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Skillsgroup PLC (QA.)

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Thursday 03 February, 2000

Skillsgroup PLC

Final Results - Year Ended 30 November 1999

Skillsgroup PLC
3 February 2000


                       Skillsgroup plc

  Preliminary Results for the year ended 30th November 1999
                              
Highlights

Skillsgroup,  a  leading provider of information  technology
services, is pleased to announce the following:

*  Turnover from continuing businesses increased by 22.4% to
£198.7m (1998: £162.3m)

*  Profit before tax for continuing operations* increased by
27.9% to £16.5m (1998: £12.9m)

*  Adjusted* earnings per share increased by 29.1% to  14.2p
(1998:  11.0p).  Basic earnings per share were 10.8p  (1998:
12.5p)

*  Total dividend increased by 14% to 5.7p per share  (1998:
5.0p)

*   Acquisitions  well  established  within  the  group  and
creating significant new opportunities

*   Announcement   of   E-Business  initiatives,   including
qaglobal.com


*   adjusted  to exclude exceptional charges  of  £2.7m  and
goodwill amortisation of £2.4m

Commenting  on  the  results,  David  Southworth,  Executive
Chairman said:

'The  results announced today confirm that we have continued
to  grow  the  business  successfully  despite  the  extreme
conditions   created   by  the  Year  2000   'microclimate'.
Following  the  restructuring and integration  processes  of
1999  our businesses are very strongly positioned to exploit
expected profitable growth opportunities.'

'During  1999  we have invested in our internet capabilities
and we are now in a position to announce key elements of our
e-commerce   initiatives,  which   will   further   position
Skillsgroup and especially QA Training as a global leader in
the provision of leading edge IT skills.'

For further information, please contact:

Skillsgroup plc           
  
David Southworth,            on 3rd Feb 2000: 0171 253 2252
Executive Chairman                 thereafter: 01625 591200
Colin Gibson, Finance Director        www.skillsgroup.co.uk

Ludgate Communications Ltd  
                  
Reg Hoare / Edward Macquisten                 0171 253 2252


Chairman's Statement


Introduction

1999  was  a year of considerable achievement for the  Group
with  four important acquisitions at a total cost  of  £81.7
million   marking  a  further  significant  stage   in   the
transition  to  a  high  quality, high margin,  skills-based
business.  The acquisitions are well established within  the
Group  and  we  now  have  three operating  businesses  with
distinct branding and strong market positions.

The  acquisition  and integration process  has  taken  place
against a trading environment in the second half of the year
made  more  difficult for most IT businesses by the  extreme
conditions created by the Y2K 'microclimate'.  We  issued  a
statement  on  1  October 1999 highlighting the  effects  of
these  conditions  on our business.  Our  results  announced
today are in line with that announcement and confirm that we
have continued to grow the business successfully despite the
external difficulties.

During  1999  we have invested in our internet  capabilities
and we are now in a position to announce key elements of our
e-commerce   initiatives,  which   will   further   position
Skillsgroup and especially QA Training as a global leader in
the provision of leading edge IT skills.

Business Performance and Acquisitions

Skillsgroup

The   overall  performance  of  continuing  businesses   was
encouraging  with turnover increasing by 22.4%  from  £162.3
million  to £198.7 million, profits before tax, adjusted  to
exclude  exceptionals  and goodwill amortisation  ('adjusted
profits')  increasing by 27.9% from £12.9 million  to  £16.5
million and adjusted eps increasing by 29.1% from 11.0 pence
to  14.2  pence.   After a particularly strong  first  half,
trading proved more difficult than anticipated in the second
half of the year, traditionally the period which contributes
most  to  the  Group's profits.  Two trends were  evident  -
firstly  a  number  of major corporates postponed  large  IT
development  projects  into the  new  year,  in  some  cases
deferring  related  training requirements  and  secondly,  a
number  of businesses, particularly in the finance  and   IT
services sectors, cut back on discretionary spending.

Resource Management - QA Group

In  the  year  ended  30 November 1999, QA  Group  increased
operating  profits before exceptional charges  and  goodwill
amortisation by 31.3% from £8.3 million to £10.9 million  on
turnover which was up 10.9% at £104.9 million, including all
acquisitions.   Within these overall figures, QA  Training's
turnover  increased by 44.8% while QA Myriad,  our  staffing
business, showed turnover down by 4.0%.  The effect  of  the
acquisitions  and  of measures taken to improve  utilisation
and   efficiency  meant  that  QA  Training's  profitability
improved significantly with an excellent operating margin of
18.2%  against  15.6% last year.  As a result  of  difficult
trading conditions, QA Myriad's operating margin was down to
5.2%  compared with 5.8%.  Steps were taken during the  year
to  reduce  overheads significantly as part of a refocus  of
the  business into specialist skills and the staffing  needs
of the Group's own businesses.

