PNX Phoenix It

RNS Number:5480B
Phoenix IT Group PLC
06 August 2007



Embargoed for 7.00am, Monday 6 August 2007


                            Phoenix IT Group plc

                          Interim Management Statement

Phoenix IT Group plc ("the Group") is today publishing its first Interim
Management Statement relating to the period from 1 April 2007 up to the latest
practicable date prior to the publication of this statement, 3 August 2007, as
required by the UK Listing Authority's Disclosure and Transparency Rules.
Financial data is for the period from 1 April 2007 up to 30 June 2007, being the
latest practicable date for the collation of such data prior to the publication
of this statement, unless otherwise stated.

Since the last financial year end of 31 March 2007 the Group has completed the
acquisition of ICM Computer Group ("ICM") which represents a significant event
in the continued expansion of the Group following the successful acquisitions of
Trend (in 2004), NDR (in 2005) and Servo (in 2006).  The total consideration
(excluding costs) consisted of #61.8m in cash and the issue of 14,034,184
ordinary shares in the share capital of the Group. The Group also repaid
approximately #10m of ICM bank debt. The cash element of the acquisition has
been satisfied from new banking facilities with Royal Bank of Scotland plc
(replacing all existing facilities) comprising five year term, and revolving
credit facilities, which total #130m, together with a further #10m overdraft
facility. Primarily as a result of the ICM acquisition, the Group's net
borrowings (including finance leases) increased from #27.7m at 31 March 2007 to
#103.7m at 31 July 2007.

Including Servo (acquired on 3 November 2006) and ICM (consolidated from 1 June
2007), Group revenues for the first three months of the financial year increased
by approximately 57% compared with the same period last year. Like for like
revenues, excluding acquisitions, were approximately 5% ahead of last year, with
a resumption of growth in the Phoenix IT Services 'Partner' business together
with continued growth in the business continuity market. Operating margins are
in line with the Board's expectations. Compared to June 2006, the like for like
order book and annualised contract values increased by approximately 9% and 20%
respectively and the Group has continued to be highly cash generative with cash
generated by operations representing 135% of profit from operations in the
period.

On 14 June 2007 the Group announced the acquisition of a lease on a new 100,000
sq ft Business Continuity centre strategically located to the south west of
London in Farnborough, Hampshire, for an initial 9 year term at #2.2m per annum,
and benefiting from a significant multi-million pound reverse premium.

The Group is today pleased to announce that it has been awarded its largest
Business Continuity contract to date, and the second major contract for the new
Farnborough centre. The contract, with a London-based top ten global investment
bank, is worth approximately #12m over the duration of the contract term of
three years. The Group previously announced in June 2007 that it had been
awarded a contract valued at #8.4m over the contract term of seven years which
was the largest business continuity contract award at that time.

The latest contract will commence in November 2007, with a mix of dedicated
dealing, back office and syndicated work area positions. The client will become
the second major financial services sector user of the new Farnborough Centre
and further demonstrates the Group's success in signing large, long-term
contracts with major blue chip organisations.  The contract takes the total
contract order book associated with the new Farnborough facility to more than
#20m in less than two months following the acquisition of the premises.

The recent devastating flooding in many areas of the country serves to emphasise
the importance of the Group's business continuity services to its clients, many
of whom have called upon us for our continuity services. We are delighted to
report that all our clients' requests for disaster recovery assistance were
successfully fulfilled and our affected clients have been able to operate
despite the flooding.

The Board remains confident that, given the complementary nature of disaster
recovery, business continuity and IT solutions and support services, the
combination and integration of the Group and ICM businesses will provide the
potential to exploit the substantial opportunities in the IT support and
business continuity markets.

The financial year has started in line with the Board's expectations and the
Board remains confident of continued growth for the current year.  Following the
ICM acquisition, the integration planning is at an advanced stage and the Group
is focused on delivering the synergy benefits associated with a successful
integration, together with continued organic growth in each of the market
segments in which the Group operates.



Enquiries

Phoenix IT
Nick Robinson                                               01604 669 597
Jeremy Stafford
David Simpson

Financial Dynamics
Harriet Keen                                                020 7831 3113
Haya Chelhot




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