Work Group Plc to seek admission to AIM

Work Group plc, a UK recruitment services provider, announces its intention to seek admission of its ordinary shares to trading on AIM, the market for small growth companies operated by the London Stock Exchange, and to raise approximately 7 million through a placing to institutional and VCT investors. Admission is expected to occur in March 2006.

Work Group offers a range of bespoke resourcing solutions aiming to enable employers to recruit and retain staff more effectively, thereby reducing their traditional reliance on third parties such as head-hunters and recruitment firms. Central to Work Groupís approach is the concept of ëdirect resourcingí ñ the establishment and maintenance of a direct relationship between employer and prospective employee. The Company believes direct resourcing provides an efficient and cost effective alternative to traditional third party based recruitment strategies and is a growing trend amongst UK employers.

The Company was founded in 2000 by the current executive management team ñ Simon Howard (Executive Chairman), Michael Warren (Group Finance Director) and Steve Halford (Group Managing Director) ñ with 1 million of their own funds. Additional funding has been provided by Penta Capital and Jon Moulton.

Since establishment, Work Group has grown rapidly, both organically and through acquisition. The Company recently came eighth in the 2005 Sunday Times Fast-Track 100 survey. The most recent acquisition, Armstrong Craven, one of Europeís largest executive research companies, was completed in October 2005, enabling Work Group to incorporate a direct resourcing alternative to a head-hunting firm in its portfolio of services.

In the year ended 31 December 2005, Work Group recorded EBITDA of 2.12 million on net fee income of 11.9 million, in each case on a pro forma basis assuming the acquisition of Armstrong Craven had occurred on 1 January 2005.

Work Group employs 190 people, all of whom have share options, at six offices in the UK. It has over 150 clients, predominantly in the private sector, the majority of which are large, blue-chip organisations. Keith Cameron (currently HR Director of Marks & Spencer plc) and Steve Bodger (currently a Director of Alchemy Venture Partners) will be joining the Work Board as non-executive directors.

Work Group is proposing to raise 7m, before expenses, by way of a placing of new ordinary shares to institutional and VCT investors in the UK, in order to repay existing acquisition facilities and provide balance sheet flexibility to continue the implementation of its buy-and-build strategy. In addition, it is the intention of Penta Capital and the executive directors to realise a portion of their equity through a placing of existing ordinary shares.

Simon Howard, Executive Chairman, Work Group, said:

ìJoining AIM is an important step in Workís growth plan and we believe it will be of great benefit to clients, staff and shareholders alike. We have an acquisitive track record, and are going to market in order to obtain the financial flexibility to continue our ëbuy and buildí strategy.

ìThe recruitment market is undergoing fundamental change. Recruitment and high staff attrition are expensive overheads for employers who face persistent pressure to manage recruitment costs and to improve efficiencies. We believe that this will lead to a growing demand for the concept of direct resourcing and provide significant growth potential for Work.î

Altium is acting as Nominated Adviser and Broker to the Company.