The  acquisitions  in  March and April respectively  of  The
Knowledge Centre and Cap Gemini's UK Training business  have
created  significant  new  opportunities  for  QA  Training.
During  1999  we  estimated that  the  market  size  for  IT
training  was £550 million.  In terms of market position  QA
is now the clear market leader with an 8% market share of IT
Technical  and Professional training.   QA now  supplies  an
unrivalled  portfolio of approximately 400 courses  covering
both  the  technical  courses for which  it  already  had  a
leading  reputation,  as  well as  the  professional  skills
courses for which Cap Gemini's training operation had  great
recognition.    The  Knowledge  Centre  added   a   set   of
specialised  courses  and  expertise  in  the  fast  growing
telecommunications sector.

Consulting - Pontis Consulting

Pontis  traded well in the period immediately following  its
acquisition  in  March then faltered slightly  against  high
expectations  during  late  summer  as  some  major  clients
imposed budget constraints on their IT departments.  In  the
last  quarter the business started to pick up momentum again
and is now strongly placed as it goes into the new financial
year.   Combined with QA Consulting, which had a good  year,
the  total  result  for  the  Consulting  division  was   an
operating  profit before exceptionals and goodwill  of  £3.2
million on turnover of £13.3 million at a margin  of  24.1%.
This  compares with a profit of £0.7 million on £5.1 million
of turnover for QA Consulting alone in 1998.

Pontis  has brought an important new dimension to the  Group
with technical consulting expertise of the highest level  in
the  niche area of distributed systems migration.  Operating
principally in the financial sector,  the business works  at
a  strategic  level with a small number of  large  customers
delivering   the   highest  quality  of   service.    Within
Skillsgroup, the business has significant potential to  grow
its  customer  base and its business consulting capabilities
and  following  the recently completed integration  with  QA
Consulting   it   is   ready  to  take  advantage   of   the
opportunities currently in the marketplace.

Enterprise Solutions - Acuma Group

Acuma  reported  a  reduction in  operating  profits  before
exceptionals and goodwill from £4.1 million to £3.2  million
despite  a  turnover increase from £62.6  million  to  £80.5
million  resulting from strong hardware sales in  the  first
half  of  the  year.  However, the higher  margin  solutions
businesses proved vulnerable to the Y2K downturn  due  to  a
lack of critical mass.  This weakness has now been addressed
through  the acquisition of GA Information Systems ('GAIS'),
the  disposal  of our small Swedish subsidiary Synergica  AB
and  the  subsequent  integration and restructuring  of  the
business.

Acuma's solution offering is now based on a model which aims
to  help  customers  Access, Deploy and Exploit  information
within  their organisations.  The acquisition  late  in  the
year of GAIS, in combination with the acquisition of ISL  in
November  1998,  gives  Acuma  true  critical  mass  in  the
knowledge  management solutions market.  Both GAIS  and  ISL
have  leading  positions  in  the  market  for  implementing
business  intelligence tools.  These tools and the templates
developed  from  them  commonly using  web-based  technology
interfaces,  pull  information from a  client's  system  and
allow  it  to  be  analysed, collated  and  presented  in  a
meaningful way before distribution to selected users.

Financial Position, Gearing

The  acquisitions made during the year had a total  cost  of
£81.7 million including a related cash and borrowings impact
of  £61.2  million.  Positive cashflow from  operations  has
limited  our  year  end  net  borrowings  to  £20.4  million
(compared  with  net cash of £34.1 million  at  30  November
1998),  a  position  which still leaves  us  with  a  strong
balance sheet, particularly with the cash generative  nature
of our businesses.  Year end gearing was 27% compared with a
net cash surplus in 1998.  Shareholders funds have increased
from £52.6 million to £74.6 million.  The Group remains in a
position  to  make  further acquisitions should  appropriate
opportunities be identified.

Dividend

The  Board is recommending that the final dividend  for  the
year ended 30 November 1999 should be increased by 14.3%  to
4.0p  per  share compared with 3.5p in 1998.  This makes  an
overall total of 5.7p for the year, a 14% increase on  1998.
The  final  dividend will be payable on  15  April  2000  to
shareholders on the register at 10 March 2000.

