Acquisition of Milestone Operations

STAFFLINE GROUP PLC

("Staffline" or "the Group")

Acquisition of Milestone Operations

Staffline Group, the Staffing and Employability organisation, providing people and operational expertise to industry, today announces the acquisition of Milestone Operations Limited ("Milestone"), a recruitment business specialising in temporary and permanent jobs for professional drivers, warehouse staff and industry experts within the transport, distribution, industrial and utilities sectors.

Milestone services client sites throughout the UK with dedicated teams based at six operating centres, with a focus on LGV/HGV jobs as well as forklift, warehouse, office and technician jobs. Milestone manages recruitment with a unique Driver Performance Management System and Reward Scheme, designed to help improve driver performance through training, serving to improve efficiencies for clients and reward drivers for their loyalty and good performance.

As previously indicated, the Group continues to see strong levels of demand for HGV drivers, combined with an ongoing systemic shortage of available HGV drivers in the UK. The acquisition therefore represents an attractive strategic fit with Staffline's existing driving division, Driving Plus, strengthening the Group's geographic reach across the UK, as well as bringing a blue chip client base.

The acquisition will be earnings neutral this year and is being funded from the Group's existing bank facility.

Andy Hogarth, Chief Executive of Staffline, commented:

"We are constantly looking for bright, talented businesses to join the Staffline Group. Milestone is not only an expert in the driving market, which is a key focus for growth, but its culture of training and developing its employees while providing the most efficient services for its clients is a perfect match for Staffline. The combination of the two businesses creates one of the largest specialist driving recruitment businesses in the UK and will position us strongly in this growing market."

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About Staffline

Staffline is a leading outsourcing organisation providing Staffing services to industry, supplying up to 36,000 workers every day to more than 1,300 clients. The Group is also a leading provider of services in to the Government funded Welfare to Work and Skills arena across the UK.

The business comprises two key areas:

Staffing Services

Specialising in providing complete labour solutions in agriculture, food processing, manufacturing, e-retail, driving and the logistics sectors, the Staffing business operates from well over 300 locations in the UK, Eire and Poland.

The Staffing brands include:

· Staffline OnSite, based on clients' premises and providing both blue and white collar, out-sourced, temporary workforces

· Select Appointments, a high street branch-based operation providing white collar office staff, operated entirely on a franchised basis by independent business owners

· Staffline Express, a high street branch based operation

· Driving Plus, providing HGV drivers to the logistics industry

· Staffline Agriculture, providing workers to the UK farming and growing sectors

Employability, Skills and Justice

PeoplePlus is one of the largest Prime Contractors of the Work Programme in the UK. Our Employability, Skills and Justice division has over 150 locations nationwide. Contracts include:

· Work Programme, prime contractor in nine regions in England and four sub-contracted regions

· Steps to Success, prime contractor in Northern Ireland

· Skills Funding Agency - managing the Offenders Learning and Skills Service ("OLASS 4")

· The Money Advice Service ("TMAS")

· Independent Living Services

· New Enterprise Allowance scheme - supporting people to become self-employed

· Suffolk County Council MyGo centre supporting youth employment

· Ministry of Justice Transforming Rehabilitation in Warwickshire and West Mercia

The Group also operates in the Kingdom of Saudi Arabia and Australia and provides grade 2 training services in the UK through:

· Elpis, a national training consultancy,

· Learning Plus, an e-learning platform

· Skillspoint, a procurement consultancy specialising in helping employers benefit from government funded, work-based training