RNS Number:6281R
Penna Consulting PLC
04 November 2003

                   PENNA CONSULTING ANNOUNCES INTERIM RESULTS


Penna Consulting Plc (PNA), the human capital management consulting group, today
announces its interim results for the six months ended 30 September 2003.


Half Year Results

  * Group turnover: #21.1 (2002: #22.3m)
  * Profit before tax and goodwill: #0.8m (2002: #1.3m)
  * Loss before tax: #2.6m  (2002: #6.2m)
  * Diluted earnings per share before goodwill 3.1p (5.1p)
  * Interim dividend held at 2002 level: 1.5p (2002:1.5p)
  * Costs lower than first half of last year
  * Career Consulting revenues reduced faster than expected
  * Improving Recruitment performance
  * Market for Change Consulting remains uncertain


Commenting on the results, Suzie Mumme, Chairman said:

"As in previous years we expect our second half to be stronger than the first as
our clients' demands remain biased towards the latter half of our financial
year. Whilst our Career Consulting practice continues to win clients and
maintains it's strong position and market share, the rate of any further
reduction in revenues remains uncertain.  We will continue to manage our cost
base in line with market demand and expect our smaller Resourcing and Change
businesses to move into profit in the second half."


Notes to Editors

Penna Consulting

Penna Consulting is among the leading providers of human capital management. It
has over 300 employees and 400 associates in 40 offices across the UK, France,
Ireland, Germany, Norway and Sweden. It has a further 115 partner offices
covering 27 countries around the world. Penna serves over 5000 clients, 75 of
which are in the FTSE 100. More information can be found on the web site at
www.e-penna.com.

Its integrated services cover the end to end employment cycle from sourcing
talent through performance enhancement to redirection.

Blue chip clients include:

* Cable & Wireless
* JP Morgan
* Astra Zeneca
* Goldman Sachs
* Barclays
* Royal Bank of Scotland
* Central Government



Chairman's Statement

The reduction in revenues in Career Consulting, the largest part of our business
has adversely impacted Penna Consulting's results in the first half.

We are pleased at the improvement in our recruitment activities and expect to
see further improvements over the next twelve months. The market for our change
activities remains difficult although our actions to reduce costs have improved
profitability in this area.


RESULTS

Turnover for the six months ended 30 September 2003 was #21.1m (2002: #22.3m).
Profit before tax and goodwill amortisation in the period was #0.8m (2002:
#1.3m).  The benefit from the cost reductions we made in the year ended 31 March
2003 is reflected in a level of fixed costs which are 8% lower than in the first
half of last year.

Diluted EPS before goodwill amortisation decreased to 3.1p per share (2002:
5.1p).  The Board has maintained the interim dividend of 1.5p (2002: 1.5p)
payable on 12 January 2004 to shareholders on the register at close of business
on 12 December 2003.  Penna Consulting had net debt of #0.2m at 30 September
2003 (2002: net cash of #0.8m) in addition to a restricted deposit account of
#3.6m that guarantees loan liabilities of an equal amount.

In accordance with FRS 11 we have looked carefully at the carrying value of the
goodwill attributed to acquisitions made since 1998.  We have reviewed the
valuation of these businesses in line with current market conditions and have
recognised a goodwill impairment charge of #2.8m.


CAREER CONSULTING

Revenues for our Career Consulting services have returned to the more normal
levels of three years ago.  Turnover at #13.7m was #3.2m lower than last year.
We had anticipated a decline in revenues (but in the second half) and adjusted
our cost base.  The benefit of this will have greater impact on the results over
the next six months.

Demand from our banking clients has fallen since the start of the year and we
reduced our costs by exiting our short-term additional City space in July. Since
May, demand in the City for Career Consulting services has remained flat.
Across the remainder of our regions it was in the summer that demand dropped
considerably, several months before we anticipated.

We have, however, maintained our market share, seen increased demand for our
talent management services and continue to win clients. Organisations recognise
the benefit of our Career Consulting services but are reducing the number of
people they are letting go.  Having said that, we are delighted to have recently
been awarded a further five contracts with major clients. Each of these
contracts will span more than one year and each is expected to produce revenues
in excess of #1m.

