Progility Regulatory News (PGY)

ILX Group PLC

("ILX" or the "Group")

PRELIMINARY RESULTS FOR THE YEAR ENDED 31 MARCH 2011

ILX Group plc (AiM: ILX), the AIM quoted provider of e-learning software and consulting services, announces its unaudited preliminary results for the year ended 31 March 2011.

Corporate Highlights

·; Strong growth in International revenues, particularly Australia and Middle East

·; UK revenues remain robust with increased profitability

·; ILX reclassified as a software business

·; Octopus Capital for Enterprise increases holding to 20%

·; ILX remains global market leader in PRINCE2®

·; Board strengthened by the addition of Chris Allner and Eddie Kilkelly

·; Financial classroom training business (CTG) closed during the year

Financial Highlights

·; Profit before tax (from continuing operations) £1.42 million (2010: £0.76 million)

·; Revenue of £12.89 million (2010: £11.87 million)

·; Software revenues comprise over 50% of Group revenues

·; Strong operating cash flow

·; Net debt reduced to £1.89 million (2010: £3.16 million)

·; Fully diluted earnings per share from continuing operations 4.06p (2010: 2.64p)

·; Dividend reinstated at 1.50p per share with scrip alternative

·; Additional equity placing raising £900,000 at 26.5p per share

Ken Scott, Chief Executive, ILX Group commented:

"This has been a defining year. The growth in software sales and the successful international expansion has delivered significant growth in operating profit. The closure of CTG has left a more focused business, which has flourished.

Our e-learning solutions and technology platform provides a highly efficient and effective way for our customers to accredit themselves, or their staff, by delivering excellent value for money together with an enjoyable user experience. At a time when both the private and public sector have to put all costs under the microscope, e-learning offers an engaging way for staff to develop themselves, at their desks or on the move, at an affordable cost.

We have seen significant expansion internationally, whilst maintaining our domestic position, and have an excellent opportunity to further expand the business. We look forward to a period of sustained organic growth."

27 June 2011

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Editors' Note

ILX Group plc (www.ilxgroup.com) is a leading provider of Best Practice learning products and services to the private and public sectors. ILX Group offers a variety of accredited technology led courses through a blend of traditional classroom, workshops & live forums and across all multi-media platforms: e-learning, social learning & mobile learning. It has developed its own proprietary software and is the market leader in PRINCE2. It trades through two divisions:

1. Best Practice provides e-learning, instructor-led learning and implementation consultancy principally to the programme and project management, IT service management and business finance markets.

2. International was formed in late 2009 and provides products and services to overseas markets, including Australia, New Zealand, Middle East, US as well as the UK and across Europe.

ENDS

Chairman's Statement

For the year ended 31 March 2011

I am pleased to present the results for the year ended 31 March 2011.

General Update

The year has been a defining one for the Group. Whilst the closure of CTG represented a setback, this left a more focused business which has flourished and delivered significant growth in operating profit, driven mainly by growth in software sales and international expansion.

The Company's CTG division, delivering financial classroom training to the UK investment banking sector, delivered three years of strong financial performance post acquisition, but the performance declined significantly thereafter. It was therefore with regret that we announced in our October 2010 trading update that the division was to be closed from December of that year.

This has had the effect of galvanising and strengthening management's focus on the core business. This has further developed the reputation of ILX, both in the UK and internationally, as a major player in the e-learning technology space, not only in the project and service management fields currently served, but also as an innovative e-learning software developer in its own right. Revenues from software licences now exceed 50% of Group revenues, which has resulted in the Group's London Stock Exchange sector reclassification from Business Training to Software, with effect from 20 June 2011.

Whilst the Group continues to offer both software and classroom-based learning to customers, the software led solutions remain the core of the Group's growth strategy. Our software and technology provides a highly efficient and effective set of tools for our customers to accredit themselves, or their staff, delivering excellent value for money and an enjoyable user experience. This is of great importance, particularly in the cost constrained environment of the current economic climate.

Financial Results

In accordance with International Accounting Standards, items relating to the CTG business are presented separately on the face of the Consolidated Statement of Comprehensive Income, as loss from discontinued operations, which provides users of the accounts with a clearer picture of the performance of the remaining business.

