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QA PLC (QA.)

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Tuesday 09 July, 2002

QA PLC

Interim Results

QA PLC
9 July 2002

                                                    9 July 2002


                            QA plc
                               
     Interim results for the six months ended 31 May 2002

QA  plc,  the  specialist in IT training and consulting,  today
announces its interim results for the six months ended  31  May
2002.

Highlights

* Turnover  for  continuing operations  was  £16.1  million
  (2001: £28.0 million)

* Pre-tax  loss  before  exceptional charges  and  goodwill
  amortisation of £2.4 million (2001: profit £2.6 million). After
  goodwill impairment of £28.1 million relating to acquisitions
  made  in 1999 and 2000 and other exceptional charges of  £3.3
  million, the pre-tax loss was £36.0 million (2001: profit £0.4
  million)

* £7 million of cost savings have been achieved against the
  comparable period in H1 2001 without materially impacting the
  range  of  course offerings or the number of  direct  revenue
  generating personnel

* The  market has stabilised and QA's average daily revenue
  has been broadly constant since March

* During the period QA introduced a number of new offerings
  to  the  market,  winning  new clients  in  new  sectors  and
  strengthening relationships with others

* Adjusted  loss  per  share  (1.6p)  is  attributable  to
  continuing  operations  excluding goodwill  amortisation  and
  exceptional items (2001: adjusted earnings per share 2.3p); no
  interim dividend is proposed (2001: 1.8p)


Keith Burgess, Executive Chairman of QA commented:

"Trading  performance  in  the half year  was  consistent  with
expectations. Costs have been vigorously managed and efficiency
gains  achieved  whilst  we  have simultaneously  launched  new
market  offerings  and  strengthened  our  relationships   with
clients. Our expectation is for the current, challenging market
conditions  to  continue  and we have  organised  ourselves  to
respond  robustly. High levels of utilisation and a  lean  cost
base  will  be  maintained. This, combined  with  a  number  of
emerging  opportunities,  and the  usual  seasonal  improvement
between  the  second  and first halves  of  our  trading  year,
underpins our expectation of a much improved performance in the
second half."

For further information please contact:


QA plc                                            020 7656 8484
Keith Burgess, Executive Chairman

Weber Shandwick Square Mile                       020 7950 2800
Nick Oborne/ Louise Robson/ Sally Lewis

An analyst presentation will be held at 11 am at the offices of
Weber Shandwick Square Mile, Aldermary House, 15 Queen Street,
London, EC4N 1TX.
A copy of the Interim presentation will be available from 11 am
at www.qa.com



                                                    9 July 2002

                            QA plc
                               
     Interim results for the six months ended 31 May 2002
                               
                     Chairman's Statement


Introduction

At  the  time  of  our  Annual General  Meeting  in  March,  we
anticipated that the market was stabilising. Our revenue levels
since  have  remained  broadly constant  and  costs  have  been
reduced  so that we are now trading close to breakeven  and  in
line with market expectations.

Economic  conditions and uncertain prospects  have  caused  our
clients  to  cut  back  on  expenditure  for  IT  training  and
consulting  services.  We  have not been  immune,  particularly
since the sectors that were strongest for QA in the first  half
of  2001  have  been particularly hard hit. We  have,  however,
taken   the   view   that  we  must  improve  our   performance
significantly regardless of the general trading environment.

With the introduction of strengthened leadership, the extent of
efficiency and effectiveness improvements have become clear and
we  have  achieved substantial cost savings.  These  have  been
accomplished  without materially impacting  the  range  of  our
course  offerings  or the number of direct  revenue  generating
personnel.

Expenditure  now  matches  current  levels  of  activity.   Any
improvements  in  trading  will  be  immediately  reflected  in
improved  profitability.  Our  actions  throughout  have   been
consistent with our strategy of being client-centric, assisting
in  the  delivery  of  training and consulting  solutions  that
optimise the investment in people and technology.

In the light of current market conditions we have also reviewed
the  carrying  value  of goodwill, the investment  in  our  own
shares  and  the  speed  at which we are  likely  to  exit  our
remaining  surplus properties. Further details of  this  review
are given later in this statement.

