PageGroup Regulatory News (PAGE)

13 August 2012

MICHAEL PAGE INTERNATIONAL PLC

Half Year Results for the Period Ended 30 June 2012

Michael Page International plc ("Michael Page"), the specialist professional recruitment company, announces its unaudited half year results for the period ended 30 June 2012.

*Constant Exchange Rates † Exceptional items relate to a regional management restructure

Highlights

·; Group gross profit broadly flat -0.5% (+2.2%*), the business remains profitable in all key markets

·; 78% of gross profit generated outside the UK

·; 58% of gross profit generated from non Finance and Accounting disciplines

·; Launched a new business in Bogota, Colombia

·; New offices in Casablanca, Cape Town, Macaé (Rio de Janeiro), Suzhou and Taipei

·; Gross profit from permanent placements reduced by 2% (+1%*)

·; Gross profit from temporary placements grew by 4% (+7%*)

·; Headcount up by 35 (+0.7%) in first half of 2012

·; Share repurchases of£9.4m during the first half of 2012

·; Strong balance sheet with net cash at 30 June 2012 of £32.4m

·; Interim dividend held at 3.25p

Commenting on the results, Steve Ingham, Chief Executive of Michael Page, said:

"Despite market conditions deteriorating during the second quarter of 2012, the Group delivered broadly flat gross profit (-0.5%) compared to the first half of 2011 and an increase of 2.2% at constant rates of exchange. The second quarter also saw a 4% increase in gross profit compared to the first quarter, against a tough comparator, with Q2 2011 having been our second highest quarter on record, with a growth rate of 32%.

"Over the last 10 years we have continued to diversify and hence have altered significantly the composition of the Group, entirely through organic investment and development, with over three quarters of the Group's gross profits now generated from outside the UK. Our Latin America and Asia businesses combined now represent over 21% of the Group's gross profit, with 36 offices across 10 countries and almost 1,200 staff.

"We continue to invest in geographic diversification where there is long-term growth potential. We opened offices in Cape Town, in South Africa and a further office in Macaé, Rio de Janeiro, in Brazil, adding to the offices in Taipei, Suzhou, Bogota, and Casablanca opened during the first quarter.

"Our headcount has adjusted to reflect market conditions. It increased in areas where we have growth, principally Asia and our newer businesses and reduced in other areas, largely from natural attrition. This resulted in headcount remaining broadly flat through the first half.

"It is a clear priority that we continue to manage the cost base to reflect market conditions, whilst investing to create a platform for greater growth when markets improve. We believe strongly that we have the balance right. The business remains profitable throughout all our major markets, apart from new start-ups.

"We anticipate a challenging second half as we enter the seasonally quieter summer period in both Continental Europe and the UK. This is set against tough comparables and an ongoing backdrop of economic uncertainty. The Group is financially strong, with net cash of £32.4m. We remain well-placed to take advantage of any recovery in the markets in which we operate. At this time, we expect our full year operating profit from trading activities to be broadly in line with current market estimates."

The company will host a conference call for analysts and investors at 9.00am today. The live presentation can be viewed by following the link:

http://event.on24.com/r.htm?e=499517&s=1&k=341B426C56421833ACE1B08E0818A1EB

The dial-in details for the conference call are as follows:

Dial-In: +44 (0)20 3140 0668

PIN Code: 391875 followed by #

The presentation and recording of the call will be available on the company's website later today at:

http://investors.michaelpage.co.uk/presentations

Enquiries:

INTERIM MANAGEMENT REPORT

To the members of Michael Page International plc

Cautionary Statement

This Interim Management Report ("IMR") has been prepared solely to provide additional information to shareholders to assess the Group's strategies and the potential for those strategies to succeed. The IMR should not be relied on by any other party or for any other purpose. This IMR contains certain forward-looking statements. These statements are made by the directors in good faith based on the information available to them up to the time of their approval of this report and such statements should be treated with caution due to the inherent uncertainties, including both economic and business risk factors, underlying any such forward-looking information.

This IMR has been prepared for the Group as a whole and therefore gives greater emphasis to those matters that are significant to Michael Page International plc and its subsidiary undertakings when viewed as a whole.

