DRIVINGCHANGE PEOPLELED TECHNOLOGYENABLED

PrelimResultsto31stDec2016

AlanRommel- ChiefExecutiveOfficerRogerAntony- GroupFinanceDirector March2017

DRIVINGCHANGE PEOPLELED TECHNOLOGYENABLED

• RobustFinancialPerformance• Growthachievedinrevenue,OperatingMarginsandProfit• Deleveragedbalancesheetduetosignificantimprovementincashgeneration

• Non-recurringcostsabated

• Deliveringagainstgrowthstrategy• ParityConsultancyServicesup-sellofhighervaluemanagedservices

• Rationalisationofnon-coreservices• Boardstrengthened– NewlyappointedChairmanandNon-ExecutiveDirectorwithindustryexperience

• Overheadcostreductionswhilstinvestinginbuildingsalesandmarketingactivity

• Well-positionedtocontinuegrowthmomentum

Highlights

DRIVINGCHANGE PEOPLELED TECHNOLOGYENABLED

FinancialReview

DRIVINGCHANGE PEOPLELED TECHNOLOGYENABLED

Profitable

2016:PBT£1.0m2015:LBT(£3.3m)

Growthinbothdivisions

2016:£1.77m2015:£1.03m

Cashgenerative

2016:£3.4m2015:£0.2m

Operatingprofit(beforenon-recurringcosts)

up72%

Contributiongrowth:• Professionals:17%• Consultancy:30%

Significantreductioninnetdebt

2016:£4.4m2015:£7.4m

Improveddivisionalcontributionmix

Consultancy%oftotal:• 2016:25%• 2015:23%

FinancialHighlightsFY2016

DRIVINGCHANGE PEOPLELED TECHNOLOGYENABLED

Yearended31stDecember2016£000

2015£000

%Growth

Revenue 91,764 82,607 +11%

Segmental contribution 3,570 2,974 +20%

CentralCosts (1,439) (1,591) -10%

Depreciation (365) (357)

OperatingProfit(beforenon-recurringitems) 1,766 1,026 +72%

Financecostsnetofincome (452) (566)

Non-recurring costs (355) (3,725)

Profit/(loss) beforetax 959 (3,265)

Tax (75) (164)

Profit/(loss)fromcontinuingoperations 884 (3,429)

Discontinuedoperations (78) (490)

Profit/(loss)fortheyear 806 (3,919)

• Revenueup11%,withgrowthinbothdivisions:

• Professionals+10%,drivenbyincreaseincontractorvolumes

• ConsultancyServices+20%,drivenbyworkonMCOCSengagement

• ImprovementinOperatingProfitflowingfrom:

• Growthinrevenues• Improvedmarginsineachdivision• Improvedmix,withgreater

contributionfromPCS• Strongcostcontrol

IncomeStatement

DRIVINGCHANGE PEOPLELED TECHNOLOGYENABLED

Professionals 2016£000

2015£000

Revenues 86,419 78,190

DivisionalContribution 2,660 2,276

DivisionalContributionMargin 3.1% 2.9%

ParityProfessionals

• Averagecontractors:1,009(2015:891)

• Contractmargin:8.3%(2015:7.7%)

• Targetedinvestmentinhighgrowthareas

Consultancy Services 2016£000

2015£000

Revenues 5,345 4,417

DivisionalContribution 910 698

DivisionalContributionMargin 17.0% 15.8%

ParityConsultancyServices(“PCS”)

• GrowthfromfeesforMoDMCOCSprojectwithextensionsecured

• CollaborationwithPPhelpstoimproveContributionmargin%

• Investmentin3newPracticeHeads

Combined 2016£000

2015£000

Revenues 91,764 82,607

DivisionalEBITDA 3,570 2,974

DivisionalContributionMargin 3.9% 3.6%

Combined

• PCScontinuestrendofincreasingcontributionstotheGroup’sresults:

• 2016:25.5%oftotalDivisionalContribution• 2015:23.5%oftotalDivisionalContribution

DivisionalResults

DRIVINGCHANGE PEOPLELED TECHNOLOGYENABLED

Dec’16£000

Dec’15£000

Intangibleassets 5,055 7,113

Tangibleassets 72 180

Deferredtax 409 507

Workingcapital 5,269 7,106

Provisions (17) (14)

Retirementplan liability (1,848) (1,491)

8,940 13,401

Assetsheldforsale 1,906 -

Net debt (4,386) (7,379)

Netassets 6,460 6,022

IntangibleassetsReductionpredominatelyduetothereclassificationofInitionas“Assetsheldforsale”andwritedownofGPSeer.

WorkingcapitalWorkingcapitalreducedduetoanincreaseinfees-in-advance,animprovementindebtordaysfrom31to29days,andthereclassificationofInition.

RetirementplanliabilityTherewasanactuariallossof£0.4monthescheme,primarilyasaresultoflowerbondyieldsreducingthediscountrateusedtocalculatethescheme’sliabilities.DeficitcontributionsresumedinQ22016,butatalowerlevel.

AssetsheldforsaleInition’s netassetsandgoodwillclassifiedas“heldforsale”at31.12.16

NetdebtCashgeneratedfromoperationsof£3.4mhaslargelybeenusedtopaydownfinancefacility.During2016,the£15.0mfacilitywasextendeduntilDec2018onimprovedterms.

BalanceSheet

DRIVINGCHANGE PEOPLELED TECHNOLOGYENABLED

£3.4mcashgeneratedfromoperations.Debtordaysimprovedto29days(Dec’15:31days)

CashFlowBridge

DRIVINGCHANGE PEOPLELED TECHNOLOGYENABLED

OperatingReview

DRIVINGCHANGE PEOPLELED TECHNOLOGYENABLED

ParityProfessionals

ParityConsultancyServices

ProjectWorkT&

MW

ork

AlignedSectors PracticeLeadersSkilledExpertise

Strategy

DRIVINGCHANGE PEOPLELED TECHNOLOGYENABLED

ParityProfessionals:specialisingintherecruitmentanddevelopmentofprofessionalstaffthroughtheResourcesandTalentManagementofferings.

Performance• Averagenumberofcontractorsonbillingup13%vs2015• Grossprofitoncontractup19.7%vs2015• PermGPincreasedby34%vs2015Focus• RecruitmentincreasedspecialisminDigital,Data,

InformationSecurity• Talentmanagement– productivityimprovementthrough

consultant-ledsalesofhigher-valueproductisedprogrammes• Allkeyperformanceindicatorspositive

ParityProfessionals

DRIVINGCHANGE PEOPLELED TECHNOLOGYENABLED

ParityConsultancyServices:nicheexpertisecreatingtechnologysolutionsanddrivingchangeprogrammeswithindustry-experiencedconsultants.

Performance• Revenueincreaseof21%vs2015• Contributionincreaseover30%vs2015• Nowrepresents25.5%ofGroupcontribution• Improvedutilisation(80%vs73%in2015)

Focus• ProjectandchangemanagementtargetingDefence,Health,

Utilities• Winningmanagedservicescontractsfordeliveryand

developmentprogrammes,improvinglonger-termvisibility• IncreasedtechnologyspecialisminDataAnalytics,Data

Management,Architecture,DigitalTransformation• AwardofnewG-CloudandDigitalOutcomesframeworksplus

furtherextensionstoMCOCScontract

ParityConsultancyServices

DRIVINGCHANGE PEOPLELED TECHNOLOGYENABLED

Increasingfocusonprojectdelivery• Project/ChangemanagementpropositionledbyIndustryexperts

• ManagedServicescontractsfordevelopmentservices• Supportedbybuildingskillsverticals

Leverageopportunity• Jointbids,up-sellandcross-sellforhigher-valuesales• Clientflexibilitycombiningnicheservicesintoanintegratedsolutionbuildingstrongerclientrelationships

Increasescale• Recruitandtrainsales/marketingstaff• RapidlyscalablemanagedteamswithsupportofresourcingserviceandassuranceofConsultancy

• Maintainimprovementinutilisationwithdeliverystaff• Biddinganddeliveringlargerprojects

PrioritiesforGrowth

DRIVINGCHANGE PEOPLELED TECHNOLOGYENABLED

OutlookMarketopportunity• LegislativechangeandBrexitmayreducesupplyorstimulatedemandfordevelopmentteams

• Clientsseekingflexibilityandassurancewhichwecanprovide• Simplicityofstrategy– straightforwardexecutionwithcomplementarybusinesseswithstable,profitableofferingsatthecore

Groupfocusfor2017/18Operations• SaleofInitiontoenablefocusoncorebusinessstrategySales• Consultancypropositionstobreakintonewclientsintargetsectors• Leverageexistingrelationshipstoupsellmanagedservices• Moreproductisedserviceofferings

DRIVINGCHANGE PEOPLELED TECHNOLOGYENABLED

• RobustFinancials• Areturntogrowthforthecompany• Increasinglyprofitable• Utilisation,costcontrolandcashgeneration

• Strategicallyplacedtobenefitfromnewhighermarginservices• Provencapabilities– wellpositionedinthemarketplace• Confidenceforthefuture

• Drivingorganic,profitablegrowththroughinvestmentinhighervalue,highermargin,alignedopportunitieswithlongertermvisibility

Summary