Revenue for the year was £12.89 million (2010: £11.87 million), an increase of 9%. Operating profit was £1.73 million (2010: £1.06 million), an increase of 64% and an improvement in operating margin. Profit before taxation was £1.42 million (2010: £0.76 million), an increase of 88%. Diluted earnings per share, from continuing operations, increased by 54% to 4.06p (2010: 2.64p).

Loss from discontinued operations was £10.48 million (2010: £2.26 million), principally comprising write-downs of goodwill and other intangible assets acquired with CTG of £10.35 million (2010: £2.29 million).

Net debt was reduced during the year by £1.27 million to £1.89 million (2010: £3.16 million), strengthening the Group's balance sheet.

These results are explained in fuller detail in the Finance Review.

Dividend and Capital Restructure

Your Board continues to believe that, whilst there are substantial opportunities for growth, an annual dividend is nevertheless an important part of our plan to deliver long-term shareholder value. Accordingly, in 2006, the Group commenced a dividend payment of 0.75p per share which was doubled to 1.5p per share in 2008. Additionally, in 2009, a scrip alternative was introduced allowing investors who wished the opportunity to take their dividend in shares rather than cash. This option was taken up by 12.6% of the Company's shareholder base.

On 13 August 2010, the Group announced that it was in discussions with its bankers to refinance its term debt and invoice finance facility, and this refinance was put in place by 30 September 2010. This was required to address cash flow issues arising from both the unsuitability of the bank's invoice finance facility for international trade and also the continued decline in CTG, which had in previous years delivered substantial operating cash flow in the first half of the year. Regrettably, this necessary refinance required the cancellation of our dividend for the year ended 31 March 2010.

In addition, the impairment charges arising from the closure of CTG, whilst not affecting the Group's cash position, gave rise to a loss in the Company's distributable reserves. This in turn required the Company to apply to the Court to effect a capital restructure before further dividends could be declared. Permission to effect the restructure was granted in March 2011.

This action has allowed the Board to re-instate the dividend, which we have chosen to do at the 1.5p per share level, whilst at the same time maintaining the scrip option. Shareholders who wish to elect for the scrip issue should consult the notes in the Notice of Annual General Meeting at the back of this document. The Directors' confirm their intention to take up their entitlements to the scrip option.

The dividend will be paid on 14 October 2011 to shareholders on the register on 5 August 2011, and the shares will therefore become ex-dividend on 3 August 2011. Elections for the scrip issue need to be made by 16 September 2011.

Fundraising and Board Appointments

Further to the refinancing, the Group raised a further £0.90 million through the placing of 3,396,228 shares at 26.5p to the Octopus Capital for Enterprise Fund. This cash was used to reduce the most expensive tranche of the Group's debt and also to fund international growth.

This investment took Octopus' shareholding in the Group to 20%. Following this, Chris Allner of Octopus Ventures was appointed to the Board as a non-executive director on 30 November 2010.

In addition, Eddie Kilkelly, Chief Operating Officer, joined the Board as an executive director on 9 February 2011. Eddie joined the Group in 2006 as Operations Director, progressing to Sales Director and then Managing Director of Best Practice before becoming Chief Operating Officer.

I am delighted to welcome both to the Board, thanking them for their contributions to date and looking forward to their input and experience as the Group expands.

Outlook

The last two years have been amongst the most difficult economic conditions in living memory, and yet ILX has delivered significant expansion internationally whilst maintaining our domestic position. The UK remains a challenging market but one where our products and approach are well placed to thrive. Internationally the opportunities for growth are very significant and the challenge for us will be the effective management of this growth. We have made significant strides in the year just ended and look forward to a period of sustained organic growth in the medium term.

Once again I would like to thank management and all staff. Our International division deserves congratulations for an exceptional performance; our UK and operations teams deserve praise for increasing profitability in testing market conditions, and recognition to our technology team is due for their contribution to maintaining the creativity and innovation within our e-learning solutions.

Paul Lever

Chairman

27 June 2011

Business Review

For the year ended 31 March 2011

I am delighted with the results for the year ended 31 March 2011. The Group experienced its fair share of challenges with the closure of CTG, and a necessary refinancing of bank debt. However, the Group met its market expectations despite these setbacks and has delivered growth in profit before tax of over 80%.

A Technology Business

Last year, I highlighted that the Group's origins had been in e-learning and although some of the subsequent expansion had come through classroom training, our core strength as a software and technology provider was re-emerging. With our recent change in sector from Business Training to Software, it is worth both reinforcing and further explaining this point.