We continue to invest in order to provide support for, most notably, our Career
Consulting business especially in the technology needed to deliver the services
our clients expect and which ensures that our service remains competitive.  This
is a significant cost which is more than #1.5m higher than in earlier years.  We
are not yet seeing all the benefits anticipated from this investment in new
services.


RESOURCING

Despite the recruitment market showing little improvement through the period our
turnover increased to #5.0m (2002: #3.0m) on which we broke even (2002: #0.6m
loss).  This improvement has arisen through our strategy to expand our
capability across more sectors and by widening our resourcing services.  For
example our public sector revenues have increased from #0.2m to #0.9m and our
interim management business is now 52% higher than the same time last year.

However we have not seen sufficient improvement in our resourcing solutions
activities to maintain the level of goodwill the group is carrying and
accordingly we have recognised an impairment charge of #2.8m at 30 September
2003.


CHANGE CONSULTING

The first half of the financial year is traditionally the weaker period for our
change consulting business. Turnover of #2.6m  (2002: #2.8m) was at similar
levels to last year but the cost savings we made during the latter part of last
year have meant that we incurred a small loss of #0.1m compared with a loss of
#1.0m in the first half of last year.

Our Change Consulting services include HR strategy, change programme management,
employee communication, assessment and executive development and coaching.  We
have recently launched several new services including talent audit, performance
coaching and employee engagement surveys and there is growing evidence that our
clients are buying more than one of these services from us.


BOARD CHANGES AND FUTURE PROSPECTS

It was announced last week that Michael Jolly had resigned from the Board and
that Suzie Mumme would be assuming the Chief Executive's responsibilities on an
interim basis.  Whilst the Board is still enthusiastic about the Company's
underlying strategy to build an integrated human capital management business, we
will be reviewing the operating model over the coming months.

As in previous years we expect our second half to be stronger than the first as
our clients' demands remain biased towards the latter half of our financial
year. Whilst our Career Consulting practice continues to win clients and
maintains it's strong position and market share, the rate of any further
reduction in revenues remains uncertain.  We will continue to manage our cost
base in line with market demand and expect our smaller Resourcing and Change
businesses to move into profit in the second half.


Suzie Mumme
Chairman
4 November 2003


GROUP PROFIT AND LOSS ACCOUNT 
For the six months to 30 September 2003 
         

                                                                                                                      
                                                                           6 months to     6 months to     Year to 31 
                                                                          30 Sept 2003    30 Sept 2002       Mar 2003 
                                                                 Notes       Unaudited       Unaudited        Audited 
                                                                                                                      
                                                                                 #'000           #'000          #'000 
                                                                                                                      
  TURNOVER                                                           3          21,090          22,274         48,782 
                                                                                                                      
  Operating costs before goodwill amortisation                                (20,242)        (27,587)       (46,729) 
  Amortisation and impairment of goodwill                                      (3,362)          ( 793)        (7,467) 
                                                                                                                      
  OPERATING LOSS                                                     3        (2,514)          (6,106)        (5,414) 
  Share of operating (loss)/profit of associate                      4           (16)               -              23 
                                                                                                                      
  GROUP OPERATING LOSS                                                         (2,530)         (6,106)        (5,391) 
  Net interest payable                                                            (34)            (99)           (82) 
                                                                                                                      
  LOSS ON ORDINARY ACTIVITIES BEFORE TAXATION                                  (2,564)         (6,205)        (5,473) 
  Taxation on profit on ordinary activities                                      (256)           (185)        (1,185) 
                                                                                                                      
                                                                                                                      
  LOSS ON ORDINARY ACTIVITIES AFTER TAXATION                                   (2,820)         (6,390)        (6,658) 
                                                                                                                      
  Dividends                                                          5          (270)            (271)          (655) 
                                                                                                                      
  RETAINED LOSS FOR THE PERIOD                                                 (3,090)         (6,661)       (7,313)  
                                                                                                                      