STRATEGY

The Group's strategy is to expand and diversify the Michael Page business by industry sectors, by professional disciplines as well as by geography. This includes the Page Personnel, Michael Page and Michael Page Executive Search disciplines; the clear objective is to be the leading specialist recruitment consultancy in each of our chosen markets. As recruitment activity is dependent upon economic cycles, by being more diverse the dependency on individual businesses or markets is reduced making the overall Group more resilient. This strategy is pursued entirely through the organic growth of existing and new teams, offices, disciplines and countries, with a consistent team and meritocratic culture.

Our organic growth is achieved by drawing upon the skills and experiences of proven Michael Page management, ensuring we have the best and most experienced, home-grown talent in each key role. When we invest in a new business, we do so only with a long-term objective and in the knowledge that at some point there will be periods when economic activity slows. While it is difficult to predict accurately when these slowdowns will occur and how severe they will be, it has been our practice in the past and our intention in the future to maintain our presence in our chosen markets, but with close control over our cost base. Our team-based structure and primarily profit-share business model is scalable and the small team size also means that we can increase rapidly our headcount to achieve and maintain growth.

The focus of our organic growth in the last ten years has been to grow in emerging markets, where the outsourcing of recruitment particularly for specialist roles is underdeveloped and where there is limited competition. In many of these markets, we have achieved a market leading position and intend to embrace fully the opportunity by investing rapidly in headcount and opening in new cities and countries. The investment to take advantage of these opportunities in terms of new headcount, international transfers of management, new office space and start-up losses will limit short-term profitability but should provide a substantial platform for longer-term returns.

Our intention is always to maintain a strong balance sheet. As the business grows, there is a need for additional working capital, which is funded from operating cash flow, with surplus cash being returned to shareholders through dividends and share repurchases.

GROUP RESULTS

The Group's revenue for the six months ended 30 June 2012 increased by 0.1% to £502.6m (2011: £502.1m) and gross profit decreased by 0.5% to £273.9m (2011: £275.1m). At constant exchange rates, the Group's revenue increased by 2.6% and gross profit by 2.2%. In the first half, the mix of the Group's revenue and gross profit between permanent and temporary placements decreased slightly to 44:56 (2011: 45:55) and 79:21 (2011: 80:20), respectively. Typically, as economic conditions become more uncertain, permanent recruitment activity slows compared to temporary recruitment. This trend is also affected by the geographical performances across the Group, as our businesses in both Latin America and Asia are predominantly permanent rather than temporary recruitment in the specialist sectors. The gross margin on temporary placements in the first half of 2012 improved slightly to 20.8% (2011: 20.2%). Pricing has remained relatively stable throughout the first half of 2012, with a stronger pricing environment in rapidly growing markets, being offset by competitive pressures in the weaker UK and Southern European markets.

As the demand for recruitment services increases, the number of positions to be filled rises, candidate shortages begin to emerge, the time-to-hire period starts to reduce and there is less pressure on pricing. With the increased uncertainty and resultant reduction in market confidence that impacted parts of the Group during the first half of 2012, many of these factors trended negatively, albeit to differing degrees in our different geographic regions, creating an environment where productivity fell with less gross profit per fee earner able to be generated. The Group's strategy of growing organically, as well as maintaining market presence and a degree of spare capacity, means that the Group is operationally geared, which resulted in a proportionally larger decrease in operating profit than in gross profit. This conversion of gross profit to operating profit was also reduced by the amount of investment being made to facilitate and maintain growth in our newer markets and in markets where we see longer term potential.

In the first half of 2012, headcount was broadly flat, up by 35 (0.7%). We launched a new business in one new country in Bogota in Colombia, we also opened five new offices in Casablanca, Cape Town, Macaé (Brazil), Suzhou and Taipei.

With a small increase in gross profit adversely affected by the effects of exchange rates, a weaker economic environment in most of the Group's markets and investment for the future, operating profit from trading activities for the first half of 2012 decreased to £36.0m before exceptional items (2011: £45.4m). The Group's conversion rate of gross profit to operating profit from trading activities is now 13.1% before exceptional items (2011: 16.5%).

During the first half of 2012, we restructured the Group's regional management structure, which resulted in the removal of the Continental Europe and Americas regional management team, including one Executive Director. Severance packages for this team, who had been employed by the Group for many years and were largely based in France, with accompanying high employment protection and social charges, totalled £7.8m within which are £1.5m of accelerated share plan related charges. These have been presented as an exceptional charge in the first half income statement. The payback period for this investment is around two years.