Implementation of Strategy

We  have  introduced a number of new offerings to  the  market,
winning  new  clients  in  new sectors  and  strengthening  our
relationships with others:

* Our  approach has allowed us to be successful in  winning
  additional business. With the launch of our outsourced training
  provision service, Training Integration Management,  we  have
  redefined current relationships and entered sectors outside our
  traditional focus, acquiring new clients such as Atkins and the
  RAF. These offer the potential for considerable annual revenue.

* In recognition of our pedigree of excellence in education
  and  learning effectiveness, we have launched a comprehensive
  blended  learning solution (we call this Learning Integration
  Management) that responds to the strong drivers in the market
  to  improve  the  effectiveness of training.  Initially  this
  offering  will  drive revenue from Microsoft training,  which
  equates  to  approximately 10% of the IT training market  and
  where we seek to increase our share.

* In  support of our blended learning solution we have also
  announced  the provision of a Docent-based,  hosted  learning
  management system, that allows training management  over  the
  Internet  accessed via a "pay as you go" licence model.  This
  makes  the  market-leading  Docent  system  easier  and  more
  affordable  to  implement and avoids  many  of  the  commonly
  encountered time, cost, technology and cultural difficulties.

* We  have  restructured  our graduate  training  offering,
  recognising that the new IT environment demands professional,
  business and IT skills and that success in this area can open
  long  term  revenue  streams.  This  new  offering  has   had
  considerable early success - extending relationships in  some
  areas and forming new business opportunities elsewhere.

* Finally  we are bringing to market a number of  offerings
  based on the synergy of our training and consulting services -
  the  most notable being the Microsoft Deployment service that
  provides  an  end-to-end solution for  remote  deployment  of
  Microsoft  desktops  and  servers, supported  by  a  tailored
  training programme.


Financial Results

Turnover  for  continuing operations was £16.1  million  (2001:
£28.0  million).  Adjusted operating loss  for  the  first  six
months  of  our  financial year was £2.3 million (2001:  profit
£2.5  million).  This result reflects the first  quarter  where
costs  were  significantly in excess of revenue followed  by  a
drive  back  to close to breakeven trading by the  end  of  the
second   quarter,  through  improved  trainer  and   consultant
utilisation and focused sales and marketing efforts.

In view of current market conditions the Board has reviewed the
balance   sheet  carrying  value  of  goodwill.  The   goodwill
writedown  relates  to  the acquisitions of  Knowledge  Centre,
Pontis  Consulting, Cap Gemini (UK) Training and DMT,  made  in
1999 and early 2000 when IT valuations were near their peak. We
also  reviewed  the investment in our own shares  held  in  the
Group's  employee  benefits trust. The  review  concluded  that
writedowns  of £28.1 million in respect of goodwill  impairment
and  £1.2  million in respect of investment in our  own  shares
were  appropriate  to  align values with the  Board's  view  of
present  and  future  trading conditions.  In  quantifying  the
levels   of   writedown  required,  the  Board  has  considered
reasonable  projections  of  the  cashflows  expected   to   be
generated by those businesses in the future.

QA  continues  to  hold  properties  from  past  disposals  and
restructurings  that  are not required.  The  majority  are  in
locations favoured by IT and Telecommunication industries where
the  demand  is  now  reduced. While the  management  team  has
energetically  pursued disposals, and has had  some  noteworthy
success,  a  number still remain to be sub-let.  An  additional
provision of £1.2 million has accordingly been made.

Dividends

No interim dividend is proposed (2001: 1.8p).

Trading Prospects

Costs   have  been  vigorously  managed  and  efficiency  gains
achieved  whilst  we  have simultaneously launched  new  market
offerings  and strengthened our relationships with clients.  QA
is  now financially and culturally aligned with the climate  in
which it and our clients exist.

Our   expectation  is  for  the  current,  challenging   market
conditions  to  continue  and we have  organised  ourselves  to
respond  robustly. High levels of utilisation and a  lean  cost
base  will  be  maintained. This, combined  with  a  number  of
emerging  opportunities,  and the  usual  seasonal  improvement
between  the  second  and first halves  of  our  trading  year,
underpins our expectation of a much improved performance in the
second half.