  (LOSS )/EARNINGS PER SHARE                                         6                                                
  Basic                                                                                                               
  After amortisation of goodwill                                               (15.6)p         (35.5)p        (37.0)p 
  Before amortisation of goodwill                                                 3.2p         (31.1)p           4.7p 
  Diluted                                                                                                             
  After amortisation of goodwill                                               (15.6)p         (35.5)p        (37.0)p 
  Before amortisation of goodwill                                                 3.1p         (31.1)p           4.5p 
                                                                                                                      
                                                                                                                      
                                                                                                                      
  Consolidated statement of total recognised gains and losses                                                         
  For the six months to 30 September 2003                                                                             
                                                                                                                      
                                                                           6 months to     6 months to       Year to  
                                                                          30 Sept 2003    30 Sept 2002    31 Mar 2003 
                                                                             Unaudited       Unaudited        Audited 
                                                                                 #'000           #'000          #'000 
                                                                                                                      
  Loss for the period                                                          (2,820)         (6,390)        (6,658) 
  Gain on foreign currency translation                                               5             19              38 
                                                                                                                      
  Total recognised gains and losses for the period                             (2,815)         (6,371)        (6,620) 
                                                                                                                      
 
GROUP BALANCE SHEET 
As at 30 September 2003 
                                                                                                                      
                                                                          30 Sept 2003    30 Sept 2002    31 Mar 2003 
                                                                             Unaudited       Unaudited        Audited 
                                                             Notes               #'000           #'000          #'000 
                                                                                                                      
  FIXED ASSETS                                                                                                        
  Intangible assets - goodwill                                                  14,991          18,028         18,353 
  Tangible assets                                                                2,211           1,989          2,317 
  Investments                                                    4               2,501           4,671          2,517 
                                                                                                                      
                                                                                19,703          24,688         23,187 
  CURRENT ASSETS                                                                                                      
  Debtors                                                                       10,786          11,933         13,473 
  Cash at bank and in hand                                       7               3,608           4,431          5,407 
                                                                                                                      
                                                                                14,394          16,364         18,880 
                                                                                                                      
  CREDITORS: amounts falling due within one year                              (12,553)        (11,124)       (17,363) 
                                                                                                                      
                                                                                  
  NET CURRENT ASSETS                                                             1,841           5,240          1,517   
                                 
                                                                                                                      
                                                                                                                      
  TOTAL ASSETS LESS CURRENT LIABILITIES                                         21,544          29,928         24,704 
                                                                                                                      
  Creditors: amounts falling due after more than one year                                                             
  Convertible debt                                                               (160)           (160)          (160) 

  Other                                                                        (3,786)         (6,973)        (3,767) 
                                                                                                                      
                                                                               (3,946)         (7,133)        (3,927) 
                                                                                                                      
                                                                                  
  PROVISIONS FOR LIABILITIES AND CHARGES                         8               (361)         (1,842)          (457)   
                                 
                                                                                 
  NET ASSETS                                                                    17,237          20,953         20,320   
                                  
                                                                                                                      
  CAPITAL AND RESERVES                                                                                                
  Called up share capital                                                          901             901            901 
  Share premium account                                                         10,236          10,234         10,234 
  Merger reserve                                                                10,170          10,170         10,170 
  Profit and loss account                                                      (4,070)           (352)          (985) 
                                                                                                                      
  SHAREHOLDERS' FUNDS                                                                                                 
                                                                                 
  Equity Interests                                                              17,237          20,953         20,320
                                      

GROUP CASH FLOW STATEMENT 
For the six months to 30 September 2003 
                                                                                                                    
                                                                         6 months to     6 months to         Year to  
                                                                        30 Sept 2003    30 Sept 2002    31 March 2003 
                                                                           Unaudited       Unaudited          Audited 
                                                                               #'000           #'000            #'000 
                                                                                                                      
  OPERATING LOSS                                                             (2,514)         (6,106)          (5,414) 
  Depreciation charges                                                           488             526              834 
  Amortisation of goodwill                                                       594             793            1,467 
  Impairment of goodwill                                                       2,768           6,000            6,000 
  Profit on disposal of tangible fixed assets                                      -               -              (9) 
  Decrease in debtors                                                          2,535           3,191            1,818 
  Decrease in creditors                                                      (5,312)         (3,179)             (73) 
                                                                                                                     
