions for the Professional division businesses. This is anticipated to save over £0.1m from the Group's future annual costs as well as converting a significant fixed cost into a variable one which is more appropriate for a changing market and a likely shift towards digital delivery over the next several years.

Impairment charges have been booked to completely write down two acquired assets this year at a total charge of £3.6m (note 11). The schools catalogue business of Incentive Plus was acquired in 2006 and has been profitable at adjusted EBITA* throughout, but recently only through stringent cost reductions as revenue has suffered. My Child (subsequently renamed The School Run) was acquired in 2007. This parent-focused website has grown more slowly than expected and has now been fully impaired.

Further to the impairment charges, £151,000 has been booked as a reduction in goodwill upon recognition of deferred tax asset relating to pre-acquisition losses from the SportBusiness Group. The recognition of more of the historic SportBusiness losses is a positive sign of the on-going value and profits generated by that business.

Capital expenditure

The Group has invested over £0.5m across web development and systems in the year together with initial spend on the Milton Keynes relocation. A full web development team of project and content manager and front and back end developers was recruited in 2010 and has thus been employed throughout this financial year improving the functionality of both the sites and the email marketing channel, as well as working on the new online platforms for the education team's former print subscription offerings to migrate onto in January 2012. The Group has also invested in a new CRM system across its Business Information sales force and replaced the SOP system used across its subscription and other products with a newer and more robust system better suited for more sophisticated sales packages and the combination of print and online subscriptions.

Acquisitions

Further to completing the acquisition of Radcliffe Publishing Limited at the end of November 2010, two acquisitions have been made in the 2011 financial year. In January 2011 the Group bought out for £1.05m its partner (Affiliate Media, Inc) from the equivalent of a profit share arrangement across our iGaming Affiliate publishing and event business. This acquisition was paid in full at that time.

In April 2011 the acquisition of Ikonami Limited (subsequently rebranded Radcliffe Solutions) was completed for an initial outlay of £65,000 with deferred consideration of £86,000 payable in equal instalments over 12 months and £150,000 payable in January 2013. There is also contingent consideration payable based on the results of the 2013 financial year which is currently provided at £550,000 but subject to a maximum payable of £1.85m. The Board considers the likelihood of the maximum payment to be remote.

Debt and cash flow

Net bank debt (note 27) at the end of the year stood at £0.8m (2010: net funds of £0.6m).

The net funds at the end of the previous year followed a placing in November 2010 which raised funds in advance of the expected acquisition completion in January 2011 for £1.05m. The Group has subsequently made one further acquisition and the capital expenditure investment as above.

When the impact of the acquisitions is added back, the underlying cash generation from operations has remained sound given that the business remains in a period of investment in future organic growth. Both the Radcliffe Publishing and Ikonami acquisitions added considerable payables into this year which have been subsequently been cleared down to normal trading levels. The following table adds back non-recurring cash flows to reflect adjusted operating cash against the adjusted profits on a more comparable basis.

The Group has gross Bank debt (note 18) of £1.1m at November 2011 (2010: £1.5m) which is less than the adjusted EBITDA* achieved in 2011 and is being repaid over four years ending November 2014. Further to this the Group has deferred and contingent consideration relating to two of its recent acquisitions (note 21). The current significant provisions are for £150,000 payable January 2013, £257,000 payable based on November 2012 results, and £550,000 payable based on November 2013 results.

Earnings per share

Statutory diluted earnings per share ("eps") is down on prior year at (1.51)p loss (2010: 0.19p earnings). On an adjusted basis reflecting underlying trading earnings are down at 0.24p (2010: 0.58p).

The Group placed 61,309,331 shares in November 2010 to fund the acquisition of Radcliffe Publishing in November 2010 and the buyout of its iGaming affiliate partner from a profit share contract in January 2011which only counted on the weighted average number of shares basis (as used for eps) for less than a month of the 2010 year, and thus counts significantly to the marked decline. The acquisitions themselves are profits enhancing so did not dilute.

Dividends

At this stage of the Group's evolvement, the Directors do not propose a dividend this year (2010: £nil). The Group has not paid a dividend in previous years but will continue to evaluate its position.

