Final Results

Prime People PLC
5 March 2002

                                 PRIME PEOPLE PLC

  Operations: principally specialist recruitment of senior managers for the 
leisure industry, together with related training and interior design businesses

            PRELIMINARY RESULTS FOR THE YEAR ENDED DECEMBER 31,2001


                                   KEY POINTS

•    Sales down 4% to 4.6 million (2000: £4.7m)

•    Group profit before tax down 86% to £0.16m (2000: £1.1m) 

•    Diluted earnings per share down 89% to 0.24p (2000: 2.1p)

•    In the light of current trading activity no dividend will be paid

•    Both Portfolio International and Portfolio Design International were 
     severely affected by the downturn in the tourism sector

•    The balance sheet remains strong with net funds of £633,104

Commenting on the results, chief executive David Coubrough said, 'We have
weathered the storm that has raged in the tourism industry since early last year
and are confident that together with a strong balance sheet our markets will
improve to give better prospects going forward'. 

Press enquiries:

David Coubrough, chief executive 
Chris Heayberd, finance director                         020 7520 5000




PRIME PEOPLE Plc

Chairman's statement


Introduction

As reported, when we announced our interim results trading for each of our
businesses, whilst reasonably strong in the first quarter of the year, slowed in
the second quarter and in common, with most, if not all our competitors,
continued this trend in the last six months of the year.

World events have had a profound effect on the hospitality industry which has
caused considerable caution in the recruitment sector and resulted in a
significant decline in commissioning of new design projects.

Results

Sales for the year were £4.6m (2000: £4.7m) and Group profit before taxation was
£0.16m (2000: £l.lm). Diluted earnings per share were 0.24p against 2.1 p last
year.

The wholly owned subsidiaries made a small operating loss of £56,194 for the
year, which although very disappointing when compared to the previous year's
operating profit of £597,757, was the outcome of the difficult trading
conditions that the group has experienced particularly in the second half of the
year. Cameron Kennedy our associate which operates in the banking and finance
recruitment sector contributed an operating profit of £205,060 (2000: £443,281),
which in the light of the uncertainties of this sector, as highlighted in our
interim announcement, represents a sound performance for the last six months of
the year. We were also pleased to receive a dividend payment of £158,100 from
them.

Operating review

After five years solid growth the group was faced with very different and
difficult circumstances in 2001

Both Portfolio International and Portfolio Design International service
the tourism industry which in the last year has recorded one of its worst
declines on record. The problems affecting the industry have been well
documented and as a consequence the profitability of our business has been
similarly affected.

Portfolio International

Despite this scenario Portfolio International has proved resilient in certain
sectors and has continued to grow market share in the catering and leisure
markets, although demand for permanent recruitment in the hotel sector, both
home and overseas, has fallen significantly.

Turnover of the business for the year has fallen by 4% to £3.2m and net margins
have reduced to a level whereby the profitability has been severely affected.

As a result we have needed to reduce the company's consultant headcount by 28%
in order to align the business to the reduced activities and in particularly our
international business, which started the year so buoyantly, has reduced
consultant headcount by over 50%.

2002 has started steadily with an expectation that tourism should enjoy a better
year with events such as the Queen's Golden Jubilee and the Commonwealth Games
in Manchester. These taken together with the rearrangement of events such as the
Ryder Cup should help the revival of the tourism industry. Whilst it is early
days there are signs of recovery in sales against our reduced cost base.

Portfolio Design International

Two major projects have been completed during the year at the K West Hotel in
Kensington and the Cavendish Hotel in London's West End. Both have achieved
significant critical acclaim and although turnover for the year increased by 24%
the business finished the year with losses of £16,300.

Following recent world events, the prospects for hotel interior design have been
limited as capital expenditure has either been withdrawn or placed on 'hold' and
there are some encouraging signs going into the New Year.

We will continue to monitor this business closely and we will take the
appropriate steps to ensure that the cost base is controlled.

Harper Craven Associates

Having achieved sales of £lm in 2000, the business has for the first time had to
endure a fall in sales.

It is a challenging time for the training sector and this business, like many
similar businesses, has had to negotiate aggressively to win contracts against a
background of reduced training budgets, cancelled or postponed training
programmes and a far greater focus on price.

