Final Results

PHSC PLC Final Results 2007/08

______________________________________________

Group Chief Executive's Statement

for the year ended 31 March 2008

Highlights:

! Group revenues increased to GBP5.08m from GBP4.59m

! Profit from continuing operations maintained and disposal of loss-making
subsidiary helped profit for financial year increase from GBP462,000 to GBP521,000

! Borrowings reduced by GBP280,000

! Net Group assets rise to GBP4.89m from GBP4.52m

! Basic earnings per share (net of discontinued operations) reduced from 4.70p
to 4.48p due

to full effect of dilution

! Proposed dividend raised to 0.85p per Ordinary Share (2007: 0.80p)

! One subsidiary acquired and two further acquisitions in pipe-line

I am pleased to present my review of how the Group has performed financially
over the year, and to outline some of the activities that have taken place. In
addition, I look forward to our prospects and opportunities for the year ahead.

Although it was disappointing that we were ultimately unable to conclude our
planned acquisition of a water treatment business due to the seller withdrawing
from the transaction, we did successfully complete the purchase of In House the
Hygiene Management Company Limited (In House) on 30 November 2007. Thus the
Group presently consists of the parent company along with five active
subsidiaries. It is expected that this number will increase in the current
year. Reference to the In House transaction and other planned additions is made
in the section headed "Recent and Proposed Acquisitions" below.

As a result of being unable to proceed with the acquisition opportunity
mentioned above, a higher than anticipated level of cash was held throughout
the period. This cash arose from the GBP1m placing that occurred in March 2007.
In addition, given that the company is cash-generative, a decision was made to
reduce borrowings. In consequence, bank loans secured against Group-owned
properties had reduced from around GBP370,000 at the start of the year to around
GBP90,000 at the year end.

In line with the Board's stated policy of buying back shares where the price is
attractive and where cash flow allows, a total of 136,277 ordinary shares were
purchased during the year and subsequently cancelled. This included the
remaining holding of 86,277 shares originally issued to the seller as part of
the consideration for RSA Environmental Health Limited (RSA) in 2004.

In last year's statement I reported that we had purchased additional premises
for Adamson's Laboratory Service Limited (ALS) at Raunds in Northamptonshire,
adjacent to the existing offices leased by RSA. We have now agreed to acquire
the virtual freehold of the RSA premises themselves for a fee of GBP73,500 and
that purchase is currently in progress. This will be funded from existing cash
resources.

Recent and Proposed Acquisitions

The Group acquired In House the Hygiene Management Company Limited (In House)
on 30 November 2007 for an initial consideration of GBP200,000 paid for out of
existing cash resources. Further payments of GBP50,000 become due on each of the
first and second anniversaries. Both anniversary payments are subject to an
uplift equal to 50% of any pre-tax profit that exceeds GBP100,000 in the
preceding year. In House is a well-respected and established food safety and
hygiene consultancy, with hospitals, schools and hotels among its client base.
The company also offers general health and safety consultancy and training.
Please refer to the section of my report headed Performance by Trading
Subsidiaries for information on post-acquisition performance.

Since the year end, Heads of Terms have been signed for the acquisition of two
companies that will each bring significant new benefits and opportunities to
the Group. Both proposed transactions are subject to a due diligence process
currently in progress. Details of the intended acquisitions are outlined below.

The first company is an independent specialist in the examination and
certification of plant and equipment, offering an inspection service for all
statutory and non-statutory requirements throughout the UK. Originally formed
in 1992, the company derives much of its work from a network of insurance
brokers and enjoys a high level of repeat business. The agreed price is GBP
180,000 payable in cash on completion, plus assets at book value. An additional
GBP25,000 becomes due on the first anniversary subject to pre-tax profits of not
less than GBP60,000 accruing in the period. In the last financial year, the
company recorded pre-tax profits of GBP40,000 on revenues of GBP221,000.

The second company was originally formed in 1989 and provides specialist
scientific, process and engineering services to the water industry. Projects
are undertaken in the potable water, waste water, fresh water and marine water
environments. The business is ideally placed to benefit from increasing
regulatory attention being paid to the sector. In particular, the company
assists clients to meet EU-driven environmental legislation, and the Asset
Maintenance Planning (AMP) programmes that water companies must agree with
Ofwat, the regulatory body. The purchase price has been agreed at GBP500,000
inclusive of net assets of approximately GBP335,000. An initial sum of GBP350,000
becomes payable on completion, GBP100,000 six-months thereafter, and the balance
on the first anniversary of completion. All these payments will be made from
currently existing cash resources. Management accounts for the nine-months to
end of March 2008 indicate that the company had revenues of GBP316,000 for that
period and pre-tax profits of GBP124,000 before director's earnings.

Corporate Structure

In addition to myself, Nicola Coote is an executive director. There are two
non-executive directors on the Board: Mike Miller, who chairs the Audit
Committee, and Graham Webb MBE who chairs the Remuneration Committee.

A Chartered Secretary, Lorraine Young, supports the Board and its committees.
The corporate resource is strengthened by the presence of our Group Accountant,
Candy Wilton.