E-business Initiatives

Following  a  review  across  the  Group  on  how  all   our
businesses   should  address  the  changes  in  the   market
resulting  from  the impact of web-based  technologies,  the
Board has identified a number of major opportunities.  These
will  require  a  short  term investment  of  between  £8-10
million over the next 12 to 15 months and will allow  us  to
accelerate the pace of change and stake a much greater claim
in  the web-based markets of the future.  We are prepared to
invest  in  order  to establish a leading  position  in  our
chosen markets.

In  our  view  the winning companies of the future  will  be
those  that  translate a successful formula  in  traditional
business practice into a coherent combination of 'clicks and
mortar'   i.e.  web-based  business  linked  to  traditional
brands, content and infrastructure.

qaglobal.com

We  aim  to  take QA Training's leading market  position  in
instructor-led  IT training and use its brand  strength  and
intellectual  capital to develop and deliver best  of  breed
web-based  learning content.  Based around  qaglobal.com,  a
new  company and an addition to the web site from  which  we
already  sell  courseware  internationally,  we  intend   to
develop  a  number  of  potential  opportunities,  including
partnerships,  in  delivering  web-based  learning  content.
These opportunities will include delivery of courseware  and
related  products  and  services  developed  by  others  not
necessarily  limited to IT content.  We have partnered  with
the   UK   subsidiary  of  a  leading  US  based  e-commerce
consultancy to assist us with this process.

QA Training Business to Business

We  also  intend  to  transform the  way  IT  technical  and
professional  training is booked, paid for and delivered  in
the  UK.   We have a successful pilot extranet-based booking
system  which  is operating with a major customer  which  we
will further develop and extend.  This system already allows
IT  staff to view course availability directly and  book  in
real-time  using  QA's own systems.  This facility  will  be
available for all of QA's customers by the end of this year,
producing  considerable efficiencies for both  the  customer
and  for  QA Group.  We will be adding features during  2000
which  will enhance our volumes and competitiveness  through
interactive  trading with our customers.  We  are  confident
that   these   measures   will   materially   increase   the
profitability of this business.

Acuma Solutions

In  the knowledge solutions arena we are evolving a strategy
based  around  information portals which will soon  go  into
full  implementation for business to business  applications.
These  extend traditional business intelligence applications
to  enable  the deployment of information within a  business
across   its  own  intranets  and  potentially  also  across
extranets  to  its customers and suppliers.  These  software
applications are already at production stage with some sales
achieved  and  we will be making investment to  package  and
market  them more aggressively in 2000 as part of a  further
drive to achieve a genuine solutions focus.

Skillsgroup Board

Following  the  acquisitions made during the  year  and  the
addition of our new Consulting division, based around Pontis
Consulting,  Charles  Grant, the managing  director  of  the
division  and  David Ince, the managing director  of  Acuma,
joined  the  main  board in December  1999.   Claes  Hofmann
resigned  from  the  Board  in  October,  after  leading   a
management  buyout  of  Synergica  AB,  our  small   Swedish
solutions  business.  We wish him well  in  the  future  and
thank him for his contribution to the progress of the Group.
The  Board now comprises five executive directors -  myself,
the Group finance director and the managing directors of the
three  operating divisions - along with three  non-executive
directors.

Employees

Our  employees have played a key role in our progress during
what has been a year of transformation.  I am delighted with
the  positive  response of our staff, new and  old,  to  the
challenges   of   the   acquisitions  and   the   subsequent
integration processes.  Over 50% of our staff have taken the
opportunity  during the year to participate in  the  Group's
new  savings-related share option scheme and I look  forward
to seeing them benefit as the Group makes progress.

Current Trading and Prospects

The current year has started off better than expected in  QA
Group,  satisfactorily in Pontis Consulting and  lower  than
expected in Acuma.  As a result of the previously identified
Y2K  effect,  our  first quarter financial results  will  be
lower  than  last  year  but  will  be  in  line  with   our
expectations.   There is likely to be a material  change  to
the  mix  of  profits between the first  and  second  halves
reflecting the expected recovery in IT spend.

Despite this short term situation, we remain optimistic  for
the  year  as a whole and for future years.   Following  the
restructuring  and  integration  processes  of   1999,   our
businesses are very strongly positioned to exploit  expected
profitable growth opportunities.

