Final Results

Dillistone Group PLC
11 April 2007



                              Dillistone Group Plc

                  Revenue growth underpinned by record profits


Dillistone Group Plc ('Dillistone' or 'the Company'), the AIM listed supplier of
recruitment software, is pleased to announce its preliminary results for the
year ended 31st December 2006. These are the Group's first full year results
since its successful admission to AIM last June.

Commenting on these results, Jason Starr, Managing Director at Dillistone
commented;

'The year ended 31st December 2006 was another excellent one for the Group.
Globally, revenue grew by 30% to £3,301,362, with profit before tax increasing
by 44% to £923,118.  This, in a 12 month period which also saw the flotation of
the Company, is by far the best result for the Company since its formation.
Furthermore, this headline growth figure is underpinned by record profit
contributions from each of our regional businesses.'

                                                                         2006                      2005

Turnover                                      + 30%                    £3.30m                    £2.53m
Profit before tax                             + 44%                     £923k                     £640k
Profit after tax                              + 45%                     £637k                     £440k
Earnings per share                            + 42%                    12.00p                     8.46p


Contacts:

Jim McLaughlin
Chairman & Finance Director               Dillistone Group Plc               01934 710 509

Barrie Newton                             Blue Oar Securities Plc            01225 424 666

John Wakefield                            Blue Oar Securities Plc            0117 933 0020

Tom Cooper                                Winningtons Financial PR           0797 122 1972



                              DILLISTONE GROUP PLC
                      (formerly Dillistone Group Limited)


                            PRELIMINARY ANNOUNCEMENT


                      FOR THE YEAR ENDED 31 DECEMBER 2006



CHAIRMAN'S STATEMENT


BUSINESS REVIEW


Chairman's Statement

I am pleased to present the first annual report of the company following its
admission to trading on the AIM Market of the London Stock Exchange on 15th June
2006. This report covers the year ended 31st December 2006.


Financial Performance

The financial results for the year ended 31st December 2006 show substantial
growth in both turnover and profits over 2005 despite the distractions caused by
the considerable workload associated with the company's admission to AIM and the
relocation of the London and Sydney offices during the year.

Turnover in the year increased by 30% to £3,301,362 (Year ended 31st December
2005 - £2,530,313), and profits before tax increased by 44% to £923,118 (2005 as
restated - £639,754) despite severe weakening of both the Australian and US
Dollars against the Pound. Sales and profits growth in both the UK and European
markets has been particularly strong, although the UK result is slightly
flattered by the completion of a contract amounting to some £80,000 which
commenced prior to the year end, but was completed in February.

Operating Margins were enhanced from 25% in 2005 to 28% in 2006, reflecting the
strong sales growth together with tight control over operating costs.

Cashflow has continued to reflect the profitable performance of the business,
and at the end of the year we held cash balances of £538,591, compared with
£515,750 at the beginning of the year. The cash balance at 31st December 2006
reflects the non-recurring pre-flotation dividend payment of £400,000 to the
investors who supported the management buy out in January 2003, a further
dividend of £135,000 to all shareholders following the flotation, and the
capital expenditure associated with the relocation of our London headquarters of
some £163,000.  The Group has no borrowings whatsoever.

Earnings per share increased by 42% to 12.00p per share (2005 - 8.46p per
share). At the time of the flotation in June, we indicated that we anticipated
paying an additional dividend of some £100,000 (approximately 1.85 pence per
share) following the publication of the interim results. The board decided that,
in the light of the excellent results in the first half that this dividend
should be increased to £135,000. We indicated at the time of the flotation that
there would be no final divided in respect of 2006, and accordingly none is
proposed. I can however confirm that we expect to pay a dividend in October
2007, following the announcement of the interim results, and a final dividend in
May 2008, based on the year's outcome and a dividend cover of some 2 times
earnings.


Flotation

On 15th June 2006 the company's shares were admitted to trading on the AIM
market of the London Stock Exchange. 200,000 new ordinary shares of 5p each were
issued at a price of £1.25, raising £250,000 for the company. The costs of the
issue amounted to £240,936, leaving the company net proceeds from the issue of
£9,064. I would like to record my thanks to all our staff and professional
advisers in this matter for their commitment to ensuring that the issue and
admission to AIM went as smoothly as it did.


Staff

As part of the flotation process, share options were granted to all our staff
through both EMI approved and unapproved share schemes. I am pleased that we
were able to introduce these schemes on favourable terms for them, and I look
forward to them becoming shareholders in due course. At the end of the year, our
staff held options (for which they will be required to pay 16.154p per share)
over 323,886 ordinary shares in the company. These options will mature in May
2009, and demonstrate the value placed on our staff, who have performed
outstandingly well throughout the year.