Performance by Trading Subsidiaries

Profit figures below are stated before tax and Group management charges. Note
that several general health and safety training and consultancy assignments
carried out by particular trading subsidiaries will have been invoiced by other
Group companies as in previous years, thus it is inappropriate to make direct
performance comparisons at subsidiary company level. Reference should be made
to the Group's overall performance.

Personnel Health and Safety Consultants Limited

Sales of GBP1.05 million, yielding a profit of GBP561,000.

In the previous year there were sales of GBP1.12 million and a profit of GBP
528,000.

RSA Environmental Health Limited

Sales of GBP971,000, yielding a profit of GBP70,000.

In the previous year there were sales of GBP966,000 and a profit of GBP68,000.

Adamson's Laboratory Services Limited

Sales of GBP2.73m yielding a profit of GBP490,000.

In the previous year there were sales of GBP2.44m, yielding a profit of GBP542,000
after adjusting to include unbilled revenues at the year end of GBP119,000.

Envex Company Limited

Sales of GBP224,000, yielding a profit of GBP15,000.

By comparison, invoiced sales for the four months after acquisition were GBP
55,000, resulting in a profit of GBP3,000.

Dividend

The Board is proposing a final dividend of 0.85p per ordinary share to be paid
on 19 September 2008 to shareholders on the register as at 22 August 2008.

Prospects

We are finding that the pricing of health and safety consultancy services is
becoming more competitive, and margins are under pressure. Despite this tougher
economic environment, the Board takes the view that PHSC plc can look forward
to revenue growth and a good performance in the forthcoming year. Whilst much
of the growth is dependent on the successful conclusion of the proposed
acquisitions outlined above, the marketplace for the current subsidiaries'
services is still strong. We feel that we are better placed than the majority
of our competitors to withstand the effects of any downturn. Our confidence
arises from the fact that we have a very diverse client portfolio and there are
many ongoing contracts that will underpin revenues.

Trading in the first two months of 2008/09 generated Group revenues of GBP810,000
(2007/08: GBP725,000).

AGM

The Annual General Meeting will be held on Friday 12 September 2008 at The Old
Church, 31 Rochester Road, Aylesford, Kent ME20 7PR at 10:00am.

Stephen King
Group Chief Executive



GROUP BALANCE SHEET                            31.3.08        31.3.07 
                                                              Restated        
AS AT 31 MARCH 2008                            GBP'000         GBP'000
                                                                    
                                                                 
                                                                      
Non-Current Assets                                                    
                                                                      
Property, plant and equipment                  807            818     
                                                             
Goodwill                                       2,585          2,240   
                                                                      
                                               3,392          3,058   

Current Assets                                                        
                                                                      
Inventories                                     263            389    
                                                                      
Trade and other receivables                     1,026          951    
                                                                      
Cash and cash equivalents                       1,303          1,469  
                                                                      
                                                2,592          2,809  

Total Assets                                    5,984          5,867  

Current Liabilities                                                   
                                                                      
Trade and other payables                        551            504    
                                                                      
Financial liabilities                           4              84     
                                                                      
Current corporation tax payable                 238            236    
                                                                      
Short term provisions                           80             144    
                                                                      
                                                873            968    

Non-Current Liabilities                                               
                                                                      
Financial liabilities                           85             287    
                                                                      
Long term provisions                            50             -      
                                                                      
Deferred tax liabilities                        83             91     
                                                                      
                                                218            378    

Total Liabilities                               1,091          1,346  

Net Assets                                      4,893          4,521  

Capital and Reserves attributable                                     
to Equity holders of the Group                                        
                                                                      
Called up share capital                         1,152          1,166  
                                                                      
Share premium account                           1,488          1,488  
                                                                      
Revaluation reserve                             200            202    
                                                                      
Capital redemption reserve                      19             5      
                                                                      
Retained earnings                               2,034          1,660  
                                                                      
                                                4,893          4,521  






GROUP INCOME STATEMENT                         31.3.08        31.3.07 
                                                              Restated        
FOR THE YEAR ENDED 31 MARCH 2008               GBP'000         GBP'000
                                                                      
                                                              
                                                                      
Continuing operations:                                                
                                                                      
Revenue                                        5,078          4,589   
                                                                      
Cost of sales                                  2,721          2,306   
                                                                      
Gross Profit                                   2,357          2,283   
                                                                      
Administrative expenses                        1,637          1,504   
                                                                      
Other income                                   1              1       
                                                                      
Operating Profit                               721            780     
                                                                      
Finance income                                 56             9       
                                                                      
Finance costs                                  20             28      
                                                                      
Profit before taxation                         757            761     
                                                                      
Corporation tax expense                        236            239     
                                                                      
Profit for the Financial Year on               521            522     
Continuing Operations                                                 
                                                                      
Loss for the Financial Year on                 -              60      
Discontinued Operations                                               
                                                                      
Profit for the Financial Year                  521            462     
                                                                      
Attributable to:                                                      
                                                                      
