Final Results

Ricardo PLC
17 September 2007


17th September 2007


                                  Ricardo plc

            Preliminary results for the Full Year ended 30 June 2007


Ricardo plc is the leading UK independent automotive consultancy, employing over
1,600 people worldwide. The company has centres in the UK, USA, Germany, Czech
Republic and Asia, and has a client list that includes the world's leading
automotive OEMs.


Highlights

   •    Continued improvement in business mix and operational efficiency
        resulting in increased underlying operating margin

   •    Revenue level at £171.5m (June 2006: £171.9m) - strong growth in the UK
        business driven by increased Technical Consulting content from Asia and
        Germany, offset by expected reduction in Strategic Consulting and the 
        slow start in the US in the first half

   •    Underlying profit before tax up 13% to £12.2m after US management 
        change costs of £0.4m (June 2006: £10.8m, excluding a £3.7m pensions 
        credit)

   •    Profit before tax £12.2m (June 2006: £14.5m)

   •    Order book up 28% to £92m (June 2006: £72m)

   •    Basic earnings per share up 23% to 29.6p (June 2006: 24.0p, underlying
        18.8p) significantly benefiting from retrospective R&D tax allowances
        resulting in an overall tax credit

   •    Full year dividend (paid and proposed) increased by 6.4% to 10.0p (June
        2006: 9.4p)

   •    The broader geographical, sector and client base combined with additions
        to the senior management team, positions the business for further growth 
        in the current year


Commenting on the results, Dave Shemmans, Chief Executive Officer said:

'This year Ricardo finished with a strong order book, increased management
strength and an exciting pipeline of technology. Trading performance was in line
with expectations despite restructuring costs in the US and weaker performance
in our US and Strategic Consulting operations overall. Our strategy to broaden
the business mix and concentrate on margins, for the work that we undertake has
resulted in continued development of the profitability of the business.

'The global automotive industry is active with new product offensives driven by
stringent emissions legislation, desire to improve fuel economy and the need to
reduce CO2 emissions. Ricardo is benefiting by having the strategy, technology
and presence to exploit these growing demands and global industry drivers.

'We have had a satisfactory start to the new financial year, benefiting from the
strong order book and continued good order intake. The continuing delivery of
our strategy to increase geographic, customer and sector spread, together with
the implementation of a US business improvement plan, gives us confidence for
continued progress in the new financial year.'


Further enquiries:

Ricardo plc
Dave Shemmans, Chief Executive                                Tel: [phone]
Paula Bell, Group Finance Director
Website: www.ricardo.com

Gavin Anderson & Company                                      Tel: [phone]
Fergus Wylie
Michael Turner




Review of the Year

Trading Performance

Delivering against our strategic objectives which include broadening our
customer and geographic reach has resulted in continued profit growth, improved
margins and a strong closing order book at £92m, which was up 28% on last year.
The content of the order book now includes orders spanning more than 12 months
underpinning longer term business growth.

Revenue for the financial year to 30 June 2007 was level at £171.5m (2006:
£171.9m). Strong business growth in the UK was offset by an expected revenue
reduction for Strategic Consulting as a result of the completion of three major
contracts in the previous year, and a slower start to the year in the US
business. Underlying operating profit increased to £13.2m (2006: £12.1m
excluding the pensions credit of £3.7m), representing a 7.7% operating margin on
revenue (2006: 7.0%). This increase was underpinned by a trend of improved
business mix and efficiency in the UK.

Underlying Group profit before tax was £12.2m, which was 13% up on last year
(2006: £10.8m).


Tax

Ricardo has been claiming UK R&D tax credits since they were introduced in 2002.
As we highlighted at the half year, we have examined the basis for calculating
the UK R&D claim resulting in increased claims for 2004 to 2006. In addition, we
undertook a major project to prepare an R&D tax claim in respect of our US
business. This claim covers the period 2000 to 2006. This has resulted in an
overall tax credit for the financial year. Excluding these significant benefits
of £5.2m from our tax charge this year, and a related small impact last year of
£0.7m, the tax charge is normalised at 19%, compared to 18% for the prior year.