EUROPE, MIDDLE EAST AND AFRICA (EMEA)

Europe, Middle East and Africa (EMEA) is the Group's largest region, contributing 43% of Group gross profit in the first half. Revenue in the region increased by 0.9% to £211.5m (2011: £209.5m) and gross profit decreased by 1.9% to £117.9m (2011: £120.3m). In constant currency, revenue increased by 6.5% on the first half of 2011 and gross profit increased by 3.4%. The 1.9% decrease in gross profit resulted in a 21.1% decrease in operating profit before exceptional items for the first half of 2012 to £13.4m (2011: £17.0m), a conversion rate of 11.3% (2011: 14.1%).

Market conditions remained challenging across the region; with economic uncertainty, increasing austerity measures and levels of unemployment across Southern Europe further impacting market confidence. The weakening of the Euro relative to sterling during the second quarter, has impacted the results of the Eurozone countries, with year-on-year growth rates at constant rates of exchange some 5% higher than in reported.

Our business in Germany, now represents 16% of the region, and grew 25% year-on-year in constant currency against a strong prior year comparator. In France we grew 3% despite the uncertainties surrounding the French elections and the wider Eurozone issues. Headcount across the region decreased by 25 (1%) in the first half of 2012 to 2,185, but was still up 59 or 3% on June 2011. During the first half we opened new offices in Casablanca, Morocco, and in Cape Town, South Africa.

UNITED KINGDOM

In the UK, representing 22% of the Group's gross profit in the first half, revenue decreased by 10.4% to £146.0m (2011: £163.0m), gross profit decreased by 6.5% to £61.7m (2011: £66.0m) and operating profit before exceptional items was down 17.2% at £8.6m (2011: £10.4m).

Market conditions have remained tough, but broadly stable throughout the first half of 2012. Our Banking business continued to be affected strongly by conditions in the banking sector and was down over 50% year-on-year. However, several other businesses, particularly the more technical disciplines, continued to grow. Overall, operating profit decreased by 17%, with the conversion rate slightly down at 14.0% (2011: 15.8%). Headcount in the UK was down 3.8% during the first half of 2012 to 1,243 at the end of June 2012 (1,292 at 31 December 2011), but down some 171 on the previous peak of 1,414 at Q3 2011.

ASIA PACIFIC

In Asia Pacific, representing 21% of the Group's gross profit in the first half, revenue increased by 23.3% to a record £94.6m (2011: £76.7m) and gross profit increased by 17.1% to £56.9m (2011: £48.6m). In constant currency, revenue increased by 20.4% and gross profit by 14.1%. Operating profit rose by 12.8% to £13.8m (2011: £12.2m), with the large investments in additional headcount and new offices in Taipei and Suzhou, partially offset by operational gearing and increased productivity, resulting in a small net decrease in the conversion rate to 24.3% (2011: 25.2%).

Australia, our largest business in the region, grew gross profits by 9% in constant currency. Market conditions were particularly strong in Western Australia and Queensland, benefiting from the strength of the mining and commodities sector. In Asia, despite the ongoing weakness in the Financial Services sector continuing to impact our growth in Tokyo, Hong Kong and Singapore, gross profits grew 19% in constant currency. Our newer businesses in Malaysia and India are progressing well. At the end of June, we had 1,050 staff in the region, an increase of 79 (8%) since the start of the year and assuming market conditions remain strong, further headcount will be added during the second half of 2012.

THE AMERICAS

In the Americas, representing 14% of the Group's gross profit in the first half, revenue decreased by 4.1% to £50.6m (2011: £52.7m) and gross profit decreased by 7.2% to £37.4m (2011: £40.3m). In constant currency, revenue increased by 1.1% and gross profit decreased by 1.3%. We continued to make significant investment in new countries and offices to build on our dominant market-leading position in Latin America. This, along with the one-off expense of a senior management charge taken in the normal course of business, decreased operating profit by 96.6% to £0.2m (2011: £5.8m), with a conversion rate of 0.5% (2011: 14.4%).

In North America we were impacted by the difficulties in the financial services sector and year-on-year gross profit was down by 3% in constant currency. However, our newer offices in Houston and San Francisco performed well. We have strengthened the management team in the region and expect to benefit from this in the future.

