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St Albans, UK, 20th April 2007 – Staff&Line, the European leader in IT management, recorded net earnings of €580,571 in the year ended 31st December 2006. This result does not however reflect the excellent economic performance of the year, as the organisation experienced strong growth and made significant investment.

This investment resulted in non-recurring expenses of €542K, arising from acquisitions made during the course of the year. These costs are shared between head office (€238k) and subsidiaries (€304k).

Excluding the impact of non-recurring expenses, operating profit amounted to €930k on the basis of the new corporate structure and €850k on a like-for-like basis, presenting a 29 percent increase.

The following result are measured in €m (Consolidated)

Income: 2006 published consolidation scope 10.9, 2006 constant consolidation scope 7.79 and 2005 6.89
Salaries and fringe benefits: 2006 published consolidation scope 6.27, 2006 constant consolidation scope 4.51 and 2005 4.03
Profit before non-recurring expenses: 2006 published consolidation scope 0.93, 2006 constant consolidation scope 0.85 and 2005 0.72
Non-recurring expenses: 2006 published consolidation scope 0.62 (of which €77k were exceptional depreciation expenses), 2006 constant consolidation scope 0.32 and 2005 0
Operating profit: 2006 published consolidation scope 0.93, 2006 constant consolidation scope 0.85 and 2005 0.72
Financial profit: 2006 published consolidation scope 0.04, 2006 constant consolidation scope 0.07 and 2005 0.02
Net profit: 2006 published consolidation scope 0.58, 2006 constant consolidation scope 0.85 and 2005 0.93

A year of strong growth:

• Sales grew by 60 percent compared with 2005
• Sales growth on a like-for-like basis was 17 percent, double that of the market.

A year dedicated to European expansion:

This year was marked by Staff&Line’s European acquisitions of Sight International (Spain, Portugal and Italy) and SAM UK in England. These acquisitions give Staff&Line technical expertise and manpower in the local territories, enabling it to win new European customers.

Incorporation of four companies in 2006: a remarkable performance in relation to the company’s size

Thanks to a plan to rapidly incorporate these four companies in the year, synergies have been realised and the first sales were achieved in October in southern Europe and in December in the UK.

These investments have naturally impacted subsidiaries’ margins in 2006, due to agreed efforts by the group in restructuring its new subsidiaries, helping them to get in line with group standards (localisation of commercial structure for all countries, recruitment, training, marketing launches...)

Sylvain Gauthier, Chairman of Staff&Line, explains: "These investments have enabled us to transform our wholly French company into a structured European group, capable of absorbing future growth. Moreover, the total cost of these acquisitions, including all associated expenses, is a reasonable amount of 3 million euros for a full year contribution to total sales of 3.7 million euros".

2006 Consolidated Balance Sheet 2006 (in €m)

Assets:

Long-term assets: 3.03
Current assets: 6.92
Cash: 2.64
Other assets: 0.33

Liabilities

Owners' equity: 8.17
Financial liabilities: 0.72
Current liabilities: 2.53
Deferred income: 1.50

A sound balance sheet:

The company’s position remains sound following the financing of all acquisition and associated non-recurring expenses.

In particular, the level of debt remains low and only comprises cash advances. The net cash position is around 2 million, taking into account exceptionally high client credit at the end of the year, due to the seasonal nature of the activity.

Pre-paid income corresponds to maintenance contracts acquired in 2006 and not recorded.

Outlook 2007: return on investments

The new subsidiaries, having been incorporated during 2006, will be fully operational and delivering the expected results in 2007.

With the launch of EasyVista 2007, Staff&Line expects to have the same commercial success with its subsidiaries as it had in France. The company’s management team forecasts sales growth of between 30 and 40 percent for the next financial year, linked to opportunities identified in southern Europe and the incorporation of the UK subsidiary’s business over 12 months.

Significant sales of licences in these subsidiaries should lead to increased profitability and the company should attain a margin rate of two figures.

For further information:
Paula Elliott
C8 Consulting Ltd for Staff&Line UK
+44 (0) 7894 339645/ +44 (0) 118 9001132
paula@c8consulting.co.uk

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