Earnings per share

The basic earnings per share has significantly benefited from the overall tax
credit this financial year and has increased to 29.6p (2006: 24.0p, 18.8p
excluding the pensions credit). However, we do not expect to benefit to the same
extent in future periods from significant retrospective R&D tax allowances,
which will therefore impact on the future earnings per share comparisons.


Dividend

We are proposing to increase the total dividend (paid and proposed) to 10.0p per
ordinary share (2006: 9.4p) following a year of further earnings growth. The
dividend cover will be almost three times. The proposed final dividend of 7.1p,
(2006: 6.7p) will be paid on 23 November 2007 to all shareholders on the
register at the close of business on 26 October 2007, subject to approval at the
Annual General Meeting on 9 November 2007.


Net Assets

Net assets at 30 June 2007 were £61.7m, compared with £50.1m a year earlier.
This increase is primarily driven by ordinary trading, the reduction in our
pension deficit and reduction in our tax liabilities resulting from R&D
allowances.

Capital expenditure in the year was £9.5m, which included £4.1m to upgrade test
cells to satisfy the increasing demand to meet new emissions legislation. As a
lease expired at one of our German properties we chose to acquire the building
for £1.2m as a more cost effective option. The balance of the capital
expenditure was necessary to maintain our facilities and keep our information
technology systems up to date. At the year end our capital commitments totalled
£0.5m.

Work is under way to upgrade our office buildings at Shoreham-by-Sea some of
which have become rather dated. Our capital expenditure is likely to increase
marginally as a result, as we continue to invest in our test and IT software
systems to support our growth agenda.


Working Capital

We continuously manage and monitor the level and quality of debts and work in
progress as we deliver our customer diversification strategy. In the full year,
working capital grew by £3.9m reflecting our growing order book which has
increasing content from Asia where client's payments tend to be slower. The net
debt balance has more than halved since the half year, to £7.2m, which
represents only a small increase since June 2006 of £1.4m.


Pensions

The deficit in our defined benefit pension scheme as measured in accordance with
IAS 19 Employee Benefits, reduced from £23.6m to £16.7m due mainly to a better
than anticipated return from the equity investments in the fund, an improved
bond yield and additional cash payments into the fund. The reduction was despite
the adverse impact of assuming current mortality factors. We continue with our 9
year plan to substantially eliminate the deficit by making additional cash
payments.


Technical Consulting


UK

Our UK business, which includes engine, transmission, electronic and vehicle
engineering, increased its order intake, order book, revenue and profits against
the prior year. The area showing the strongest growth was the engines and
transmission businesses, driven by activity from European and Asian clients. In
response, we have increased the size and capacity of our engineering teams in
the UK and the Czech Republic engineering centre which supports it.

The engines business benefited from an increase in demand for advanced diesel
technology in both the commercial and passenger car sectors, driven heavily by
three principal factors: pending emissions legislation, the global drive for
fuel economy and the emergence of the US as a new market for diesel passenger
cars. The commercial vehicle sector was also strong in our Asian markets,
particularly India, driven by legislation and fuel economy improvements. We have
also entered the Russian market and secured two good size programmes in the
diesel engineering sector and see more opportunities in this developing market.

The gasoline engine business continued to benefit from our reputation and track
record for on-time, production-ready, high quality delivery capability, with
business in passenger car, motorcycle and power generation markets.

The controls & electronics business has continued to grow and is underpinned by
interest in hybrid vehicles and pending global legislation in the areas of
on-board diagnostics and emissions. Control and Electronics is central to the
delivery of low-emissions, fuel-economic engine and transmission technology
aimed at meeting worldwide legislative and consumer demands. We continue to see
growth in this area with sustained recruitment of skilled control and
electronics engineers in the UK and the Czech Republic remaining a key priority.

The transmissions business continues to enjoy success on a global basis, with
sustained growth in the demand for advanced, fuel-efficient and
performance-enhancing technologies. The portfolio of projects continues to
expand across a wider range of sectors and now includes off-highway, military
and commercial vehicle applications in addition to the traditional automotive
products. Research investment remains focused on advanced dual clutch technology
and advanced safety performance utilising torque vectoring, a technique which
increases driving performance and safety by sharing torque between the four
wheels in real time. The motorsport transmissions business has grown its
customer base with successful programmes in Formula 1 and World Rally Car, and
has made a significant impact in the Japanese motorsport market. The business
continues to build and supply Bugatti transmissions.