The  fundamentals of the business are strong and QA will pursue
every  commercial  opportunity  that  is  compatible  with  its
strategic  direction to ensure that it maintains its leadership
position in its specialist field.



Keith Burgess
Executive Chairman

                               

For further information please contact:

QA plc                                            020 7656 8484
Keith Burgess, Executive Chairman

Weber Shandwick Square Mile                       020 7950 2800
Nick Oborne/ Louise Robson/ Sally Lewis


QA plc
Consolidated Profit and Loss Account
For the six months ended 31 May 2002

                                                         Restated    Restated
                    Half year   Half year   Half year   Half year        Year
                        ended       ended       ended       ended       ended
                  31 May 2002 31 May 2002 31 May 2002 31 May 2001 30 Nov 2001
              Pre-exceptional Exceptional       Total       Total       Total
                    £ million  £ million    £ million   £ million   £ million
                                              
Turnover                                                           
                                                                   
Continuing operations    16.1           -        16.1        28.0        53.1
Discontinued operations     -           -           -         2.2         2.2
------------------------------------------------------------------------------
                         16.1           -        16.1        30.2        55.3
==============================================================================
Operating(loss)/profit
                                                                   
Continuing operations                                              
(Loss)/profit before    
amortisation/impairment
of goodwill              (2.3)       (3.3)       (5.6)        2.5         3.1
Amortisation/impairment 
of goodwill              (2.2)      (28.1)      (30.3)       (2.2)       (4.4)
Operating profit from 
continuing operations    (4.5)      (31.4)      (35.9)        0.3        (1.3)
                                                                   
Discontinued operations                                            
Loss before release of    
provision for operating 
loss                        -           -           -         0.7         0.7

Release of provision 
for operating loss          -           -           -        (0.7)       (0.7)
                            -           -           -           -           -
Operating (loss)/profit  (4.5)      (31.4)      (35.9)        0.3        (1.3)
------------------------------------------------------------------------------
(Loss) /profit before 
interest                 (4.5)      (31.4)      (35.9)        0.3        (1.3)
                                                                  
Net interest (payable)/
receivable               (0.1)          -        (0.1)        0.1         0.1
------------------------------------------------------------------------------
                                                                 
(Loss) /profit before 
taxation                 (4.6)      (31.4)      (36.0)        0.4        (1.2)
                                                                   
Taxation                  1.0         0.5         1.5        (0.6)        1.0
------------------------------------------------------------------------------
                                                                  
(Loss) /profit after 
taxation                 (3.6)      (30.9)      (34.5)       (0.2)       (0.2)
=============================================                                 
                                
Dividends                                           -        (1.5)       (1.8)
                                              --------------------------------
Retained loss                                   (34.5)       (1.7)       (2.0)
                                              ================================
                    
                                                                   
Dividend per share                                  -         1.8p        2.3p
Basic loss per share                            (39.3)p     (0.2)p      (0.2)p
Fully diluted basic loss per share              (39.3)p     (0.2)p      (0.2)p
Adjusted* (loss) / earnings per share            (1.6)p       2.3p        3.6p
Adjusted* fully diluted earnings per share       (1.6)p       2.3p        3.6p

*The adjusted results are attributable to continuing operations excluding
goodwill amortisation and exceptional items

QA plc
Consolidated Balance Sheet
As at 31 May 2002

                                                     Restated        Restated
                              At 31 May 2002   At 31 May 2001  At 30 Nov 2001
                                   £ million        £ million       £ million
Fixed assets                                               
    Intangible assets                   30.7             63.8            61.0
    Tangible fixed assets                6.7              8.5             8.1
    Investments                          1.7              2.9             2.9
------------------------------------------------------------------------------
                                        39.1             75.2            72.0
                                                           
Current assets                                             
    Stock                                0.1              0.1             0.1
    Debtors                              8.3             15.2            11.5
    Cash at bank and in hand             0.1             10.5             7.4
------------------------------------------------------------------------------
                                         8.5             25.8            19.0
                                                           
Creditors - amounts falling due                            
within one year
    Borrowings                          (5.3)           (12.3)           (9.8)
    Other creditors                    (10.4)           (20.5)          (15.9)
------------------------------------------------------------------------------
                                       (15.7)           (32.8)          (25.7)
                                                           