David R Southworth
Chairman
3 February 2000
                              
                              
                       
                              
      Consolidated Profit and Loss Account (Unaudited)

                                           1999      1998
                                  Notes      £m        £m

Turnover

Continuing operations
Existing                            1     187.7     162.3
Acquisitions                        1      11.0         -
                                        _________________

                                          198.7     162.3

Discontinued operations             1         -      46.1
                                        _________________

                                          198.7     208.4
                                        _________________
Operating profit

Continuing operations
Existing                            1       9.5      12.2
Acquisitions                        1       1.5         -
                                        _________________

                                           11.0      12.2

Discontinued operations             1         -       0.2
                                        _________________

                                           11.0      12.4


Exceptional profit on disposal of
  businesses                                  -       0.3
Provisions made in prior periods              -       0.7
                                        _________________

                                              -       1.0

Profit on ordinary activities
  before interest                          11.0      13.4
Net interest receivable                     0.4       1.0
                                        _________________
Profit on ordinary activities
  before taxation                          11.4      14.4

Tax on profit on ordinary activities       (2.1)     (4.2)
                                        _________________


Profit on ordinary activities
  after taxation                            9.3      10.2
                                        _________________

Dividends                                  (5.0)     (4.1)
                                        _________________

Transfer to reserves                         4.3      6.1
                                        _________________

Basic earnings per share            3       10.8p    12.5p
                                        _________________

Fully diluted earnings per share    3       10.7p    12.3p
                                        _________________

Adjusted earnings per share *       3       14.2p    11.0p
                                        _________________

Adjusted fully diluted earnings
  per share *                       3       14.1p    10.9p
                                        _________________


*  adjusted to exclude discontinued operations, exceptional
items and goodwill amortisation

There are no recognised gains or losses other than the
profit for the year.
                              
                              
                       
                              
           Consolidated Balance Sheet (Unaudited)

                             1999   1999      1998     1998
                               £m     £m        £m       £m

Fixed assets

Intangible assets                   78.5                 -
Tangible assets                     17.6               17.3
                                  ______              _____

                                    96.1               17.3
                                  ______              _____

Current assets

Stock                         0.9              1.9
Debtors                      48.3             37.1
Cash at bank and in hand      3.6             35.4
                           ______            _____

                                    52.8               74.4
Creditors - amounts due
  within one year

Borrowings                  (17.9)            (0.7)
Other creditors             (47.6)           (32.8)
                           ______            _____

                                   (65.5)             (33.5)
                                  ______              _____

Net current (liabilities)
  /assets                          (12.7)              40.9

Total assets less current
  liabilities                       83.4               58.2

Creditors - amounts due
  after one year

Borrowings                   (6.1)            (0.6)
Other creditors              (1.2)            (0.5)
                           ______            _____
 
                                    (7.3)              (1.1)

Provisions for liabilities
  and charges                       (1.5)              (4.5)
                                  ______              _____

Net assets                          74.6               52.6
                                  ______              _____

Capital and reserves

Called up share capital              8.8                8.2
Deferred share capital               4.6                 -
Share premium                       44.5               32.2
Other reserves                       1.5                1.3
Profit and Loss account             15.2               10.9
                                  ______              _____

Equity shareholders' funds          74.6               52.6
                                  ______              _____

                              
                              
                       
                              
         Consolidated Cashflow Statement (Unaudited)


                                            1999       1998
                                              £m         £m

Reconciliation of operating profit to
net cash flow from operating activities

Operating profit                            11.0       12.4
Goodwill amortisation                        2.4         -
Depreciation                                 3.7        2.5
Profit on fixed assets disposals            (0.2)        -
Decrease in stock                            1.0        2.4
Increase in debtors                         (1.6)      (4.6)
Increase/(decrease) in creditors             0.4       (9.7)
Decrease in provisions                      (0.5)      (6.6)
                                          _________________

Net cash inflow/(outflow)
  from operating activities                 16.2       (3.6)
                                          _________________


Consolidated cash flow statement            1999       1998
                                              £m         £m


Net cash inflow/(outflow)
 from operating activities                  16.2       (3.6)

Returns on investments and
 servicing of finance

Net interest received/(paid)                 0.9        1.0

Taxation
Corporation tax paid                        (3.5)      (1.6)

Capital expenditure and
 financial investment

Purchase of fixed assets                    (3.4)      (3.5)
Fixed assets disposals                       0.4        0.4
                                          _________________

                                            (3.0)      (3.1)

