The Morson Group PLC have announced their preliminary results for the half year ended 30 June 2007.

Morson, the UK's leading provider of technical contract staffing, supplying over 8,000 highly skilled white collar personnel to the Aerospace and Defence, Nuclear, Power and Rail industries, is pleased to announce its interim results for half year ended 30 June 2007, following its admission to AIM on 30 March 2006.

Morson (AIM: MRN.L) the UK's leading provider of technical contract staffing, supplying over 8,000 highly skilled white collar personnel to the Aerospace and Defence, Nuclear, Power and Rail industries, is pleased to announce its Interim results for the six months ended 30 June 2007.


Highlights

-         Strong trading performance across all sectors
-         Turnover up 23.7% to £194.0m (H1 2006: £156.8m)
-         Operating profit up 21.4% to £6.3m (H1 2006: £5.2m)
-         Net Fee Income up 29.8% to £16.4m (H1 2006: £12.7m)
-         Profit before Taxation £5.4m (H1 2006: £3.3m)
-         Basic EPS of 8.21 pence (H1 2006: 7.05 pence)
-         Several significant contract renewals with major existing clients
          including:
-         Five year renewal with Xchanging - to provide technical resource to
          BAe Systems throughout the UK
-         Three year framework contract with Network Rail
-         Key contract wins including Aircelle and Spirit Aerospace
-         The PPP administration of Metronet has not impacted the recovery of any debt from this client and the group continues to provide services under the existing long-term framework agreement
-         Acquisitions made in the period to support strategy now successfully integrated and showing benefits
-         Proposed interim dividend of 1.9 pence per share
-         Encouraging market conditions

Gerry Mason, Non-Executive Chairman, said:

"I am pleased to announce a solid start for the six months to 30 June 2007. The Group's recent acquisitions have provided Morson with added diversity and the opportunity to expand our operations into new, niche markets. We continue to have a strong business development pipeline and, coupled with a buoyant trading environment, we look forward to an excellent year for the group."

Financial Highlights

The Group is pleased to report strong net fee income for the first six months of £16.4m, an increase of 29.8 % over the comparison period last year. This has been achieved with underlying turnover up 23.7% to £194.0m. This reflects the impact of continued organic growth and a modest contribution from acquisitions. EBITD (Earnings before Interest Tax and Depreciation, being operating profit of £6.3m add depreciation expense of £0.3m) during the period was £6.6m (a rise of 21.6% on 2006). Operating profit for the period was £6.3m (an increase of 21.4 % on 2006). Profit before taxation was £5.4m (2006 £3.3m).

Net cash outflow from operating activities in the period was £2.5m which is a reflection of the organic growth during the period. net debt in the period has been affected by the recent acquisitions made which resulted in outflows of £5.7m. There has been an increased working capital need of the organic and acquired business amounting to circa £7.0m. This has been provided by the confidential invoice discount facility and has risen broadly as anticipated with the organic growth achieved. At 30 June 2007, the group's debt comprised a confidential invoice discounting facility which stood at £27.1m, a revolving credit facility of £5m and overdraft of £0.5m

The group has adopted IFRS Accounting policies for the first time in the preparation of these interim results and in the restatement of their comparatives.

Dividends

I am very pleased to announce that an Interim dividend of 1.9 pence per share (2006 1.5 pence per share) is proposed to be paid on 19 October 2007 to shareholders on the register on 21 September 2007. the ex-dividend date will be 19 September 2007. This maintains the positive dividend policy of the company reflecting our confidence in the cash generation of the business.

Operating Review

During recent months, we have expanded our activity levels in several emerging sectors but most importantly have secured significant renewals with major existing clients. Within Aerospace, we have secured a five year contract renewal with Xchanging Plc (XPS) for the provision of technical resource to BAe systems throughout the UK with an estimated value of some £275m over the term. Within the rail sector, we have successfully renewed a three year framework contract with network Rail and importantly, this is enhanced by extended categories of resource into which we can provide personnel. Our continued strategy of organic growth with selective acquisitions, whilst ensuring a first class quality service to our customers and personnel, remains fundamental to the continued growth prospects and continuity of the Group's success.