The way people learn is becoming more and more subjective with great variances in styles and methods of learning, driven by cultural and territorial nuances as well as individual customer and business preference for learning. At ILX, we aim to provide the best quality learning in a form driven by customer demand. The economic advantages of e-learning, together with the way technology now infuses all aspects of our lives, clearly points to increasing demand for software products, and this is borne out by the fact that the majority of our learners, and over 50% of our revenues, now come from software sales.

This trend is accelerating with the advent of new technology in social media, smart phones, and tablets. Working and communicating whilst on the move is becoming an accepted and increasingly important part of our lives. The ability to learn whilst on the move is now another key attraction of e-Learning, in addition to the accepted benefits of learning at the users' own pace, in their own time, and without the need for travel.

There remains considerable demand for learning in more traditional classroom settings, and we will continue to provide this to customers; not just because of the profit it generates but also because it is the real experience in the classroom that feeds back into ensuring our e-learning products are both fun and effective. Additionally, the use of technology within the classroom itself provides many opportunities for innovation as well as a key differentiator in what is a competitive marketplace.

However, our proprietary software gives more to ILX as a technology business than merely a competitive edge. The scalability of software sales, and the minimal infrastructure required for expansion, has been key to our ability to expand rapidly. By way of example, in the space of 12 months we have been able, from a standing start, to take a substantial share of the Australian PRINCE2® market, driven principally by e-learning sales direct to consumers in a market previously covered almost entirely by classroom training.

Corporate Training Group (CTG)

Whilst the Group overall had a strong year, the closure of the CTG division was nevertheless a major event which needs to be addressed in this review.

CTG was acquired in July 2006. From that point, and while the newly formed Best Practice division was consolidating, it provided the lion's share of profit contribution to the Group, and generated three years of excellent performance within ILX.

From the beginning of 2009, the disruptions within the global investment banking industry began to affect the CTG business as training budgets were squeezed with a consequent impact on both revenues and margins. The following year saw the departure of Peter Evans together with a number of the senior CTG team. Peter was a main board member and the founder of CTG.

Whilst we made substantial efforts to shore up and protect the business so that it could return to profitability, we proved unable to do so in the wake of the loss of some key clients and a number of further staff defections. More importantly perhaps, we were unable to achieve one of the key strategic objectives of the CTG acquisition, which was to introduce significant levels of e-learning to the CTG offering. As the business had lost money since October 2009, we took the decision to close it down, with an arrangement with another training provider to take on the remaining customers and leads for a contingent fee.

Whilst a disappointing outcome, the closure of CTG brought to an end a difficult period for the business and allowed us to move on and focus firmly on our future.

Divisional Structure and Operating Performance

With the closure of CTG, ILX Group now operates as two principal divisions; an International division, which covers sales outside the UK, and a UK domestic division, which sells to UK customers (including UK-based multinationals) and also manages our global delivery and operations. Technology, finance, and other support functions are managed centrally.

The performance of these divisions is covered in more detail in the Finance Review, but as we expected, it has been the International division that has delivered the growth, with revenues increasing by 79% to £3.24 million. The UK division has also performed creditably in difficult conditions, delivering a marginally improved profit despite revenues declining slightly, down 3% to £9.31 million.

The Group also reports separately the results of its much smaller Finance division, which following the closure of CTG now comprises purely sales of financial e-learning. This has been run as a distinct entity due to the longer sales cycle and more customised nature of the services provided, but we expect to integrate it within the remainder of the business when appropriate.

The financial e-learning sales, at £0.34 million for the year, are down on the previous year (£0.49 million) but the nature of these sales, with large and sometimes irregular contracts, does give rise to fluctuations. The division delivered a creditable and profitable result.

At Group level, revenue of £12.89 million (2010: £11.87 million) represented growth of 9%. The growth of the International division, and the improved profitability of the UK division, combined with a 10% reduction in central costs, improved operating margins to 13.4% (2010: 8.9%) and operating profit to £1.73 million (2010: £1.06 million).

Our Strategy and Vision

ILX is in the business of transforming the way people learn. In essence, this means that our focus is on the learning experience of our users, versus just the delivery of our products and services. Although this may appear to be merely a play on words, it is having a profound influence on the culture within ILX, and on how we are developing the business.

