MMC.L Regulatory News (MMC)

20 December 2010

Management Consulting Group PLC

Update on Kurt Salmon merger and review of cost base

Management Consulting Group PLC ("MCG" or "the Group"), the international professional services group, today announces an update on the merger of Ineum Consulting and Kurt Salmon Associates, and management's review of the Group's cost base.

As previously announced, the merger of Ineum Consulting and Kurt Salmon Associates will formally take effect from 1 January 2011, and the combined business will trade as Kurt Salmon from that date.

Management has previously noted that it intended to review the Group's cost base during 2010. MCG is pleased to confirm that this review has been completed and that actions have been taken which are expected to deliver annual cost savings, principally in back office operations, of approximately £5 million starting in 2011.

These savings partly relate to the merger of Ineum Consulting and Kurt Salmon Associates but also reflect initiatives at the Group's Head Office in London. The financial benefits of the cost savings will be reflected in 2011, but will be offset by investment in organic growth in the merged Kurt Salmon business which is designed to drive revenue growth and profitability in 2011 and beyond. The one-off costs related to achieving the cost savings will be charged as non-recurring items in 2010. For the year as a whole, the Group expects to report net non-recurring expenses in the range of £2.8 million to £3.3 million.

Nick Stagg, Chief Executive commented:

"These savings reflect MCG's commitment to reducing business overheads and to reallocating funds to drive organic growth and future profitability. The merger between Ineum and KSA is going to plan and we look forward to leveraging the expected synergies and new business opportunities from the combined business in 2011 and beyond."

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Notes to editors:

Management Consulting Group PLC (MMC.L) provides professional services across a wide range of industries and sectors.

It comprises three independently managed practices: Alexander Proudfoot; Ineum Consulting; and Kurt Salmon Associates. Alexander Proudfoot develops and implements operational improvements to its clients to increase productivity and reduce costs. Ineum Consulting provides consultancy services to a wide range of industries in both the private and public sectors. Kurt Salmon Associates provides consultancy services to the retail and consumer products sector and to the health care provider sector. The Group operates worldwide. For further information, visit www.mcgplc.com.