Equity holders of the Group                    521,162        462,401 
                                                                      
Earnings per Share for Profit from                                    
Continuing Operations attributable to                                 
the Equity Holders of the Group                                       
during the year                                                       
                                                                      
Basic                                          4.48p          5.31p   
                                                                      
Diluted                                        4.42p          5.22p   
                                                                      
Earnings per Share for Profit from                                    
Discontinued Operations attributable                                  
to the Equity Holders of the Group                                    
during the year                                                       
                                                                      
Basic                                          -              (0.61)p 
                                                                      
Diluted                                        -              (0.60)p 



GROUP STATEMENT OF       Share   Share   Capital    Revaluation     Retained   Total 
                                                                               
CHANGES IN EQUITY        Capital Premium Redemption     Reserve     Earnings      
                                           Reserve                                    
FOR THE YEAR ENDED          GBP      GBP       GBP          GBP          GBP     GBP           
                                                                               
31 MARCH 2008                                                                 
                                                                               
Balance at 1 April 2006    983       728         -          205        1,298    3,214 
                                                                               
Profit for year              -         -         -           -           462      462   
attributable to equity                                                         
holder                                                                         
                                                                               
Dividends                    -         -         -           -           (74)     (74)  
                                                                               
Issue of ordinary shares   188       812         -           -             -     1,000 
                                                                                  
Costs of placing new         -       (52)        -           -             -      (52)  
shares issued                                                                  
                                                                               
Purchase of own shares      (5)        -         5           -           (29)     (29)  
                                                                               
Depreciation on revalued     -         -         -          (3)            3        -     
assets                                                                         
                                                                               
Balance at 31 March 2007  1,166     1,488        5          202         1,660    4,521 
                                                                               



Balance at 1 April 2007   1,166     1,488        5          202         1,660    4,521   
                                                                             
Profit for year               -         -        -            -           521      521     
attributable to equity                                                       
holder                                                                       
                                                                             
Dividends                     -         -        -            -           (92)     (92)    
                                                                             
Purchase of own shares      (14)        -       14            -           (57)     (57)    
                                                                             
Depreciation on revalued      -         -       -            (2)            2        -       
assets                                                                       
                                                                             
Balance at 31 March 2008   1,152    1,488       19           200         2,034    4,893   
                                                                             



GROUP CASH FLOW STATEMENT                         31.3.08        31.3.07 
                                                                 Restated        
FOR THE YEAR ENDED 31 MARCH 2008                  GBP'000        GBP'000
                                                                         
                                                                
                                                                         
Cash flows from operating activities:                                    
                                                                         
Cash generated from operations                    897            658     
                                                                         
Interest paid                                     (20)           (28)    
                                                                         
Tax paid                                         (245)          (186)   
                                                                        
Net cash generated from operating                 632            444     
activities                                                               
                                                                         
Cash flows from investing activities                                     
                                                                         
Purchase of property, plant and                  (42)           (166)   
equipment                                                                
                                                                         
Proceeds from sale of property, plant              -               7       
and equipment                                                            
                                                                         
Purchase of subsidiary companies (net of         (382)          (160)   
cash acquired)                                                           
                                                                         
Interest received                                  56              9       
                                                                         
Net cash used in investing activities            (368)          (310)   
                                                                         
Cash flows from financing activities                                     
                                                                         
Proceeds from borrowings                            -             93      
                                                                         
Repayment of borrowings                           (281)          (90)    
                                                                         
Dividends paid to group shareholders               (92)          (74)    
                                                                         
Proceeds of share issues                            -             948     
                                                                         
Purchase of own shares                             (57)          (29)    
                                                                         
Net cash (used by)/generated from                 (430)           848     
financing activities                                                     
                                                                         
Net (decrease)/increase in cash and cash          (166)           982     
equivalents                                                              
                                                                         
Cash and cash equivalents at beginning            1,469           487     
of year                                                                  
                                                                         
Cash and cash equivalents at end of year          1,303          1,469   


                                                                         

NOTE TO THE GROUP CASH FLOW STATEMENT             31.3.08        31.3.07 
                                                                 Restated                
FOR THE YEAR ENDED 31 MARCH 2008                  GBP'000        GBP'000  
                                                                         
                                                                 
                                                                         
I. CASH GENERATED FROM OPERATIONS                                        
                                                                         
Operating profit - continuing operations             721            780     
                                                                         
Profit for financial year - discontinued               -            (60)    
operations                                                               
                                                                         
Depreciation and amortisation charges                 54             81      
                                                                         
Loss on sale of discontinued operations                -             34      
                                                                         
Loss on sale of fixed assets                           -              3       
                                                                         
Decrease/(increase) in stock and work in             126            (83)    
progress                                                                 
                                                                         
Decrease/(increase) in debtors                        10            (251)   
                                                                         
(Decrease)/increase in creditors                    (14)             154     
                                                                         
Cash generated from operations                       897             658     
                                                                         

For further information please contact:

PHSC plc

Stephen King 01622 717700

www.phsc.plc.co.uk

Ruegg & Co Limited

Gavin Burnell 020 7584 3663

Hichens, Harrison & Co. plc

Daniel Briggs 020 7382 7776