Aerospace and Defence

Performance in this sector has been galvanised with the recent xps renewal but also with several opportunities to expand our footprint across Defence and Commercial Aerospace projects. The division has retained a valuable contract with Rolls Royce Aero-engines, and had several other contract wins, including Aircelle and Spirit Aerospace. We also believe that there will be further significant project demand as Airbus/EADS, Boeing, BAe Systems/Lockheed Martin and Bombardier all seek to launch new aircraft and aerospace products, requiring significant specialist skills and technical engineering support. Furthermore, Morson Projects has recently secured tooling transportation contracts worth over £3m for airbus uk in connection with the A350 aircraft. the prospect of the "CVF" aircraft carrier demand is also approaching after UK Ministry of Defence approvals. Morson have attained 'preferred supplier' status on this project.

Nuclear and Power

As anticipated, activity levels in Nuclear and conventional power are presenting several opportunities with our key customers BNG, Magnox and British Energy; the majority of the work being associated with Asset Maintenance, Decommissioning and new build studies. The Directors believe that Morson's role as a key supplier of specialist personnel required to support, maintain and develop the UK's current nuclear power stations positions it favourably to benefit from the anticipated future high capital spend in this sector. In addition, the board believes that Morson will be able to leverage its position in the sector to create new business opportunities for Morson Projects, the Group's specialist design consultancy, as it aligns itself with the specialised major design contractors to form partnering agreements across the power industries.

Rail and Transport Infrastructure

During the period under review, Morson was successful in securing an enhanced contract with Network Rail which will underpin activity levels in future periods. In addition, the group has been targeting other niche clients and is pleased to announce a recently-secured, new regional supply arrangement with First Engineering. The group remains a key supplier of the specialist skilled personnel required to ensure the continuance of the maintenance and improvement programmes. The directors believe that Morson's expertise in safety and packaged works, together with its in-depth knowledge and safety record within the London Underground Rail environment positions the Group favourably to grow its revenues from its core clients Metronet and Tubelines. The PPP administration of Metronet, as publicly announced by the receivers, has not impacted the recovery of any debt from this client and we continue to provide our services under our existing long-term framework agreement.

The Rail sector is anticipated to continue to experience high levels of activity as a result of central government commitments on expenditure to expand and maintain the essential infrastructure. the directors believe that Morson, through its core clients, is well placed to benefit from such commitments.

Other developing Markets and Acquisitions

Through the acquisition of Bluetec, Morson is now able to provide qualified Telecoms personnel, not only in the UK and Europe, but also in the wider global market. Morson has recently won specialist, overseas framework contracts with Ericsson and Siemens. During this trading period, the recent acquisitions made (see Note 6) have been integrated into the group. the acquired companies have boosted Morson's Oil and Gas operations which are now of a sufficient scale for the Group to introduce our Managing Agent E-commerce concept in this sector both for the UK and overseas. They have also strengthened our core technical UK market position.

We are pleased with the integration of the acquisitions into the Group and are seeing the benefits; for example, increased Net Fee Income relating to permanent fees and management fees in the six months to 30 june 2007 was £1.1m, 2006: £0.5m.

Growth Strategy

The board are pleased that both the Morson International and Morson Projects businesses have performed extremely well.

We continue to have a strong business development bid pipeline and an excellent selection of managed agent and preferred supplier contract opportunities across most sectors. The acquisitions have provided the group with added diversity and the ability to expand our operations into new niche markets.

Trading and Outlook

Our trading environment remains very encouraging. the group has built up strong momentum over the past 18 months and we anticipate being able to announce further progress in respect of a number of new contracts over the next Twelve months. We are confident that we can improve market share and sustain growth through a variety of organic initiatives and will continue to investigate other business opportunities within the skilled technical sector in which our professionals operate.

Following the Group's strong performance in the first half of the year and our recent acquisitions and key client renewals the board is very confident of the prospects for the full year.

For a copy of the Interim Report, please see the Investor Relations page.