In Latin America, gross profit was down 1% year-on-year in constant currency. In Brazil, where we are the clear market leader with approaching 400 employees and where the economy has slowed compared to H1 2011, our activity levels were stable. Our other businesses in Latin America are growing strongly and accordingly we have invested in additional headcount in Mexico, Argentina and Chile to further enhance our market leading positions. Colombia our newest country in Latin America which opened at the start of 2012 has already recorded a small monthly profit. We also opened in Q2 an additional office in Macaé, Rio de Janeiro, to invest further in our growing global Oil and Gas business. The Brazilian Real has weakened against Sterling compared to H1 2011, with year-on-year growth rates at constant rates of exchange some 10% higher than in reported. We now have 843 staff in the region, an increase of 30 (4%) since the start of the year.

OPERATING PROFIT AND CONVERSION RATES

As a result of the Group's organic long-term growth strategy, tight control on costs and profit-based bonuses, we have a business model that is operationally geared. The majority of our cost base, around 75%, relates to our staff, with the other main components being property and information technology costs. With a strategy of organic growth, the Group incurs start-up costs and operating losses as investments are made to grow existing and new businesses, open new offices and launch businesses in new countries. Furthermore, significant increases in headcount mean that it takes time to train staff before they become fully productive. These characteristics of our growth strategy and the levels of investment affect the conversion rates in any one reporting period.

Generally, in years when economic conditions are benign, revenue and gross profit grow. Operating profit grows at a faster rate due to a combination of higher productivity, stronger pricing and greater utilisation of infrastructure. In order to grow, we need to increase our headcount and ensure that we have the infrastructure to house and support them. When economic conditions weaken and recruitment activity slows, these factors work in reverse and are compounded by a shortening of earnings visibility.

The majority of our permanent placement activity is undertaken on a contingent basis, which means that on those assignments we only generate revenue when a candidate is successfully placed in a role. Our short-term visibility on these earnings is provided by the number of assignments we are working on, the number of candidates we have at interview and the stage they are at in the interview process. The average time to complete a placement, from taking on an assignment to successfully placing a candidate, tends to lengthen in a downturn, reducing productivity and the risk of the candidate being rejected or the assignment being cancelled increases, thereby further reducing our earnings visibility.

In a downturn, activity levels can slow quickly, causing revenue to decline quickly due to the contingent nature of a large proportion of our placements. The main opportunity for reducing our own cost base is headcount, but these reductions tend to lag the declines in revenue due to the shortening visibility. The majority of the initial reductions in our headcount occur through natural attrition, but these are treated as a component of our normal operating expenses and do not incur significant restructuring charges. However, as greater reductions become necessary, such charges may be incurred.

As economic conditions begin to improve, the confidence levels of both candidates and clients also improves and the rate at which people change jobs starts to increase. This increase in activity is serviced from the spare capacity we maintain during a downturn and therefore profits have the potential to increase rapidly. As different markets recover and grow at different rates, we invest in infrastructure and additional headcount in some markets to maintain their growth, while carrying some spare capacity in others. Where possible, we redeploy resources to match market conditions. The Group's conversion rate for the period was 13.1% (2011: 16.5%), which reflects the deterioration in market conditions seen through the first half of 2012. The movement in the conversion rates of the four regions and the levels of conversion now being achieved reflects the market conditions in those regions, the levels of investment in each region and the levels of spare capacity still available to be utilised.

TAXATION AND EARNINGS PER SHARE

The charge for taxation is based on the expected effective annual tax rate of 33.5% (2011: 33.0%) on profit before taxation.

Basic and diluted earnings per share for the six months ended 30 June 2012 were 6.1p (2011: 10.0p) and 6.1p (2011: 9.7p) respectively. Before exceptional charges, basic and diluted earnings per share for the six months ended 30 June 2012 were 7.9p and 7.8p respectively.

CASH FLOW

The Group started the year with net cash of £58.2m. In the first half we generated £27.5m from operations after funding an increase in working capital of £14.0m. Tax paid was £17.5m and net capital expenditure was £9.6m, with net interest received of £0.1m. During the first half, £9.4m was spent repurchasing shares into the employee benefit trust to hedge exposures under share plan awards, £5.5m was received from the exercise of share options and dividends of £20.8m were paid. After adverse currency movements of £1.5m, the Group had net cash of £32.4m at 30 June 2012.