Over the next period we will be announcing a number of initiatives which will support this and at the same time enable us to scale the ILX business significantly.

At the start of the year, we set out four key drivers for strategic growth over a 5 year period:

Build on our position as a global market leader in the PRINCE2® project management qualification by focusing on innovative product development and customer retention. With over 10% of the PRINCE2® market, measured by exam passes, and with over 5,000 customers in over 100 countries, ILX remains the major player in this area. During the year our e-learning products continued to be at the forefront of this, accounting for 52% of our PRINCE2® revenues (2010: 50%). Customer retention metrics, both in terms of repeat business and renewed software licences, have shown improvement year on year.

Leverage our proprietary technology to drive significant international expansion, focusing initially on PRINCE2® and project management where we can disrupt established markets. Our International division grew sales by almost 80% in the year, from £1.81 million to £3.24 million. The major areas of growth were in Australia and New Zealand, and the Middle East, particularly Oman. As noted already, the focus on PRINCE2® and e-learning software in Australia allowed us to take substantial market share in a rapid timeframe.

Develop our strong capability in other markets for Finance, Service Management, and Software Testing to build market leading positions. There remains much to do in this area which is a key focus area for growth. Our PRINCE2® revenues, which grew by 5% in the year, still account for 58% of our business (2010: 60%), whereas ITIL® and ISO20000® revenues, which grew by 3% in the year, only account for 9% of our business (2010: 10%), despite the market for the latter being larger than that for PRINCE2®.

We have made progress in developing products in other Office of Government Commerce (OGC is a division of the UK Treasury Department) accredited areas, principally Programme and Project Sponsorship, Project Support (P3O®), Risk Management (M_o_R®), and Value Management (MoV), all of which have been developed during the year. In addition to MSP® and the APM Introductory Certificate in Project Management, revenues increased by 18% and accounted for 19% of the business (2010: 18%).

In addition, sales of our Portal, which provides access to our full range, increased by 162% during the year to £0.8 million (2010: £0.3 million).

Focus on increasing the number of learners worldwide using ILX technology. Whether an e-learning user or a classroom student, all our learners are exposed to our technology, whether this is straightforward progress through a course, access to revision games for hand-held devices, or a classroom-based simulation. During the year we licensed e-learning for 60,000 users, and gave access to our portal to 30,000 users. We also welcomed 15,000 students to our classroom events.

In the coming year we intend to build heavily on this progress through:

Developing the ILX brand.As we expand into new territories we are very aware of the need to elevate the ILX brand to reduce our reliance on sales-led new business generation and increase awareness, customer retention and e-commerce.

Continuing to expand our international footprint by further developing existing bases in Australia, the Middle East, and Scandinavia, together with expansion into Central Europe, Africa, and the USA. Over the next two to three years we expect international revenues to outstrip those generated from the UK.

Make rapid inroads into markets outside PRINCE2®, particularly ITIL®, Software Testing, and Finance e-Learning. We aim to do this through more investment in marketing, product management, and sales training.

Markets and Risks

Global Coverage

ILX Group now operates internationally across the globe, with over 5,000 customers in over 100 countries and over 30% of revenues now coming from outside the UK. Revenues for the year, with the comparative for last year, by geographic area were as follows:

Our overall revenues from the UK declined by around 6% principally due to the expected tightening in the public sector, with our UK public sector revenues decreasing by 18% to £2.28 million. The effect of the public sector cuts is still present but with this sector accounting for just 18% of revenues (2010: 24%) our exposure is manageable. We expect to see more centralisation of purchasing and despite the obvious tightening of public sector budgets the announcement post year end of a major cross-UK government contract win for consultancy bodes well for our continued success in this area.

Elsewhere in the UK we have seen a highly competitive environment, particularly for public classroom training. In the consumer marketplace, we have seen significant movement from classroom delivery to e-learning; whilst this transition has adversely affected top line revenues, the higher profitability of the software sales has been a major factor behind increased UK profitability.

With the establishment of the Sydney office at the start of the financial year, Australia and New Zealand now represent the second largest area in terms of revenues for the Group. Here the sales are almost entirely e-learning with approximately two thirds being consumer sales, but there is significant opportunity to expand into more corporate sales in the coming year.