Net current liabilities                 (7.2)            (7.0)           (6.7)
------------------------------------------------------------------------------
                                                         
Total assets less current liabilities   31.9             68.2            65.3
                                                          
Creditors - amounts falling due after more                 
than one year                                              
                                                           
    Borrowings                             -             (1.3)           (0.1)
    Other creditors                        -                -               -
                                                           
Provisions for liabilities and charges  (2.8)            (2.2)           (1.7)
------------------------------------------------------------------------------
Net assets                              29.1             64.7            63.5
------------------------------------------------------------------------------
                                                          
Capital and reserves                                       
    Called up share capital              9.2              8.8             8.8
    Deferred share capital               1.0              3.5             2.6
    Share premium                       46.7             45.4            45.4
    Other reserves                       1.5              1.5             1.5
    Profit and loss account            (29.3)             5.5             5.2
------------------------------------------------------------------------------
                                        29.1             64.7            63.5
------------------------------------------------------------------------------

QA plc
Consolidated Cash Flow Statement
For the six months ended 31 May 2002

                                          Half year    Half year         Year
                                              ended        ended        ended
                                        31 May 2002  31 May 2001  30 Nov 2001
                                          £ million    £ million    £ million
Reconciliation of operating profit                           
to net cash flow from operating activities                          
                                                             
Operating profit/(loss)                       (35.9)         0.3         (1.3)
                                                             
Goodwill amortisation /impairment              30.3          2.2          4.4
                                                             
Depreciation                                    0.9          1.1          2.0
                                                             
Loss on disposal /write downs of     
fixed assets and  investments                   1.7            -          0.1
                                                             
(Increase) /decrease in stock                     -         (0.1)         0.1
                                                             
Decrease in debtors                             2.2          0.6          3.0
                                                             
Decrease in creditors                          (2.9)        (8.1)        (9.2)
                                                             
Increase /(decrease) in provisions              0.9         (1.0)        (1.6)
------------------------------------------------------------------------------
                                                            
Net cash (outflow) /inflow from     
operating activities                           (2.8)        (5.0)        (2.5)
                                                             
Returns on investment and servicing                          
of finance
   Interest (paid) /received                   (0.1)         0.3          0.4
                                                             
Taxation                                                     
Corporation tax received                        0.7          0.4          0.4
                                                             
Capital expenditure and financial investment
   Purchase of fixed assets                    (0.9)        (1.1)        (1.9)
   Disposal of fixed assets                     0.8          1.0          1.2
                                                             
Acquisitions and disposals                                   
Acquisition of businesses                                    
   Total impact on net cash/(borrowings)          -         (0.5)           -
   Increase in borrowings (excluding overdrafts)  -            -            -
------------------------------------------------------------------------------
                                                               
Cashflow from acquisitions                        
(including net cash acquired)                     -         (0.5)           -
Disposal of businesses                            -          3.8          3.6
                                                  -          3.3          3.6
                                                             
Equity dividends paid                          (0.4)        (3.4)        (4.9)
                                                             
Net cash outflow before financing              (2.7)        (4.5)        (3.7)
                                                             
Financing                                                    
   Repayment of borrowings                     (4.4)        (0.1)        (4.0)
   Capital element of finance lease payments   (0.1)        (0.2)        (0.2)
------------------------------------------------------------------------------
Decrease in cash in the period                 (7.2)        (4.8)        (7.9)
------------------------------------------------------------------------------

QA plc
Notes to the Financial Statement

1.   Except for the impact of the restatements described in note 3,
the interim financial statements have been prepared on the basis of
the  accounting  policies  set out in the  Group's  2001  statutory
accounts.  The interim financial statements which have been approved
by the directors are unaudited and do not constitute full financial
statements  within the meaning of Section 240 of the Companies  Act
1985.

2.   The comparative figures for the year ended 30 November 2001 do
not constitute full financial statements and have been abridged from
the full Group accounts for the year ended on that date, on which the
auditors  gave an unqualified report.  The 2001 accounts have  been
delivered to the Registrar of Companies.