The vehicle engineering business has benefited from growth in the military
sector, with the traditional mainstream activities enjoying the growing and
rapidly expanding Asian market. During the year the vehicle engineering business
has increased its emphasis on providing military vehicle system solutions in
response to the significant growth in this sector.

Following a very successful 20-month period from start-up to the successful
market introduction of vehicle and engine product in China under the Roewe
brand, the planned sale of Ricardo 2010 was successfully completed on 10 May
2007. With Ricardo support Shanghai Automotive Industry Corporation (SAIC) has,
in a remarkably short period of time, established a UK technical centre of some
250 engineers, situated at our Midlands facility. In parallel, it has developed
and introduced high quality products into the Chinese market. Ricardo's
relationship with SAIC is still flourishing, with continued outsourced business
and strategic advice.


US (including Ricardo Software)

Our US operation was profitable but underperformed in relation to our
aspirations. This was mainly due to a slow start to the year as a result of a
poor opening order book. However, major efforts were put into place to
reorganise the business to make it more customer focused, more entrepreneurial
and better aligned with the organisational structure of the rest of the Group.
This has led to an improved second half of the year and a stronger year-end
order book. Towards the end of the year, we implemented a key part of the
restructuring - the recruitment of Dean Harlow as the new President of our US
business, with a clear focus on innovation-led, value-added growth. Further
business improvements are currently being implemented. Dean Harlow is an
experienced, entrepreneurial business leader with a proven track record of
international business development in the automotive sector.

Energy security and climate change have now taken centre stage in the US debate,
providing opportunities for Ricardo to leverage its core competencies. President
Bush's '20 in 10' initiative, a 20 per cent reduction in gasoline consumption
over 10 years, is providing a new impetus for growth and diversification. We
have seen a significant growth in our US diesel business for US automotive
passenger car markets. In addition, we are seeing good opportunities in the
small engine sector and in new markets such as alternative fuels and the
electrification of the vehicle - including hybrids, plug-in hybrids and electric
vehicles. The controls & electronics business is rapidly expanding in the US
with order intake doubling in the year and we continue to recruit aggressively.
This development is due to increased electronics content in vehicles, more
complex and more efficient powertrains and the expansion into vehicle safety
improvements.

Military spending in the US market remains at record levels, with key
initiatives to advance the technology and fuel economy of tactical and support
vehicles. We continue to align our operations with military initiatives in an
effort to increase Ricardo's presence and ultimately our market share.

Ricardo Software, one of our smaller operations, which develops and
commercialises leading-edge engineering software for the automotive industry,
had a very good year, delivering higher levels of revenue and profit growth than
previously. These software products reduce time to market while improving design
robustness through accurate and validated simulation.


Germany

Our operation in Germany continues its turnaround into profitability while
maintaining its investment in growth through increasing engineering facility
capability and the recruitment of further high quality engineers. Our order
book, prospects list and client base continue to grow and develop, with
opportunities increasing in size and breadth to match our growing capabilities
and high value-added services. We continue to invest in people, facilities and
the latest tools and techniques to increase the pace of growth, especially in
some key product areas such as controls & electronics, light duty diesel,
vehicle engineering and transmissions development. Our more established product
areas of commercial vehicle diesel, production/prototyping, gasoline engineering
and testing all continued to perform well in the year as we cement our
reputation in the German market and start to capture market share. The
engineering organisation is now aligned with the group structure and we are
achieving good levels of programme sharing and joint delivery with other
divisions, which improves efficiency and delivery to the demanding German client
base.

During the year we have significantly broadened our penetration into the German
motor industry, with a growing client base within the premium OEMs and Tier 1
players in all automotive industry sectors (motorcycle, off-highway, commercial
vehicle, marine and passenger car). We are now a well recognised and accepted
part of the high-end engineering services sector, increasingly bidding for, and
winning, complete turnkey multi-million Euro projects.