In terms of size, Europe and Scandinavia follows with a number of key finance e-learning contracts in this area. Ken Baek, who joined during the year to develop our business in Scandinavia, has been promoted to take on a wider role developing opportunities across mainland Europe.

The Middle East revenues have been secured principally in Oman and thus have been largely unaffected by the political turmoil experienced in this region in recent months. In contrast to the Australian operation, our Omani operations are almost entirely consultancy and classroom based, reflecting the differing cultural preferences.

Subject Areas

Our revenues by subject for the year, with the comparative for last year, were as follows:

The revenues in the e-Learning column relate specifically to software licences and blended products (for the 5 main subject areas) and bespoke development (other revenues); events revenue relates to classroom events, consultancy, and provision of exams (for subject areas) and recharged expenses (other revenues).

PRINCE2® remains a key area with over half our revenues derived from this qualification, where our market leading position gives us a strong competitive position. Our aim continues to be to exploit this position globally whilst at the same time building up our revenues in other subjects to reduce our overall exposure to PRINCE2®.

Values and People

The executive management team within ILX Group is experienced and committed. We work exceptionally well as a team and it is the strength of this dynamic that forms the foundation upon which we are building the exciting future for ILX. This commitment and teamwork is reflected throughout the staff across the business. Our core values of ownership, passion, teamwork and making a difference continue to be at the heart of our culture.

There have been two changes which took place during and immediately after the year end. Firstly, we strengthened the management team with the addition of Mel Scott-Taylor as Chief Marketing Officer. Mel joined us from Disney where she was responsible for marketing across Europe, Middle East and Africa for the Disney Channel. Secondly, I am delighted that Eddie Kilkelly, our Chief Operating Officer, joined the main Board in February 2011.

Martyn Kinch, who heads up our International division, and David Willis our Chief Technology Officer, complete the team.

I would like to thank all our staff for their hard work and determination in what has been a good year, and we look to the future with confidence.

Ken Scott

Chief Executive Officer

27 June 2011

Finance Review

For the year ended 31 March 2011

Financial Results

Operating Performance

The Group delivered revenues of £12.89 million (2010: £11.87 million) and operating profit of £1.73 million (2010: £1.06 million). This represents a strong performance with revenue growth of 9% translating into operating profit growth of 64%.

In accordance with IFRS 5, the results from the Group's CTG division closed during the year are presented as a net loss from discontinued operations on the face of the Statement of Comprehensive Income. The loss from discontinued items was £10.48 million (2010: £2.26 million), and principally comprises write-downs of goodwill and intangible assets. All expenses of the closure have been fully provided for within these figures.

The revenue growth for the year was driven by the International division, which grew by 79% to £3.24 million, representing 25% of Group revenues (2010: 15%). The UK division revenues fell marginally by 3% to £9.31 million, and the Finance e-learning revenues contributed £0.34 million (2010: £0.49 million).

A combination of a gradual shift in revenue from classroom events to e-learning, and greater efficiencies in product and material costs, increased the Group's overall gross margin to 55.2% (2010: 51.7%), growing Gross Profit by 16%. The Group has kept a tight rein on fixed costs through the year and despite the international expansion, these increased by just 6% for the year. Operating profit margin as a result improved to 13.4% (2010: 8.9%).

At divisional level, the breakdown of revenues and profits is disclosed in the notes to the accounts as required by IFRS 8. This breakdown has changed from last year as a result of the separate presentation of the International division as well as the closure of CTG. These highlight that the UK division increased its contribution to Group operating profits by 4% despite the slight fall in top line revenues, and that the International division was able to substantially increase both profit and profitability during the year.

Given that the operations of the two principal divisions are the same aside for geography, and that the finance e-learning revenues are relatively small in comparison, we have taken the decision not to apportion between the divisions the central costs relating to technology, IT, finance, and personnel. These costs, together with the costs of the Board, advisors, and other AiM related expenditure, are presented separately as unallocated central costs. The total figure of £1.89 million (2010: £2.15 million) represents a decrease of 12%. As noted last year, this saving in part is due to the loss last year of the Business Development Director role.

Whilst we are pleased with our operating margin of 13.4%, the high profitability associated with software sales and the relatively high operational gearing in the business gives plenty of opportunity for this to be improved upon as the business grows.