DIVIDENDS AND SHARE REPURCHASES

It is the Board's intention to pay dividends at a level that it believes is sustainable throughout economic cycles and to continue to use share repurchases to return surplus cash to shareholders. The Board remains confident of the longer term prospects and has therefore decided to maintain the interim dividend at 3.25p (2011: 3.25p) per share. The interim dividend will be paid on 5 October 2012 to shareholders on the register at 7 September 2012.

In the first half, the Group's employee benefit trust purchased approximately 2.6m shares for £9.4m at an average price of £3.63 to satisfy employee share plan awards. No shares were repurchased and cancelled during the first half.

CURRENT TRADING AND OUTLOOK

Despite market conditions deteriorating during the second quarter of 2012, the Group delivered broadly flat gross profit (-0.5%) compared to the first half of 2011 and an increase of 2.2% at constant rates of exchange. The second quarter also saw a 4% increase in gross profit compared to the first quarter, against a tough comparator, with Q2 2011 having been our second highest quarter on record, with a growth rate of 32%.

Over the last 10 years we have continued to diversify and hence have altered significantly the composition of the Group, entirely through organic investment and development, with over three quarters of the Group's gross profits now generated from outside the UK. Our Latin America and Asia businesses combined now represent over 21% of the Group's gross profit, with 36 offices across 10 countries and almost 1,200 staff.

We continue to invest in geographic diversification where there is long-term growth potential. We opened offices in Cape Town, in South Africa and a further office in Macaé, Rio de Janeiro, in Brazil, adding to the offices in Taipei, Suzhou, Bogota, and Casablanca opened during the first quarter.

Our headcount has adjusted to reflect market conditions. It increased in areas where we have growth, principally Asia and our newer businesses and reduced in other areas, largely from natural attrition. This resulted in headcount remaining broadly flat through the first half.

It is a clear priority that we continue to manage the cost base to reflect market conditions, whilst investing to create a platform for greater growth when markets improve. We believe strongly that we have the balance right. The business remains profitable throughout all our major markets, apart from new start-ups.

We anticipate a challenging second half as we enter the seasonally quieter summer period in both Continental Europe and the UK. This is set against tough comparables and an ongoing backdrop of economic uncertainty. The Group is financially strong, with net cash of £32.4m. We remain well-placed to take advantage of any recovery in the markets in which we operate. At this time, we expect our full year operating profit from trading activities to be broadly in line with current market estimates.

KEY PERFORMANCE INDICATORS

Financial and non-financial key performance indicators (KPIs) used by the Board to monitor progress are listed in the table below. The source of data and calculation methods year-on-year are on a consistent basis.

The movements in KPIs are in line with expectations.

PRINCIPAL RISKS AND UNCERTAINTIES

The management of the business and the execution of the Company's strategy are subject to a number of risks. The following section comprises a summary of what the Group believes are the main risks that could potentially impact the Group's operating and financial performance.

People

The resignation of key individuals and the inability to recruit talented people with the right skill-sets could affect adversely the Group's results. This is further compounded by the Group's organic growth strategy and its policy of not externally hiring senior operational positions. Mitigation of this risk is achieved by succession planning, training of staff, competitive pay structures and share plans linked to the Group's results and career progression.

Macroeconomic environment

Recruitment activity is largely driven by economic cycles and the levels of business confidence. The Board aims to reduce the Group's cyclical risk by diversifying the business by expanding geographically, increasing the number of disciplines, building part-qualified and clerical businesses and continuing to build the temporary business. A substantial portion of the Group's gross profit arises from fees that are contingent upon the successful placement of a candidate in a position.

If a client cancels an assignment at any stage in the process, the Group receives no remuneration. As a consequence the Group's visibility of gross profits is generally quite short and reduces further during periods of economic downturn.

Competition

The degree of competition varies in each of the Group's main regions. In the UK, Australia and North America, the recruitment market is well developed, highly competitive and fragmented. The characteristics of a developed market are greater competition for clients and candidates, as well as pricing pressure. In the majority of EMEA, Latin America and Asia, the recruitment market is generally less developed, with a large proportion of all recruitment being carried out by companies' internal resources, rather than through recruitment specialists. This is changing due to changes in legislation, increasing job mobility and the difficulty internal resources face in sourcing suitably qualified candidates and managing increasing levels of compliance. If the Group does not continue to compete in its markets effectively, by hiring new staff, opening and expanding offices and continuing the discipline roll-outs, there is a risk that competitors may beat us to key strategic opportunities, which may result in lost business and a reduction in market share. This risk is mitigated by meetings of the Board, Executive Board and Regional and Country Management Boards where Group strategy is continually reviewed and decisions made over the allocation of the Group's resources, principally people.