Asia

Japan: Business for Technical Consulting from the globally important and
successful Japanese client base continues to grow as a result of our increased
presence through our Japanese office. In the year we have secured sizeable
turnkey outsourced programmes from highly demanding clients as they move to a
model of increased outsourcing. In a market which is led by relationship,
innovation and delivery, it is pleasing to see that investments over many years
in terms of technology and local presence have built us a good platform from
which to exploit this significant move.

Transmissions, diesel and electronics were particularly successful areas this
year, with order intake tripling compared to the orders we saw last fiscal year.
To further increase our support to the clients we have relocated our Japanese
office to gain better access to our customers' R&D facilities and to improve our
service levels. The core of the work was conducted in the UK and US.

China: In the year we have transitioned from a sales to an engineering office
and have moved into larger premises as we recruit local engineering talent. The
technical centre in Shanghai has been well received by clients and we are now
delivering engineering services from this WOFE (Wholly Owned Foreign
Enterprise). In addition to the Chinese domestic brand companies we are now
demonstrating the benefit of our presence to our established Western customers
as they look to engineer systems either for China or with their Chinese
partners. Several new companies have joined the Ricardo client base this year,
yet we are also seeing high levels of follow on business from existing
customers, seeking to become truly world class by accessing leading-edge
technology and realise the value that Ricardo offers. Gasoline engineering and
hybrid technology remain key activities in China; however, we have also added
vehicle and transmissions programmes to the portfolio.

India: We have increased our business levels and presence on the ground and will
be formally opening an office in November 2007.


Strategic Consulting

Following two years of very rapid growth, as anticipated, the year started
slowly as we successfully completed and ramped down major projects from the
prior year and focused on building more diversified business streams. As a
result, a number of new high quality clients were added to our customer
portfolio whilst our work in support of our existing clients continued. Our
services for business strategy, acquisition support, business turnaround and
business performance improvement continue to be valued and in demand by
investors, vehicle manufacturers and suppliers.

We have extended our client base in both diversity and geographic reach, adding
major commercial vehicle manufacturers in Europe and Asia as well as off-highway
manufacturers and suppliers in North America. In the year we have undertaken our
first strategic projects for clients in China and Korea whilst adding additional
clients to our customer portfolio in the expanding market in India.

As the ownership structure of the automotive industry changes particularly in
the supply base, our strategy consultants have become very active in providing
consulting services to companies and institutional investors in Europe and North
America both pre and post acquisition. Our deep knowledge of the industry makes
us an ideal partner for evaluation of companies and improving their businesses
post acquisition. In addition our activity in support of Asian investors looking
towards growth in more mature markets continues to increase.

We continue to invest in our service offerings to ensure that we remain at the
forefront of thought leadership in the industry and have the solutions to
address some of the industry's most critical issues. As a result, our service
offerings have now been extended to fuels and oils companies together with
established companies as well as new investors looking at the impacts of new
energy on the industry. We see this interest as a growing driver of new activity
in the sector.

The offering of deep-content management consultancy focused upon delivering
tangible results is well received and valued by our clients and remains unique.
We continue to take business from the more traditional management consulting
firms and this, together with the diversification of our clients and service
offerings, will generate growing demand.


Research and Development

Research planning is a key element in Ricardo business strategy. A sophisticated
process is used to guide and analyse internal investments to create added-value
technologies with clear benefits. This process has proved popular with our
customers, creating a premium service that can support research and product
roadmap planning.

The key global driver for the majority of Ricardo research has been the demand
for lower carbon emissions; a demand which directly translates into improved
fuel efficiency. The European Commission has recently announced plans to mandate
lower fleet average fuel consumption from passenger cars sold in member states.
A similar pattern is emerging in the United States, where the government is also
now proposing a more regulated approach to lower fuel consumption in road
transport. Japan, too, has set targets for improved fuel economy by 2010 and has
also been the first to introduce fuel economy legislation for heavy-duty
vehicles.

Another key driver that has been growing in priority for a number of years has
been safety and security. Around 30-40,000 people are killed in road traffic
accidents in both Europe and the US every year. Even more fatalities occur in
developing countries such as China and India. There is no simple solution to
improved safety: however, an integrated approach to driver training, road design
and vehicle technology is emerging as the most likely approach to deliver real
improvements. This has driven a need for so-called smart vehicles that can
interact more intelligently with the driver and surrounding infrastructure and
traffic, reducing travel times caused by congestion and also reducing the risk
of collisions.