Quentin Brocklebank

Finance Director

14 February 2012

CONSOLIDATED INCOME STATEMENT

For the year ended 30 November 2011

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

For the year ended 30 November 2011

CONSOLIDATED GROUP AND COMPANY STATEMENTS OF CHANGES IN EQUITY

For the year ended 30 November 2011

CONSOLIDATED GROUP AND COMPANY STATEMENTS OF FINANCIAL POSITION

As at 30 November 2011

These financial statements were approved by the Board of Directors and authorised for issue on 14 February 2012 and are signed on its behalf by:

Julian Turner Quentin Brocklebank

Chief Executive Finance Director

CONSOLIDATED AND COMPANY CASH FLOW STATEMENT

For the year ended 30 November 2011

NOTES TO THE FINANCIAL STATEMENTS

For the year ended 30 November 2011

1. ACCOUNTING POLICIES

BASIS OF ACCOUNTING

The financial statements have been prepared in accordance with International Financial Reporting Standards as endorsed by the European Union ("IFRS"), IFRIC interpretations and the Companies Act 2006 applicable to companies reporting under IFRS.

The financial statements of the Group and the Parent Company have been prepared under the historical cost convention and in accordance with applicable accounting standards. As permitted by Section 408 of the Companies Act 2006, no separate profit and loss account is presented for the Company. The Company's loss for the year was £2,770,000 (2010: £32,000 loss).

Operating profit is defined as profit before tax but excluding finance costs and investment income.

GOING CONCERN

The Group has a net current liabilities position at 30 November 2011 at £1,903,000 (2010: £386,000). The directors have prepared group cash flow forecasts for the period ending 30 November 2013. These forecasts indicate that the group will continue to meet its liabilities and bank debt requirements as they fall due for the foreseeable future. The business is currently trading in line with these forecasts. In the event of forecast trading levels not being met due to a weaker economic climate than forecast, the directors have the scope to take further actions, to enable the group to meet its liabilities as they fall due for the foreseeable future and for it to remain within its financial covenants. There is long-term financing in place with the Group's bank debt converted in January 2011 to a term loan with repayments over the period to November 2014 (note 18). The Group continues to maintain positive cash flows excluding acquisition spend.  On this basis the directors believe that it remains appropriate to prepare the financial statements on a going concern basis.

Changes in accounting policies

There have been no changes to accounting policies in the period.

CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS

Within the consolidated and company financial statements there are a number of areas where management has to include their best estimate of likely outcomes based on their first hand knowledge of the markets and situation. The preparation of consolidated and company financial statements will require management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results may differ from these estimates.

In preparing these consolidated and company financial statements, the significant judgements made by management in applying the accounting policies and the key sources of estimation uncertainty were:

·; Valuation and asset lives of intangible assets - which are based on management's considered opinion of what has been bought and what value it is to the Group in the future. Valuation methodologies include the use of discounted cash flows, revenue and profit multiples, whilst asset lives are estimated on the type of asset acquired and range between three and ten years;

·; Impairment of assets - assets are subject to at least annual impairment reviews and testing, and the running of these tests and the numbers that form part of them will be based as far as possible on actual known results but will by nature include predictions of future outcomes. The asset carrying values are compared to estimates of the assets' value in use. This value in use is calculated by looking at the cash generating units underlying the assets and management estimating the future cash flows after applying a suitable discount factor. The estimates of future cash flows are based on detailed forecasts produced by management. Assumptions on the goodwill assets are given in note 11;

·; Provisioning: both trade receivables for bad debt and inventories for returns and obsolescence are reviewed for potential write down. The provisions created to cover these areas are based on managements' experience and considered opinion of the assets' current value;

·; Contingent consideration: provisions are made at the directors' best estimate of what the consideration will be but as based on future results it can only be assessed on current knowledge and expectations with no certainty. The provisions made are considerably under the maximum amounts which could be payable (note 21);

·; Valuation of share based payments - which are calculated from modelling including estimates of non-transferability, exercise restrictions, and behavioural considerations, including such factors as the volatility of the Company's share price. These inputs and the methods are set out in note 28.

An analysis of the Group's income is as follows:

Segmental information is presented in respect of the Group's business divisions. This format is based on the Group's management and internal reporting structure, as seen by the Board in its financial information used in allocating resources and making strategic decisions. These segments were identified by how the Group is focused on customer types and so does involve some aggregation of how those customers are served and of diversity within the customer bandings as niches are targeted within the broader markets.

The format consists of three market sectors and a central function:

·; Professional (P): serving professional communities in schools, primary health care and other institutions with management information and professional development;

·; Business Information (BI): for the business communities behind sport and on-line gaming;

·; Specialist Consumer (SC): advice and instruction for individuals' needs in both sport -competitive athletes and coaches - and education - parents looking to support their children's schooling and development; and

·; Central costs (PLC): the group function represents central PLC costs which are not directly related to the sector trading and are not recharged. Finance costs and investment income are also included here as these are driven by central policy which manages the cash positions across the Group.