                                                                                                                      
  NET CASH (OUTFLOW)/INFLOW FROM OPERATING ACTIVITIES                        (1,441)           1,225            4,623 
  Disbursements on investments and servicing of finance                         (34)            (99)             (78) 
  Equity dividends paid                                                           -            (378)            (649) 
  Taxation paid                                                                (126)         (1,139)          (2,226) 
  Capital expenditure                                                          (382)           (318)            (877) 
  Financial investments                                                           -          (2,620)          (1,456) 
  Acquisitions and disposals                                                    (12)           (159)          (1,849) 
                                                                                                                      
                                                                                                                      
  NET CASH FLOW BEFORE MANAGEMENT OF LIQUID RESOURCES 
  AND FINANCING                                                              (1,995)         (3,488)          (2,512) 
                                                                                                                      
  MANAGEMENT OF LIQUID RESOURCES                                                  -            2,500            2,500 
                                                                                                                      
  FINANCING                                                                                                           
  Issue of ordinary share capital                                                  2              43               43 
  Repayments of convertible loan notes                                          (20)           (667)            (667) 
                                                                                                                      
                                                                                (18)           (624)            (624) 
                                                                                                                      
  DECREASE IN CASH IN THE PERIOD                                             (2,013)         (1,612)            (636) 
                                                                                                                      
                                                                                                                      
  Reconciliation of movements of shareholder's funds                                                                  
  For the six months to 30 September 2003                                                                             
                                                                         6 months to     6 months to         Year to  
                                                                        30 Sept 2003    30 Sept 2002      31 Mar 2003 
                                                                           Unaudited       Unaudited          Audited 
                                                                               #'000           #'000            #'000 
                                                                                                                      
  Loss for the period                                                        (2,820)         (6,390)          (6,658) 
  Dividends                                                                    (270)           (271)            (655) 
  Shares issued during the period                                                  2              43               43 
  Gain on foreign currency translation                                             5              19               38 
                                                                                                                      
  Net reduction to shareholders' funds                                       (3,083)         (6,599)          (7,232) 
                                                                                                                      
  Opening shareholders' funds                                                 20,320          27,552           27,552 
                                                                                                                      
  Closing shareholder's funds                                                 17,237          20,953          20,320  
      

NOTES TO THE INTERIM REPORT 
 
 
1.     ACCOUNTING POLICIES 
 
There have been no changes to the accounting policies set out in the 2003 Report 
and Accounts.  
 
2.     ACCOUNTS 
 
The financial information set out in this document does not constitute statutory 
accounts within the meaning of Section 240 of the Companies Act 1985. Statutory 
accounts for the year ended 31 March 2003, on which the auditors gave an 
unqualified audit report, have been delivered to the Registrar of Companies and 
copies of the Interim Report can be obtained from our Registered Office at 15 
Welbeck Street, London W1G 9XT. 
 
The Board of Directors approved the interim report on 4 November 2003. The 
financial information in respect of the six months to 30 September 2003 is 
unaudited. 
 
 
3.     SEGMENTAL ANALYSIS 
 
The Group's turnover and operating losses were attributable to the following 
activities: 
 

                                                                                                               
                                                       6 months to                         6 months to 
                                                       30 Sept 2003                        30 Sept 2002 

                                              Turnover           Operating        Turnover           Operating  
                                                                    Profit                              Profit 
                                                 #'000               #'000           #'000               #'000 
                                                                                                               
        Career Consulting                       13,666               1,908          16,759               3,851 
                                                                                                               
        Resourcing                               4,994                  12           3,015               (587) 
                                                                                                               
        Change Consulting                        2,587               (115)           2,766               (993) 
                                                                                                               
        Inter company sales                      (157)                   -           (266)                   - 
                                                                                                               
        Unallocated central overheads                -               (923)               -               (890) 
                                                                                                               
                                                21,090                 882          22,274               1,381 
                                                                                                               
        Impairment of goodwill                       -             (2,768)               -             (6,000) 
                                                                                                               