Most internally funded research at Ricardo now attracts collaborative support
from automotive customers and sometimes involves additional government grant
funding from the United States, Europe or the UK. The combined R&D programme at
Ricardo is organised into a portfolio of Technology Platforms. These platforms
align with key product areas and allow a more integrated approach. They have
delivered some excellent results during the past year:

   •    Following on from initial single-cylinder tests, our low-NOx heavy duty
        diesel engine programme has now delivered emissions from a prototype
        multi-cylinder engine consistent with the Euro 6 requirements scheduled 
        for 2013, using a very advanced, flexible fuel injection system.

   •    Our programme to develop an advanced light duty diesel combustion system
        compatible with the Tier 2 emissions requirements in the US has also 
        made very good progress and has now been implemented in a driveable 
        vehicle. This combines an innovative gas exchange system and advanced 
        combustion and after treatment systems to deliver the minimum-cost 
        solution for US Tier 2 standards. This programme has proved to be a key 
        factor in developing customer programmes in this field.

   •    Our fuel-efficient gasoline programme includes a switching 2-stroke to
        4-stroke boosted gasoline engine targeting a 25 per cent improvement in
        vehicle fuel consumption. This has been implemented in a 2-litre V6
        configuration with a camless, Ricardo-designed electro-hydraulic valve
        actuation system and specially modified engine management hardware. A
        collaborative programme with Robert Bosch in the United States has also
        delivered a downsized boosted twin-turbocharged direct injection V6 
        engine installed in a Cadillac CTS. This has delivered a 10 per cent 
        improvement in fuel economy compared with a conventional powertrain.

   •    Our process to production platform includes a programme to create a
        virtual engineering tool set for low-emissions diesel vehicles. This
        collaborative programme has enabled the release of the first version of
        software that links analysis process together into a more seamless 
        system. The first release of our engine simulation model that can run 
        in real time as an engine controller has also been completed.

   •    The first year of our collaborative European-funded programme to support
        planning of future hydrogen communities has also been completed. This 
        has included analysis of hydrogen and fuel cell research drivers and 
        funding sources in collaboration with the European Investment Bank.

   •    Our integrated safety platform has delivered a new active torque
        vectoring unit, varying the torque from left to right rear wheels under
        electronic control in an Audi A6 demonstration vehicle. This patented
        technology has been very successfully demonstrated to customers and has
        created very good opportunities for Ricardo in this market.


People

With the prime purpose of supporting Ricardo's strategic goals over the next few
years, a number of senior management changes occurred in the last year.
Decisions are taken on the basis of continually reviewing the quality of
existing management and making changes where improvement is necessary, where new
skills are required or when increasing resource is necessary through growth.
Internal development is the preferred route to appointments: external
appointments are only made where there is a lack of suitable internal
candidates.

Paula Bell joined Ricardo in October 2006, took up her appointment as Group
Finance Director in November 2006 and has strengthened the finance function with
a number of external Finance Director appointments to support UK divisions,
Germany and Asia.

In the USA it was felt necessary to make a change in leadership to further
enhance its business development focus. Dean Harlow was appointed externally in
May 2007 to replace Jeremy Holt, who left the company at the same time.

To reinforce the significance of IT to Ricardo's strategy, a new Group IT
Director, Manvinder Singh, was appointed externally in May. Malcolm Greenslade,
Group HR Director, will be retiring in September 2007 and Sarah Murphy joined in
August as his replacement. To provide greater co-ordination of Ricardo's Global
Product Groups, Mark Garrett was appointed Group Engineering and Products
Director after successfully managing the Ricardo 2010 project.

In Germany, Detlev Baudach, who had been Managing Director for seven years,
resigned for personal reasons and to take up another appointment; he has been
replaced by Dr Peter Heuser, who has successfully grown our Heavy Duty Diesel
business and has been a catalyst for growth in Germany.


Conclusion/Outlook

This year Ricardo finished with a strong order book, increased management
strength and an exciting pipeline of technology. Trading performance was in line
with expectations despite restructuring costs in the US and weaker performance
in our US and Strategic Consulting operations overall. Our strategy to broaden
the business mix and concentrate on margins, not just revenue, for the work that
we undertake has resulted in continued development of the profitability of the
business.