3.   Adoption of FRS 19 and restatement of prior year comparatives
With  effect  from 1 December 2001 the Group has  adopted  FRS  19,
"Deferred  Tax".   In accordance with this standard,  deferred  tax
assets   and  liabilities  are  recognised  in  full  where  timing
differences exist at the balance sheet date.

Deferred  tax assets are only recognised to the extent  that  their
recoverability  is regarded as more likely than not.  Deferred  tax
assets and liabilities are not discounted.

As  a  result of the implementation of FRS 19, "Deferred Tax",  the
previously unrecognised deferred tax assets existing at 31 May 2001
and 30 November 2001 have been recognised and the balance sheet and
profit  and loss accounts for the period restated accordingly.   At
30 November 2000 the net deferred tax asset was £nil.

The  effect of this restatement is to increase net assets at 31 May
2001  by  £0.2m  and  at 30 November 2001 by £0.5m.   The  taxation
charge in the 6 months ended 31 May 2001 has been reduced by £0.2m.
For  the  year ended 30 November 2001, the increase in the taxation
credit amounts to £0.5m.  In the current period a deferred taxation
credit  of  £0.3m arises in respect of adjustments made to  capital
allowances claimed in prior period computations.

As a result of these restatements, both basic and adjusted EPS have
been restated accordingly.

4.   Segmental analysis
                               Half year ended   Half year ended   Year ended
                                   31 May 2002       31 May 2001  30 Nov 2001
                                         Total             Total        Total
                                     £ million         £ million    £ million
Turnover                                                      
                                                              
       Continuing operations                                  
       Training                           12.4              20.6         39.1
       Consulting and other                3.7               7.4         14.0
------------------------------------------------------------------------------
                                          16.1              28.0         53.1
                                                              
       Discontinued operations               -               2.2          2.2
------------------------------------------------------------------------------
                                          16.1              30.2         55.3
==============================================================================
Operating profit                                              
       Continuing operations                                  
       Before exceptionals and        
       goodwill amortisation              (2.3)              2.5          3.1
       Exceptional restructuring     
       costs and property provisions      (1.9)                -            -
       Exceptional write down of 
       investments                        (1.4)                -            -
       Goodwill - amortisation            (2.2)             (2.2)        (4.4)
       Goodwill - impairment             (28.1)                -            -
------------------------------------------------------------------------------
                                         (35.9)              0.3         (1.3)
                                                              
       Discontinued operations               -                 -            -
------------------------------------------------------------------------------
                                         (35.9)              0.3         (1.3)
==============================================================================

The Group operates as an integrated business in only one market
segment, providing IT training and consulting services to a single
customer base.  Turnover is analysed between the two major service
lines to provide additional information.

5.  Exceptional items
                                                                   £ million
Operating exceptional items                                  
Restructuring costs                                                      0.7
                                                             
Additional provisions required re lease obligations on       
non-operational properties and write down of freehold properties         1.2
                                                            
Write down of own shares held in employee benefit trust and  
other investments                                                        1.4
                                                             
Write down to reflect impairment of carrying                 
value of purchased goodwill                                             28.1
------------------------------------------------------------------------------
                                                                        31.4
------------------------------------------------------------------------------

Restructuring costs relate to employee severance and the relocation
of the Dublin training centre.

The  Directors  have  considered the value of those  parts  of  the
business  which  derive  from the 1999  and  2000  acquisitions  of
Knowledge  Centre, Cap Gemini (UK) Training, Pontis Consulting  and
Direct  Media Technology.  The value in use of the assets  deriving
from   those  acquisitions  has  been  evaluated  using  cash  flow
projections  discounted at 8.3% and total goodwill  impairments  of
£28.1  million  have been assessed accordingly.  These  projections
have also been used to assess the write down of the value of QA plc
shares held in the Group's employee benefit trust.

6.   The calculation of the basic loss per share is based on a loss
after tax of £34.5 million (May 2001: loss of £0.2 million) and
87,808,000 shares  (2001: 86,303,000 shares) being the weighted
average number of shares in issue during the current period.
Adjusted (loss)/earnings per share is  given for continuing
operations and is based on (loss)profit after tax adjusted for
discontinued operations, exceptional items and goodwill amortisation.

7.   A copy of this statement has been sent to all shareholders and
is available from the Company's registered office.






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