There is however evidence to show that the business is meeting these challenges
effectively, and there is some confidence that the business is now moving
forwards again.

Cameron Kennedy Resources

This company in which we have a 46.5% interest, specialises in financial
recruitment to both the permanent and temporary sectors, recovered after a poor
first half of the year. Our share of profits for the full year amounted to
£205,060 and although there were some positive signs, sales remain well down on
the previous year and we have no reason to believe that a recovery to former
levels is close at hand

Share Options Scheme

Following our preliminary announcement in March last year we granted options to
certain key employees to subscribe for 496,055 ordinary shares in the company
under the terms of the Prime People plc Inland Revenue approved Employee Share
Option Scheme exercisable at a price of 21.167p. Since granting these options
and largely as a result of the wholly exceptional factors, to which I have
previously referred, the company's share price has fallen to a level, which in
the view of the board, removes any likelihood of the options becoming
exercisable in the foreseeable future. We have therefore, with the agreement of
each option holder, cancelled these options and thereby released the company
from its obligations in relation to them. We will consider the granting of new
options following this announcement of these results to act as an appropriate
incentive.

Employees

It has been a very difficult year with an increased headcount in the first
quarter being exceeded by the reductions in staff levels in the second half of
the year. This inevitably causes concern and disruption and it is much to the
credit of all employees who remain with the business that we are able to move in
to the new year with cautious enthusiasm.

Prospects

The outlook for the recruitment industry remains uncertain. We have taken the
necessary steps to ensure that our cost base reflects the levels of business
that we are projecting to achieve.

Our design business is under pressure in a very competitive market place and,
whilst being monitored closely, will for the time being require the continued
support of the group.

On the training front we expect this business to remain profitable throughout
the year and there are some encouraging signs that new business is starting to
return.

We have reviewed our dividend policy and do not consider that the current levels
of trading activity support the payment of a dividend this year. We will
consider the position again during the coming year.

The group's balance sheet remains strong closing the year with net funds of
£633,104.

Richard E M Lee
Non Executive Chairman 
4 March 2002



PRIME PEOPLE Plc
Consolidated profit and loss account for the year ended 31 December 2001

                       
                                               Note          2001          2000
                                                                £             £

Turnover                                                4,553,497     4,722,198

Cost of sales                                            (245,235)     (281,660)
                                 

Gross profit                                            4,308,262     4,440,538
                 
Administrative expenses                                (4,364,456)   (3,842,781)

Group operating (loss)/profit                             (56,194)      597,757
 
Share of operating profit in associates                   205,060       443,281 
Amortisation of goodwill                                  (12,000)      (12,000)


Total operating profit                                    136,866     1,029,038

Interest receivable and similar income (group)             25,533        79,037
Interest payable and similar charges (group)               (3,499)       (2,800)


Profit on ordinary activities before taxation             158,900     1,105,275 
Taxation on profit on ordinary activities                 (71,503)     (330,859)

Profit on ordinary activities after taxation               87,397       774,416 
Dividends paid                                                  -    (1,453,884)

Amounts transferred to/(from) reserves                     87,397      (679,468)

 
Earnings per share - Basic                       2           0.24p         2.1p 
                   - Diluted                                 0.24p         2.1p


All recognised gains and losses are included in the profit and loss account. 
All amounts relate to continuing activities.



PRIME PEOPLE Plc

Consolidated balance sheet at 
31 December 2001
                                    2001         2001       2000        2000 
                                       £           £           £           £
 
Fixed assets
  
Tangible assets                                   283,345               291,668 
Investments
Investment in associate                           699,378               727,891
  
                                                  982,723             1,019,559
 
Current assets
Debtors                             1,195,853              1,560,617
Cash at bank and in hand              857,357                495,154

                                    2,053,210              2,055,771
 
Creditors: amounts falling due 
within one year                      (790,659)              (904,762)

 
Net current assets                              1,262,551             1,151,009
 
Total assets less current liabilities           2,245,274             2,170,568

Creditors: amounts falling due 
after more than one year                                -               (12,691)