Technology

The Group is reliant on technology systems to provide services to clients and candidates. These systems are dependent on a number of important suppliers that provide the technology infrastructure and disaster recovery solutions. The performance of these suppliers is monitored to ensure business critical services are available and maintained as far as practically possible. Due to the rapid advancement of technology, there is a risk that systems could become outdated with the potential to affect efficiency and have an impact on revenue and client service. This risk is mitigated by regular reviews of the Group's technology strategy to ensure that it supports the overall Group strategy.

Legal

The Group operates in a large number of jurisdictions that have varying legal and compliance regulations. The Group takes its responsibilities seriously and ensures that its policies, systems and procedures are updated continually to reflect best practice and to comply with the legal requirements in all the markets in which it operates. In order to reduce the legal and compliance risks, fee earners and support staff receive regular training and updates of changes in legal and compliance requirements.

Financial

The Group has a risk management process to assess risks and places significant emphasis on maintaining adequate financial and management controls. The risk management process is viewed as a dynamic part of operations and is assessed globally on an annual basis. The Group has developed a framework to manage risk and respond to the global financial crisis, with emphasis upon liquidity as well as credit exposure, management of currency risk and business and operational continuity.

TREASURY MANAGEMENT, BANK FACILITIES AND CURRENCY RISK

It is the Directors' intention to continue to finance the activities and development of the Group from retained earnings and to operate the Group's business while maintaining a strong balance sheet position. In a generally benign economic environment this equates to maintaining the Group's net cash/debt position within a relatively narrow band, with cash generated in excess of operational and investment requirements being returned to shareholders. In a period of economic uncertainty, a more cautious funding position will be adopted, with the Group being managed in a net cash position.

Cash surpluses are invested in short-term deposits, with any working capital requirements being provided from Group cash resources, Group facilities, or by local overdraft facilities. The Group has a multi-currency notional cash pool between the Eurozone subsidiaries and the UK-based Group Treasury subsidiary. The structure facilitates interest and balance compensation of cash and bank overdrafts.

In June 2012, the Group extended its £50m three-year multi-currency committed revolving credit facility with Deutsche Bank for a further three months to facilitate a smooth transition of funding arrangements. In July 2012 the Group entered into an Invoice Financing arrangement with HSBC Bank, the availability of which is limited to the level of UK trade receivables available for refinancing. These new bank facilities are provided subject to conventional banking covenants.

The main operational currencies of the Group are Sterling, Euro, Australian Dollar and Brazilian Real. The Group does not have material transactional currency exposures, nor is there a material exposure to foreign denominated monetary assets and liabilities. The Group is exposed to foreign currency translation differences in accounting for its overseas operations. Our policy is not to hedge this exposure.

In certain cases, where the Group gives or receives short-term loans to and from other Group companies with different reporting currencies, it may use short-dated foreign exchange swap derivative financial instruments to manage the currency and interest rate exposure that arises on these loans. It is the Group's policy not to seek to designate these derivatives as hedges.

GOING CONCERN

The Board has undertaken a recent and thorough review of the Group's forecasts and associated risks and sensitivities. Despite the significant uncertainty in the economy and its inherent risk and impact on the business, the Board has concluded, given the level of cash in the business and Group borrowing facilities, the geographical and discipline diversification, limited concentration risk, as well as the ability to manage the cost base, that the Group has adequate resources to continue in operational existence for the foreseeable future being a period of at least 12 months.

Page House

The Bourne Business Park

1 Dashwood Lang Road

Addlestone

Weybridge

Surrey

KT15 2QW

By order of the Board,

Steve Ingham Andrew Bracey

Chief Executive Officer Chief Financial Officer

13 August 2012 13 August 2012

INDEPENDENT REVIEW REPORT TO MICHAEL PAGE INTERNATIONAL PLC

Introduction

We have been engaged by the company to review the condensed set of financial statements in the half-yearly financial report for the six months ended 30 June 2012 which comprises the condensed consolidated income statement, the condensed consolidated statement of comprehensive income, the condensed consolidated balance sheet, the condensed consolidated statement of changes in equity, the condensed consolidated statement of cash flows and related notes 1 to 14. We have read the other information contained in the half yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.

