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UK — Work Group makes an operating loss of 555,000 Pounds

22 September 2009

Work Group plc (WORK:LSE), the employer marketing communications and talent management services provider, today announces interim results for the six months ended 30 June 2009.

Revenues were down from 18.7 million Pounds in the first six months of 2008 to 12.2 million Pounds in the same period this year. The company made an operating loss of 555,000 Pounds compared to an operating profit of 1 million Pound in 2008.

Management has decided to pay no dividends for the period in question compared to 0.5 Pence in 2008.

The group has reduced its cost base considerably. In the UK, cost reduction was 27%. Head count across the group has fallen by 30% from 238 in 2008 to 166 in 2009. Property cost have equally been rationalised through a lease surrender and co-location of Armstrong Craven People in the existing Hale office.

Chairman Simon Howard said in a statement, "the key challenge of recession is how to lead and manage a company through a period of significant decline - because it is the decline and consequent adjustment which can be particularly painful within a people business."

"Headcount has been reduced, salary cuts implemented and office space rationalised. Despite this, our teams have worked with enormous commitment and to have reached the half year having broken even at the operating level (before exceptional costs) is a creditable achievement. It is also pleasing to have seen non-UK and Europe income increase and cash remain strong throughout the period."

"However, recessions are not just about challenge. They present opportunities too - not least that change is accelerated. We are in the business of changing the way employers recruit and retain talent, and so our task now is to exploit that opportunity. I do not believe that we will see any significant level of growth return to the market this year and so our challenge is to improve our performance through winning more projects from more clients."

In early trading Work Group's shares were unchanged at 9.50 Pence.



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