Acquisition and disposals

Acquisition of businesses
- total impact on net cash/ borrowings     (61.2)      (1.4)
- increase in borrowings
  (excluding overdrafts)                    22.5          -
Cash outflow from acquisitions
(including net cash acquired of
 £3.2 million)                             (38.7)      (1.4)

Disposal of businesses                       0.2       53.7
                                          _________________

                                           (38.5)      52.3

Equity dividend paid                        (4.4)      (3.6)
                                          _________________

Net cash outflow before financing          (32.3)      41.4
                                          _________________



                       
                            Notes

1. Segmental report

The  analysis of turnover and operating profit  by  business
group is as follows:


                             1999       1998
                         Turnover   Turnover
                                                    Before
                                               Exceptional
                                                   Costs &
                                                  Goodwill
                                              amortisation
                               £m         £m            £m

Continuing operations

Resource management

- existing                  103.1        94.6         10.4
- acquired                    1.8           -          0.5
                            _______________________________

                            104.9        94.6         10.9

Enterprise Solutions

- existing                   79.5       62.6           3.1
- acquired                    1.0          -           0.1
                            _______________________________

                             80.5       62.6           3.2

Consulting

- existing                    5.1        5.1           0.8
- acquired                    8.2          -           2.4
                            _______________________________

                             13.3        5.1           3.2

Discontinued operations         -       46.1             -
                            _______________________________

Before central costs        198.7      208.4          17.3

Central costs

 - base                         -          -          (1.2)
 - exceptional                  -          -             -
                            _______________________________

                            198.7      208.4          16.1
                            _______________________________



                    1999                               1998
               Operating                          Operating
                  profit                             profit
                                             After
                                       exceptional
                                           costs &
             Exceptional     Goodwill     goodwill
                   costs amortisation amortisation
                     £m           £m            £m      £m

Continuing
operations

Resource
management

- existing         (0.8)        (1.0)          8.6     8.3
- acquired            -         (0.1)          0.4       -
                   ________________________________________

                   (0.8)        (1.1)          9.0     8.3

Enterprise Solutions

- existing         (0.2)           -           2.9     4.1
- acquired            -         (0.1)            -       -
                   ________________________________________

                   (0.2)        (0.1)          2.9     4.1

Consulting

- existing         (0.2)           -           0.6     0.7
- acquired         (0.1)        (1.2)          1.1       -
                   ________________________________________

                   (0.3)        (1.2)          1.7     0.7

Discontinued
operations            -            -             -     1.0
                   ________________________________________

Before central
costs              (1.3)        (2.4)         13.6    14.1

Central costs

 - base               -            -          (1.2)   (1.2)
 - exceptional     (1.4)           -          (1.4)   (0.5)
                   ________________________________________

                   (2.7)        (2.4)         11.0    12.4
                   ________________________________________


2.   The  1998  accounts are abridged from the Group's  full
     accounts   on   which  the  auditors  have   given   an
     unqualified  opinion. The 1999 statutory accounts  will
     be filed with the Registrar of Companies in due course.

3.   The  calculation of basic earnings per share  is  based
     upon profits on ordinary activities after  taxation and
     a  weighted average of 86,005,790 shares and the  fully
     diluted  earnings  per share is  based  on  a  weighted
     average  of  86,571,076  shares.  The  calculation   of
     adjusted  earnings per share excludes the  discontinued
     operations (net of tax), exceptional costs (net of tax)
     and goodwill amortisation.

4.   Copies of the Group's full report and accounts will  be
     sent  to  all  shareholders in due  course.  Additional
     copies  will be available from the Company's registered
     office,  Skillsgroup plc, Bridgford House, Heyes  Lane,
     Alderley  Edge, Cheshire, SK9 7JP.

5.   The AGM will be held on 14 April 2000.

6.   At  a  meeting  held on 3 February 2000, the  Board  of
     Skillsgroup plc recommended payment of a final dividend
     of  4.0 pence per share to holders of 10 pence ordinary
     shares on the register at the close of business  on  10
     March 2000.

7.   The  recommended  final  dividend,  together  with  the
     interim dividend already paid, make a total dividend for 
     the year of 5.7 pence, compared with 5.0 pence for 1998.

8.   This  statement,  which is unaudited, constitutes  non-
     statutory accounts within the meaning of Section 240 of
     the   Companies  Act  1985  and  was  approved  by  the
     Directors  and  agreed  with  the  Company's   auditors
     PricewaterhouseCoopers on 3 February 2000.