This report is made solely to the company in accordance with guidance contained in International Standard on Review Engagements 2410 (UK and Ireland) "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company, for our work, for this report, or for the conclusions we have formed.

Directors' Responsibilities

The half-yearly financial report is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the half-yearly financial report in accordance with the Disclosure and Transparency Rules of the United Kingdom's Financial Services Authority.

As disclosed in note 2, the annual financial statements of the group are prepared in accordance with IFRSs as adopted by the European Union. The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with International Accounting Standard 34, "Interim Financial Reporting", as adopted by the European Union.

Our Responsibility

Our responsibility is to express to the company a conclusion on the condensed set of financial statements in the half-yearly financial report based on our review.

Scope of Review

We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 30 June 2012 is not prepared, in all material respects, in accordance with International Accounting Standard 34 as adopted by the European Union and the Disclosure and Transparency Rules of the United Kingdom's Financial Services Authority.

Ernst & Young LLP

London

13 August 2012

Condensed Consolidated Income Statement

Six months ended 30 June 2012

The above results all relate to continuing operations.

Condensed Consolidated Statement of Comprehensive Income

Six months ended 30 June 2012

Condensed Consolidated Balance Sheet

At 30 June 2012

Condensed Consolidated Statement of Changes in Equity

Six months ended 30 June 2012

Consolidated Statement of Cash Flows

Six months ended 30 June 2012

Notes to the condensed set of interim financial statements

Six months ended 30 June 2012

1. General information

The information for the year ended 31 December 2011 does not constitute statutory accounts as defined in section 434 of the Companies Act 2006. A copy of the statutory accounts for that year has been delivered to the Registrar of Companies. The auditors reported on those accounts: their report was unqualified, did not draw attention to any matters by way of emphasis and did not contain a statement under section 498(2) or (3) of the Companies Act 2006.

2. Accounting policies

Basis of preparation

The unaudited interim condensed consolidated financial statements for the six months ended 30 June 2012 have been prepared in accordance with IAS 34 'Interim financial reporting' and with the Disclosure and Transparency Rules of the Financial Services Authority.

The unaudited interim condensed consolidated financial statements do not constitute the Group's statutory financial statements. The Group's most recent statutory financial statements, which comprise the annual report and audited financial statements for the year ended 31 December 2011, were approved by the directors on 6 March 2012. The interim condensed consolidated financial statements should be read in conjunction with the Annual Report and Accounts for the year ended 31 December 2011, which have been prepared in accordance with International Financial Reporting Standards ('IFRSs') as adopted by the European Union.

Going concern

The Group's business activities, together with the factors likely to affect its future development, performance and position are set out in the interim management report. The interim management report also includes a summary of the Group's financial position, its cash flows and its borrowing facilities.

The directors believe the Group is well placed to manage its business risks successfully, despite the current uncertain economic outlook. The Group's forecasts and projections, taking account of reasonably possible changes in trading performance, show that the Group should be able to operate within the level of its current committed facilities.

After making enquiries, the directors have a reasonable expectation that the Company and the Group have adequate resources to continue in operational existence for the foreseeable future, a period of not less than 12 months from the date of this report. Accordingly, they continue to adopt the going concern basis in preparing the half-yearly financial report.

New accounting standards, interpretations and amendments

3. Segment reporting

All revenues disclosed are derived from external customers.

The accounting policies of the reportable segments are the same as the Group's accounting policies. Segment operating profit represents the profit earned by each segment including allocation of central administration cost. This is the measure reported to the Group's Chief Executive for the purpose of resource allocation and assessment of segment performance.

a) Revenue, gross profit and operating profit by reportable segment

The above analysis by destination is not materially different to analysis by origin.

The analysis below is of the carrying amount of reportable segment assets and liabilities and non-current assets. Segment assets and liabilities include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. The individual reportable segments exclude income tax assets and liabilities. Non-current assets include property, plant and equipment, computer software, goodwill and other intangible.

b) Segment assets, liabilities and non-current assets by reportable segment