The global automotive industry is active with new product offensives  driven by
stringent emissions legislation, desire to improve fuel economy and the need to
reduce CO2 emissions.  Ricardo is benefiting by having the strategy, technology
and presence to exploit these regions' growing demands and global industry
drivers.

We have had a satisfactory start to the new financial year, benefiting from the
strong order book and continued good order intake. The continuing delivery of
our strategy to increase geographic, customer and sector spread, together with
the implementation of a US business improvement plan, gives us confidence for
continued progress in the new financial year.


Dave Shemmans
Chief Executive Officer
17 September 2007


Consolidated Income Statement
for the year ended 30 June 2007

                                                      2007      2006
Continuing operations                      Notes       £m        £m
--------------------------------------------------------------------
Revenue                                    2          171.5    171.9
Operating profit                           2           13.2     15.8
--------------------------------------------------------------------
Operating profit excluding
pensions credit (underlying)                           13.2     12.1
Pensions credit                                          -       3.7
--------------------------------------------------------------------

Finance income                                          2.0      1.4
Finance costs                                          (3.0)    (2.7)

--------------------------------------------------------------------
Profit before taxation                                 12.2     14.5
---------------------------------------------------------------------
Profit before tax excluding
pensions credit (underlying)                           12.2     10.8
Pensions credit                                           -      3.7
---------------------------------------------------------------------

Taxation                                                2.9     (2.3)
---------------------------------------------------------------------

Profit for the year                                    15.1     12.2
---------------------------------------------------------------------
Profit for the year excluding
pensions credit (underlying)                           15.1      9.6
Pensions credit                                           -      2.6
---------------------------------------------------------------------

Profit attributable to minority                        
interest                                                0.1      0.1
Profit attributable to equity                         
shareholders                                           15.0     12.1
---------------------------------------------------------------------
Earnings per ordinary share
Basic                                    3             29.6p    24.0p
Diluted                                                29.5p    23.9p
---------------------------------------------------------------------



Consolidated Statement of Recognised Income and Expense
for the year ended 30 June 2007


                                                      2007      2006
                                                       £m        £m
--------------------------------------------------------------------
Currency translation differences on net investment
in foreign operations                                (1.5)      (0.2)  
Fair value gain/(loss) on net investment hedge        0.4       (0.4)
Actuarial gains on the defined benefit pension        
scheme                                                4.2        6.7
Tax on actuarial gains on the defined benefit        
pension scheme                                       (1.7)      (2.0)
--------------------------------------------------------------------
Net income and expense recognised directly in        
equity                                                1.4        4.1
Profit for the financial year                        15.1       12.2
--------------------------------------------------------------------
Total recognised income and expense for the year     16.5       16.3
--------------------------------------------------------------------
Attributable to minority interest                     0.1        0.1
Attributable to equity shareholders                  16.4       16.2
--------------------------------------------------------------------



Consolidated Balance Sheet
as at 30 June 2007


                                                    2007      2006
                                                     £m        £m
------------------------------------------------------------------
Assets
Non current assets
Goodwill                                            15.6      15.9
Other intangible assets                              1.9       1.5
Property, plant and equipment                       44.5      45.2
Deferred tax assets                                  9.9       8.7
------------------------------------------------------------------
                                                    71.9      71.3
------------------------------------------------------------------
Current assets
Inventories                                          7.5       7.0
Trade and other receivables                         55.6      47.3
Current taxation                                     0.5       0.2
Deferred tax assets                                  1.7       0.6
Cash and cash equivalents                           15.4      49.8
Assets classified as held for sale                    --       7.5
------------------------------------------------------------------
                                                     80.7    112.4
------------------------------------------------------------------
Total assets                                        152.6    183.7
------------------------------------------------------------------

Liabilities
Current liabilities
Bank loans and overdrafts                            (9.1)   (45.0)
Trade and other payables                            (43.9)   (38.9)
Current tax liabilities                              (2.1)    (2.5)
Deferred tax liabilities                             (0.4)    (0.6)
Provisions                                           (0.5)    (0.5)
Liabilities directly associated with
assets classified as held for sale                      -     (7.5)
------------------------------------------------------------------
                                                    (56.0)   (95.0)
------------------------------------------------------------------
Net current assets                                   24.7     17.4
------------------------------------------------------------------

Non current liabilities
Bank loans                                          (13.5)   (10.6)
Retirement benefit obligations                      (16.7)   (23.6)
Deferred tax liabilities                             (4.7)    (4.4)
------------------------------------------------------------------
                                                    (34.9)   (38.6)
------------------------------------------------------------------
Total liabilities                                   (90.9)  (133.6)
Net assets                                           61.7     50.1
------------------------------------------------------------------

Shareholders' equity
Share capital                                        12.7     12.7
Share premium                                        13.3     13.3
Other reserves                                       (0.5)     0.6
Retained earnings                                    35.7     22.9
------------------------------------------------------------------
Total shareholders' equity                           61.2     49.5
Minority interest in equity                           0.5      0.6
------------------------------------------------------------------
Total equity                                         61.7     50.1
------------------------------------------------------------------



Consolidated Cash Flow Statement
for the year ended 30 June 2007



                                                     2007       2006
                                          Notes       £m         £m
--------------------------------------------------------------------
Cash flows from operating activities
Cash generated from/(used by) operations  4          15.6      20.0
Interest received                                     2.0       1.4
Interest paid                                        (3.0)     (2.7)
Tax (paid)/refunded                                  (1.6)     (1.4)
--------------------------------------------------------------------
Net cash from operating activities                   13.0      17.3
--------------------------------------------------------------------

Cash flows from investing activities
Proceeds of sale of property, plant and                
equipment                                               -       0.3
Purchase of intangible assets                        (1.0)     (1.1)
Purchase of property, plant and equipment            (8.5)     (7.3)
Intra group transfers of fixed assets                   -         -
--------------------------------------------------------------------
Net cash (used)/received in investing                
activities                                           (9.5)     (8.1)
--------------------------------------------------------------------

Cash flows from financing activities
Net proceeds from issue of ordinary share              
capital                                                 -       1.3
Net proceeds from issue of new bank loan              3.9         -
Repayment of borrowings                              (2.1)     (0.5)
Dividends paid to shareholders                       (4.9)     (4.6)
Dividends paid to minority interests                 (0.1)        -
--------------------------------------------------------------------
Net cash (used)/received in financing                
activities                                           (3.2)     (3.8)
--------------------------------------------------------------------

Effects of exchange rate changes                     (0.3)     (0.5)
--------------------------------------------------------------------
Net increase/(decrease) in cash and cash               
equivalents                                             -       4.9
Cash and cash equivalents at 1 July                  12.7       7.8
--------------------------------------------------------------------
Cash and cash equivalents at 30 June                 12.7      12.7
--------------------------------------------------------------------

At 1 July
Cash and cash equivalents                            49.8      28.8
Bank overdrafts                                     (37.1)    (21.0)
--------------------------------------------------------------------
                                                     12.7       7.8
--------------------------------------------------------------------

At 30 June
Cash and cash equivalents                            15.4      49.8
Bank overdrafts                                      (2.7)    (37.1)
--------------------------------------------------------------------
                                                     12.7      12.7
--------------------------------------------------------------------



Notes to the financial statements
for the year ended 30 June 2007


1 Basis of preparation

This preliminary announcement has been prepared on the basis of the accounting
policies as set out in the financial statements for the year ended 30 June 2007,
which have been prepared in accordance with International Financial Reporting
Standards ('IFRS') and International Financial Reporting Interpretations
Committee ('IFRIC') interpretations endorsed by the European Union ('EU') and
with those parts of the Companies Act 1985 applicable to companies reporting
under IFRS. The financial information herein does not amount to full statutory
accounts within the meaning of section 240 of the Companies Act 1985 (as
amended).


2 Segmental reporting


a) By business segment, with revenue reflecting sales to external customers


All from continuing             Technical          Strategic          Total
operations                      Consulting         Consulting
                              2007     2006      2007     2006     2007   2006
                               £m       £m        £m       £m       £m     £m
-------------------------------------------------------------------------------
Revenue earned               163.6     158.0      7.9      13.9    171.5  171.9
Adjustment for
inter-segmental revenue       (0.6)     (3.8)     0.6       3.8        -      -
-------------------------------------------------------------------------------
                             
Revenue from third parties   163.0     154.2      8.5      17.7    171.5  171.9
-------------------------------------------------------------------------------

Segment result (before
pensions credit)              11.9       9.5      1.3       2.6     13.2   12.1                             
Pensions credit                                                        -    3.7
-------------------------------------------------------------------------------
Operating profit                                                    13.2   15.8
Finance income                                                       2.0    1.4
Finance costs                                                       (3.0)  (2.7)
-------------------------------------------------------------------------------
Profit before tax                                                   12.2   14.5
Tax                                                                  2.9   (2.3)
-------------------------------------------------------------------------------
Profit for the year                                                 15.1   12.2
-------------------------------------------------------------------------------



b) By division, reflecting the revenue and profit generated by the staff in
those businesses



                                               Revenue earned      Operating
                                                                  profit (1)
                                                2007     2006     2007    2006
                                                 £m       £m       £m      £m
-------------------------------------------------------------------------------
Technical Consulting
UK (2)                                         102.0     95.0     9.8     7.8
US (2)                                          37.4     38.9     1.2     2.2
Germany                                         24.2     24.1     0.9    (0.5)
-------------------------------------------------------------------------------
                                               163.6    158.0    11.9     9.5
Strategic Consulting                             7.9     13.9     1.3     2.6
-------------------------------------------------------------------------------
                                               171.5    171.9    13.2    12.1
-------------------------------------------------------------------------------



(1) Excluding a pensions credit of £3.7m in the year ended 30 June 2006

(2) Restated to include within the UK the overseas offices serving the UK, and
    for the re-classification of an immaterial subsidiary
    

3 Earnings per share

Basic earnings per share is calculated by dividing the earnings attributable to
ordinary shareholders by the weighted average number of shares outstanding
during the year, excluding those held by an employee benefit trust for the LTIP
which are treated as cancelled for the purposes of the calculation.

For diluted earnings per share, the weighted average number of ordinary shares
in issue is adjusted to assume conversion of all dilutive potential ordinary
shares. The Company has one class of dilutive potential ordinary shares: those
options granted to employees where the exercise price is less than the market
price of the Company's ordinary shares during the year. Where it is not possible
to determine whether or not the performance criteria for the award to vest have
been met until the end of the performance period, the shares are excluded from
the calculation.

Reconciliations of the earnings and the weighted average number of shares used
in the calculations are set out below.


                                              2007           2006
                                               £m             £m

Earnings                                      15.0           12.1
Pensions credit                                  -           (2.6)
-----------------------------------------------------------------
Underlying earnings                           15.0            9.5
-----------------------------------------------------------------

Average number of shares in issue           Number of     Number of
                                             shares         shares
                                            millions       millions


                                              50.7           50.4
Effect of dilutive options                     0.1            0.1
-----------------------------------------------------------------
Diluted average number of shares in issue     50.8           50.5
-----------------------------------------------------------------

                                            Per Share     Per Share
                                             amount         amount
                                              pence         pence

Earnings per share
Basic                                         29.6           24.0
Diluted                                       29.5           23.9
Underlying earnings per share
Basic                                         29.6           18.8
Diluted                                       29.5           18.8
-----------------------------------------------------------------



4 Cash flow from operating activities


                                                   2007           2006
                                                    £m             £m
----------------------------------------------------------------------
Continuing operations
Profit from operations before pensions credit      13.2           12.1
Adjustments for:
Share based payments adjustment                     0.2            0.3
Depreciation and amortisation                       8.8            9.0
----------------------------------------------------------------------

Operating cash flows before movements

in working capital                                 22.2           21.4
Increase in inventory                              (0.5)             -
Increase in trade and other receivables            (9.3)          (4.3)
Increase in payables                                5.9            3.5
Increase in provisions                                -            0.1
Pension payments in excess of pension costs        (2.7)          (0.7)
----------------------------------------------------------------------
Cash generated by operations                       15.6           20.0
----------------------------------------------------------------------



                      This information is provided by RNS
            The company news service from the London Stock Exchange