International expansion

Revenues delivered outside the UK were £3.89 million (2010: £2.32 million), growth of 70%. These revenues include all of our International division revenues plus the international element of the Finance e-learning sales and some sales to multinational business where the sales were made in the UK by the UK division, with elements of the delivery occurring internationally.

The Company now has three trading subsidiaries: ILX Group Inc, a "virtual office" subsidiary in New York, which dealt solely with CTG-related business during the year; ILX Group Pty Limited, an Australian subsidiary based in Sydney, which delivered £1.19 million in revenue during the year, and ILX Group Aps, a Danish subsidiary which started trading after the year end.

These subsidiaries remain sales and marketing led with all financial management and operational support handled from the UK.

Finance costs

The Group incurred finance costs of £0.31 million (2010: £0.30 million) during the year. This cost comprised £0.33 million in interest on bank loans and facilities (2010: £0.34 million); £0.07 million in loan arrangement costs and other bank fees (2010: £0.05 million); and a credit of £0.09 million relating to the Group's interest rate swap arrangement (2010: £0.09 million).

Under IAS 39, fees incurred in securing term finance, including bank arrangement fees, are capitalised and amortised over the term of the debt. At the year end, the remaining balance of such fees was £0.18 million, due to be fully written down by 30 September 2013 at a rate of £0.07 million per annum.

Profit before tax

Profit before tax was £1.42 million (2010: £0.76 million), in line with market expectations and an increase of 88%.

Taxation

The tax charge for the year was £0.40 million (2010: £0.21 million), representing 28% of Profit before Tax (2010: 28%).

Earnings per share

Earnings per share from continuing operations were 4.14p (2010: 2.67p). Diluted earnings per share from continuing operations were 4.06p (2010: 2.64p), increases of 55% and 54% respectively.

Including the impact of discontinued operations, basic loss per share was 38.16p (2010: loss per share of 8.44p), and diluted loss per share was 37.42p (2010: 8.36p).

Cash Flow and Net Debt

Cash generated from continuing operating activities was £1.79 million (2010: £1.72 million). This represents 103% of operating profit (2010: 163% of operating profit). The figure for the year ended 31 March 2010 was distorted by timing differences around the year end.

The Group continues to manage working capital tightly. Adjusting for continuing operations and sales tax, trade receivables at year end represented 60 days' sales (2010: 64) although this figure is affected by the Group's seasonality which gives higher sales in March than any other month. Cash sales made up 30% of total sales (2010: 30%). In addition, our deferred revenues, representing amounts paid by customers for services not yet delivered, increased by 31% to £1.50 million (2010: £1.14 million).

During the year, the Group refinanced its bank debt and also raised £0.84 million in additional capital. The bank refinance was required as the Group's confidential invoice finance facility was providing an unacceptable level of visibility and headroom, given in particular the Group's international expansion. In addition, the decline and closure of CTG meant that, in the short term at least, the Group's profit and cash profile once again becomes strongly weighted towards the second half of the year.

Net debt at the year end, defined as all bank debt, less cash at bank, was £1.89 million (2010: £3.16 million). This represents 1.1 times operating profit from continuing operations (2010: 3.0 times). This comprised £2.20 million in amortising 3-year term debt, £0.40 million in 3-year bullet debt repayable on 30 September 2013, and £0.55 million drawn on a £0.95 million revolving credit facility, less £1.27 million in cash balances.

Interest Rate and Currency risk

The Group entered into an interest rate swap agreement with Barclays Bank in February 2008, to hedge its exposure to interest rate movements in respect of its term loan. This agreement effectively fixes LIBOR to 5.7% for £1.27 million of the Group's debt at 31 March 2011, reducing to zero on a straight line basis by February 2012. To the extent that the Group's debt is not covered by this hedge, the Group is exposed to changes in LIBOR.

18.7% of the Group's turnover for the year was invoiced in 6 separate foreign currencies (2010: 8.9% in 5 foreign currencies). These are: Australian Dollars (8.9%), Euros (3.6%), US Dollars (3.1%), New Zealand Dollars (1.6%), South African Rand (0.9%), and Danish Kroner (0.5%). At the year end, £0.95 million of assets (2010: £0.58 million) and £0.42 million of liabilities (2010: £0.02 million) were denominated in these currencies. No currency hedging arrangements were in place during the year. The Group maintains currency accounts in all these currencies except South African Rand and New Zealand Dollars, in order to match currency income and expenditure and to benefit from bulk rates on transfer to sterling.