Operating profit is defined in note 1. The sector analysis includes the adjusted definition of operating profit (note 5) to allow shareholders to gain a further understanding of the trading performance of the Group and is considered by the Board alongside operating profit and profit before tax to assess performance and review strategy.

The average monthly number of persons (including directors) employed by the Group during the year, analysed by category, was as follows:

This remuneration is included in other operating expenses except for £207,000 (2010: £159,000) included in cost of sales - direct costs, £106,000 (2010: £81,000) included in cost of sales - marketing expenses, £171,000 (2010: £nil) included in restructuring costs, £167,000 (2010: £nil) included in goodwill as accrued in acquisition entities' balance sheets prior to completion, £63,000 (2010: £88,000) capitalised in the inventory for book development and £273,000 (2010: £145,000) capitalised in the tangible fixed asset for web site development.

The adjusted profits have been prepared to allow shareholders to gain a further understanding of the trading performance of the Group. Profits are adjusted for items not perceived by management to be part of the underlying trends in the business and the related tax effect of those items. The adjustments add back items which have no cash impact or are not trade related and of a non-recurring type.

Adjusted numbers exclude amortisation and impairment of goodwill and intangible assets, restructuring and acquisition-related costs, and share based payment costs, as well as the tax impact of those adjusting items and any non-cash tax charges. Non-cash tax charges relate to movements on deferred tax such as the use of tax losses or tax credits from the recognition of tax losses

The Group has restructured its business in 2011 in response to the continued market difficulties in the education sector, removing redundant staff positions and significantly scaling back its education book list. Also, a lease break clause has been activated on its second property where the inventory was stored and fulfilled and the decision taken to outsource those functions. The restructuring costs of £1,259,000 (2010:£138,000) include provision against inventory of £899,000 (2010:£138,000), which followed the various policy changes and market shifts making some redundant and many non-core, and restructuring costs of £360,000 (2010:£nil) which relate to staff redundancies and the outsourcing of the Group's inventory together with relocating the remaining staff to a smaller office only premises.

The acquisition-related costs totalling £36,000 (2010: £231,000) relate to the acquisitions of the entire share capitals of Ikonami Limited in April 2011 and of Radcliffe Publishing Limited in November 2010 together with the buy-out of a contract partner in the Group's gaming sector in January 2011 (2010: Radcliffe Publishing Limited in November 2010), as disclosed in note 26. The costs included here in relation to these deals include stamp duty, Bank approval charges and professional advisory fees but are shown net of monies received back from the vendors of Radcliffe Publishing Limited which were not provided last year on acquisition (note 26).

The 2011 and 2010 restructuring and acquisition-related costs (gross of the monies received back from the vendors) were considered to be taxable items for corporation tax and thus attributable tax has been included in the period at 27% (2010: 28%) of their value. All other adjusting items do not have a tax affect on the Group.

Other operating expenses as disclosed on the face of the income statement include staff costs (note 4) of £4,735,000 (2010: £4,062,000) and premises costs of £519,000 (2010: £406,000).

The goodwill from acquisitions were impaired by £3,600,000 (2010: £nil) as detailed in note 11 but intangible assets from acquisitions were not impaired (2010: £nil) as detailed in note 12. The goodwill has also been reduced by recognition of tax losses pre-dating acquisition of the entity by the Group by an amount of £151,000 (2010: £nil).

UK corporation tax is calculated at 26.7% as 28% for the first four months of the financial year and then 26% for the remainder (2010: 28% all through the financial year) of the estimated assessable profit for the year. Taxation for other jurisdictions is calculated at the rates prevailing in the relevant jurisdictions.

The Finance (No. 2) Act 2010 included legislation to reduce the main rate of corporation tax from 28% to 26% from 1 April 2011. The March 2011 UK Budget Statement announced a number of further changes to the UK corporation tax system. Legislation is expected to reduce the main rate of corporation tax to 23% by 1% per annum over a period of 3 years from 2012 to 2014. Of these further changes only the reduction to 25% had been substantially enacted at the balance sheet date and is therefore included in these financial statements and reflected in the above table as an adjustment to prior year deferred tax. The further expected reductions will reduce the company's future current tax charge if enacted.

The total tax charge can be reconciled to the accounting profit as follows:

The calculation of earnings per ordinary share is based on the following: