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FDM Group Plc - Trading Update

FDM Group Plc - Trading Update

FDM, the international IT services business, today provides an update on its trading for the six month period to 30 June 2009.

The Company is pleased to report that its profit performance for the first six months is in line with directors' expectations despite difficult economic conditions. However, the Company has experienced pressures on freelance contractor rates and the buying patterns of our institutional client base have exhibited two distinct trends associated with the economic uncertainty:
buying decisions are taking longer than we would normally expect and
once buying decisions have been made, contract durations associated with placements of our in-house "Mountie" resources and freelance contractors have shortened in comparison with the position at 31 December 2008.

These changes in buying behaviour mean that visibility has reduced and predictability has become more difficult throughout our client portfolio and across our international businesses. At 30 June 2009 we had 302 Mounties and 326 freelance contractors compared with 293 and 332 at 31 December 2008 respectively, which is lower than the directors' had originally anticipated for the end of the half year.

We continue to carefully manage our overhead expense base and monitor our cash collections through well-organised interaction with our customers. However, we have seen a modest increase in debtor days since the financial year-end reflecting more stringent working capital management by our clients.

Despite the current poor economic conditions we continue to invest for the future and have completed the transition of our London training operations into modern office space at 55 King William Street in January 2009. These training facilities will serve us well once market conditions improve.

Update on the possible offer

On 4 June 2009 the Company announced that it was in discussions with its management in respect of a possible offer for the Company. The Company has continued its discussions with the management team regarding the potential offer. Further announcements will be made in due course.

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