Dividend

We commenced a dividend programme in 2006 which has returned more than £0.7 million to shareholders to date. Regrettably during the year, the Group was forced to cancel its proposed dividend in order to secure the necessary refinance to support the growth of the business. As noted in the Chairman's statement, the Board is aware of the importance to our shareholders of maintaining an annual dividend but is also committed in the short term to reducing the Group's net debt.

In 2009 we introduced a scrip dividend scheme under which shareholders were given the opportunity to elect to receive new shares in the Company instead of a cash dividend. Under this scheme a dividend of 1.50 pence per share was paid in respect of the year ended 31 March 2009, with elections to receive the scrip issue totalling 12.6% of ordinary shares in issue.

The write-down of goodwill and intangibles resulting from our closure of CTG necessitated a capital restructure, whereby the Company has cancelled its share premium account. This cancellation, which was approved by the High Court in March 2011, has no effect on cash or on the rights attached to the Company's shares, but has the effect of reinstating distributable reserves allowing dividends to be resumed.

This dividend of 1.50 pence per share and the scrip alternative will therefore be resumed with respect to the year ended 31 March 2011.

Jon Pickles

Chief Financial Officer

27 June 2011

Consolidated Statement of Comprehensive Income

For the Year ended 31 March 2011

Consolidated Statement of Financial Position

As at 31 March 2011

Consolidated Cash Flow Statement

For the year ended 31 March 2011

Notes to the Preliminary Results

For the year ended 31 March 2011

1 Results

The financial information set out in this unaudited preliminary announcement does not constitute the statutory financial statements for the years ended 31 March 2011 or 2010 but is derived from those accounts. Statutory accounts for 2010 have been delivered to the registrar of companies, and those for 2011 will be delivered in due course. The auditors have reported on the accounts for 2010; their report was (i) unqualified, (ii) did not include a reference to any matters to which the auditors drew attention by way of emphasis without qualifying their report and (iii) did not contain a statement under section 498 of the Companies Act 2006. The auditors have not yet reported on the accounts for 2011.

2 Accounting policies

The principal accounting policies of the Group are set out in the Group's 2010 Annual Report and Financial Statements. The policies have remained unchanged for the year ended 31 March 2011.

3 Segment reporting

In accordance with IFRS 8, the Group now presents its segmental analysis in terms of its three operating divisions, UK Best Practice, International Best Practice and Finance e-Learning, as opposed to two segments of Best Practice and Finance. The analysis of revenue and profit by division for the period, and restated for prior periods, is as follows:

The discontinued operation is treated as a further segment under IFRS 8 and analysis of the results of this segment is provided in Note 4.

In addition, revenues for the year and prior year split by geographical area were as follows:

4 Discontinued Operations

The results of the Corporate Training Group (CTG), which was closed during the year, have been included in the Consolidated Statement of Comprehensive Income as loss from discontinued items in accordance with IFRS 5. The comparatives have also been restated in the Consolidated Statement of Comprehensive Income. A breakdown of these results is as follows:

5 Earnings per share

Earnings per share is calculated by dividing profit attributable to shareholders by the weighted average number of shares in issue during the year.

Diluted earnings per share is adjusted for outstanding share options and the average option price, using an average interest saving of 8.0% (2010: 8.0%).

6 Dividend

As stated in the Directors' report, the directors recommend payment of a dividend of 1.50 pence per share, subject to shareholder approval at the Annual General Meeting on 20 September 2011. This dividend will be paid on 14 October 2011 to shareholders on the register at 5 August 2011. The shares will therefore become ex-dividend on 3 August 2011. A scrip alternative will be offered, at the average share price for the period 3 August to 9 August inclusive. Shareholders who elected to receive the scrip alternative in 2009 will receive the scrip alternative for 2011 automatically. Shareholders who wish to elect to receive the scrip alternative will need to obtain a mandate form from the company and return it to the registrars no later than 10am on 16 September 2011.

These financial statements do not reflect this dividend payable, which will be accounted for in the statement of changes in equity as an appropriation of retained earnings, in the year ending 31 March 2012.

7 Annual report

The annual report will be sent to shareholders in due course and will also be available from the Company's website www.ilxgroup.com and from the Company's registered office at 1 London Wall, London EC2Y 5AB.