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Network Group Holding Interim Results


Network Group Holdings plc (AIM: NGH), the specialist recruitment and business outsourcing group, has announced its interim results for the six months ended 31 May 2009. Revenues of 26.3 million were down from 29.1 million and the company made a loss before tax of 954K.


The first half of the year has seen extremely difficult market conditions and
following the activity of last year, with the purchase and subsequent disposal
of Pertemps People Development Group ('PPDG'), the focus for this year has been very much to guide the Group through these challenging economic times. This will continue to be the focus for the remainder of the year.

The reported profit for the period, after Other Items, is 376,000 (6 months
ended 31 May 2008: 726,000, year ended 30 November 2008: 1,879,000). However,the income statement includes a credit of 1,321,000 (6 months ended 31 May 2008: nil, year ended 30 November 2008: 233,000 charge), presented within the Other Items column, in respect of the movement in the value of the liabilities associated with the Group's equity conversion mechanism. The liability is calculated using the historical profits of participating subsidiaries and with a recent reduction in profits, the value of the liability has reduced causing a credit to the income statement.

Also included within Other Items is a charge of 40,000 (6 months ended 31 May 2008: nil, year ended 30 November 2008: 126,000) in respect of the movement in value of the Group's interest rate collar.

The Board views the movement in the value of the equity conversion mechanism liabilities and the movement in the value of the Group's interest rate collar as non-operational accounting entries and not the result of operational activities and consequently has included them within Other Items.

Excluding Other Items, the Group reported an operating loss of 766,000 for the period, compared to an operating profit of 906,000 for the first half of 2008, reflecting the tough market conditions in which the Group has been operating.

The Board has chosen to present information in the consolidated income
statement both before and after the inclusion of Other Items as described


We must continue to be cautious in our outlook in these challenging economic conditions, which make it very difficult to predict the remainder of the current year.

The Group continues to address its overhead structure across all areas of the
business and will continue to do so as long it remains necessary. The Group
expects to be in a position to take advantage of the upturn in the economy as it comes.


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