        Restructuring costs                          -                  -                -               (694) 
                                                                                                               
        Amortisation of goodwill                     -               (628)               -               (793) 
                                                                                                               
                                                21,090             (2,514)          22,274             (6,106) 
                                                                                                               
                                                                                                               
                                                                                                            
                                                       6 months to                       6 months to 
                                                      30 Sept 2003                       30 Sept 2002 
                                              Turnover           Operating         Turnover          Operating 
                                                                    Profit                              Profit
                                                 #'000               #'000           #'000               #'000 
                                                                                                               
                                                                                                               
        UK                                      19,305             (2,574)          20,102             (6,104) 
                                                                                                               
        Rest of World                            1,785                  60           2,172                (2)  
                                                                                                               
                                                21,090             (2,514)          22,274             (6,106) 
                                                                                                               
 
 
4.     INVESTMENTS 
 
The Group's investment at 30 September represents a 15% holding in the ordinary 
share capital of Knightsbridge Human Capital Management Inc., a company 
incorporated in Canada. 
                                                                                                                
                                                    Goodwill           Share of Net                Total  
                                                                             Assets          Investments
                                                      #000's                 #000's               #000's                
           
                At 1 April 2003                        1,316                  1,201                2,517 
                Profits retained for the period           -                      18                   18 
                Amortisation for the period             (34)                     -                  (34) 
                At 30 September 2003                   1,282                  1,219                2,501 
 
 
5.     DIVIDENDS 
 
An interim net dividend of 1.5p (2002: 1.5p) per ordinary share is payable on 
12 January 2004 to ordinary shareholders on the register at the close of 
business on 12 December 2003. 
 
 
6.     EARNINGS PER SHARE 
 
Earnings per share have been calculated by dividing the profit attributable to 
shareholders for the financial period by the weighted average number of ordinary 
shares in issue during the period. The weighted average number of shares
in issue is based on the following information: 

                                                                                                                     
                                                                         30 Sept 2003    30 Sept 2002    31 Mar 2003 
                                                                            Unaudited       Unaudited        Audited 
                                                                               number          number         number 
                                                                                                                     
    Weighted average number of shares in issue per basic earnings          18,026,697      17,970,124     18,019,391 
    Dilutive effect of:                                                                                              
    Share options                                                             331,490          49,089        551,843 
    Deferred consideration                                                    249,128         249,128        249,128 
                                                                                                                     
    Weighted average number of shares in issue per diluted earnings        18,607,315      18,268,341     18,820,362 
 

The profit attributable to shareholders used in the calculation of earnings per 
share for the period is based on the following information: 

                                                                                                       
                                                           30 Sept 2003    30 Sept 2002    31 Mar 2003 
                                                              Unaudited       Unaudited        Audited 
                                                                  #'000           #'000          #'000 
                                                                                                       
                  Loss attributable to shareholders             (2,820)         (6,390)        (6,658) 
                  Exceptional items                                  -              694          1,555 
                  Goodwill amortisation and impairment            3,396           6,793          7,501 
 
The Directors consider that earnings per share before goodwill amortisation and 
exceptional items are a more representative measure of the Group's performance. 

7.     CASH AT BANK AND IN HAND 

The purchase consideration for certain acquisitions included the issue of loan
notes amounting to #3.6 million. An equivalent cash amount was transferred into
a restricted deposit account to guarantee the payment of these loan notes. This
is included within cash at bank and in hand. At 30 September 2003 the Group had
an overdraft of #214,000 (2002: #nil) excluding cash on restricted deposit. This
amount is included with creditors falling due within one year. 
 
8.     PROVISIONS FOR LIABILITES AND CHARGES 

This item, amounting to #361,000 (2002: #1,842,000), reflects the estimated
deferred consideration due under the acquisitions of Fairchild International
GmbH #55,000 (2002: #nil), Century Resources Limited #50,000 (2002: #135,000),
Target Holdings AS #nil (2002: #207,000) and The James Black Partnership
#256,000 (2002: #1,500,000).  

END  


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