                                                2,245,274             2,157,877
 
Capital and reserves

Called up share capital                           363,467               363,467
Share premium account                             864,925               864,925                      
Merger reserve                                    173,077               173,077
Profit and loss account                           843,805               756,408

 
Equity shareholders' funds                      2,245,274             2,157,877



PRIME PEOPLE Plc

Consolidated cash flow statement for the year ended 31 December 2001

                             Note    2001        2001         2000        2000
                                        £           £            £           £

Net cash inflow from 
 operating activities          3               383,022                  356,862 

Dividend from associated 
 undertaking                                   158,100                  223,200

Returns on investment and 
servicing of finance
 Interest received                   25,533                  79,037 
 Interest paid                       (3,499)                 (2,800)

                                                 22,034                  76,237 

Taxation                                       (200,201)               (106,576)

Capital expenditure and
 financial investment
Purchase of tangible
 fixed assets                      (203,778)                (161,351) 
Sale of tangible
 fixed assets                        34,212                   15,186

                                                (169,566)              (146,165) 

Dividends paid                                         -             (1,453,884)
 

Net cash inflow/(outflow) 
 before management of 
 liquid resources and financing                  193,389             (1,050,326)

Management of liquid resources
(Purchase)/sale of 
 Treasury Deposits                              (100,000)               900,000

Financing
Capital element of finance 
 lease payments                                  (12,565)               (13,529)

Increase/(decrease) in cash     4                 80,824               (163,855)





PRIME PEOPLE Plc

Notes to the preliminary announcement for the year ended 31 December 2001

1 Accounting Policies

The final results have been prepared on the same basis and using the same
accounting policies as those used in the preparation of the accounts for the
year ended 31 December 2000. 

2 Earnings per share

The earnings per share is calculated based on a weighted average number of
shares of 36,346,692 (2000 - 36,346,692) and the profit of £87,397 (2000 -
£774,416), giving earnings per share of 0.24p (2000-2.1p).

Diluted earnings per share is based on the above earnings and adjusts the basic
weighted average number of shares to 36,651,887 (2000 - 36,703,699) as a result
of dilutive share options, giving earnings per share of 0.24p (2000-2.1p).

The weighted average number of shares in issue calculated under the different
methods reconciles as follows:
                                                               2001        2000 
                                                                  £           £
Basic                                                    36,346,692  36,346,692
Number of shares under option                               500,000     500,000 
Number of shares which would have been issued at
 fair value                                                (194,805)   (142,993)

Diluted                                                  36,651,887  36,703,699


3     Reconciliation of operating profit to net cash inflow from operating 
      activities
 
 
                                                               2001        2001
                                                                  £           £

Group operating (loss)/profit                               (56,194)    597,757
Depreciation                                                179,652     160,861
Profit on sale of tangible fixed assets                      (1,763)     (6,931)
Decrease/(Increase) in debtors                              364,764    (470,157)
(Decrease Increase in creditors                            (103,437)     75,332

Net cash inflow from operating activities                   383,022     356,862




PRIME PEOPLE Plc

Notes to the preliminary announcement for the year ended 31 December 2001


4   Reconciliation of net cash inflow to movement in net funds
                                     2001         2001         2000        2000
                                        £            £            £           £
Increase/(decrease) in cash 
 in the year                       80,824                  (163,855)
Cash outflow from
 decrease in debt and lease
 financing                         12,565                    13,529
Cash outflow/(inflow) from
 increase/( decrease) in liquid
 resources                        100,000                  (900,000)

Increase/(decrease) in net funds 
 resulting from cash flows
 in the year                                    193,389              (1,050,326)
 
Opening net funds                               439,715               1,490,041

Closing net funds                               633,104                 439,715                             


 
5 Nature of the financial information

The financial information does not constitute statutory accounts as defined in
section 240 of the Companies Act 1985. The financial information for the year
ended 31 December 2001 is extracted from the group's financial statements to
that date which received an unqualified auditors' report and will be filed with
the Registrar of Companies. The financial information for the year ended 31
December 2000 is extracted from the financial statements to that date which
received an unqualified auditors' report and have been filed with the Registrar
of Companies.


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