I would also like to formally welcome both Alex James and Mike Love to the Board
of the Group. Alex has been with the Group since October 1999, and is the
director responsible for the implementation of new projects. Mike joined the
board on 31st May 2006, as our senior non-executive director. He brings with him
a wealth of relevant experience as Chairman of SciSys plc and ClearStream
Technologies Group plc.  He is also a member of the AIM advisory panel.


Offices

In August 2006 we relocated both our London head office and our Asia-Pacific
offices. The move of the London office, in particular, has enhanced the working
environment.


Prospects

We announced in February 2007 that the order intake in the final quarter of the
year had been the highest ever recorded by the group since its formation, and I
am pleased to be able to confirm that this positive trend has continued. Order
intake in January and February 2007 is some 32% ahead of the same period in
2006. The short lead time between taking an order and completing the
installation, however, means that predicting the outcome for the year as a whole
at this early stage is as difficult as ever.

In March 2007, we released version 8 of our 'Filefinder' software. This is the
first major release for 2 years, and has entailed not only significant
development expenditure, but also a major effort to train our own staff for
support and installation, particularly towards the latter part of 2006. Early
reactions to the new software from our clients have been extremely encouraging,
and I expect that reaction to reflect in sales performance during the year.

The outlook for the retained executive search market remains positive throughout
the world, and the Board believes that the outcome for the year as a whole will
be very satisfactory.

Looking beyond 2006, the trend for the adoption of our 'Filefinder' software by
large corporate clients gives comfort that the group will continue to deliver
further growth.


Jim McLaughlin
11th April, 2007



MANAGING DIRECTOR'S REVIEW
FOR THE YEAR ENDED 31 DECEMBER 2006


Overview

The year ended 31st December 2006 was another excellent one for the Group.
Globally, revenue grew by 30% to £3,301,362, with profit before tax increasing
by 44% to £923,118.  This, in a 12 month period which also saw the flotation of
the Company, is by far the best result for the Company since its formation.
Furthermore, this headline growth figure is underpinned by record profit
contributions from each of our regional businesses.

Our performance in our core 'executive search' market has been good, with a
total of 112 new sales to executive search firms, spread across 31 countries.
Although independent market share data is hard to obtain in this sector, the
management believe that the Group remains in the global market leadership
position in what is a rapidly expanding niche.

In addition, our strategy of expanding beyond our core 'executive search' market
has shown early signs of success with sales to corporate organisations ranging
from financial services groups to software houses and media organisations and we
are pleased to list a number of Fortune 100 Organisations as clients.

Our performance in 2006 was the result of the skills and efforts of our superb
team of staff.  This means that our ability to recruit, retain and motivate our
staff is key.  To that end, we have - over the course of 2006 - relocated or
upgraded a number of our offices and introduced, as part of the flotation
process share option schemes.  We continue to follow a policy of promoting from
within when possible and, as a result of this, our executive management team now
have an average of 7 1/2 years of experience within the company.


Regional Review and Key Performance Indicators


United Kingdom

Our home market saw excellent growth with revenue up 44% on the preceding year
and with operating profits rising by 55%.  This excellent return reflects both
high levels of sales to new clients, and our ability to provide ongoing services
to our existing clients.  This performance was achieved despite the relocation
of our head office, which took place in August of 2006, at a total cost of
£163,000, funded from our earnings in the year.


Europe

Our European business also performed well, with operating profits up 41% based
on a revenue increase of 23%.  This was in part a reflection of the improved
economic environment in the region but also reflected the growth of our market
eastward - we made a number of sales into the countries in the east of the
continent.  Furthermore, our training and conference services were particularly
well attended by delegates from these markets.  I believe that emerging markets
will prove to be a major driver of our European growth, and our early leadership
in countries such as Bulgaria, Russia and Turkey positions us strongly for the
long term.


Asia Pacific

Our Asia Pacific business, based in Sydney, produced a pleasing 33% increase in
profit, up from £131,982 to £175,800.  This was achieved despite a slight drop
in revenues, caused by a number of operational issues which have now been
resolved.  The business achieved a good order intake towards the end of 2006,
and therefore carries a significant order pipeline for the first quarter of
2007.  Over the last 3 years, revenues and profitability in our Asia Pacific
business have grown by 103%, and a significant investment is scheduled for 2007
to ensure that Asia-Pacific continues to play a significant role in our drive
for growth going forward.


Americas

Our US business performed well with a 30% increase in sales, despite the severe
weakening of the US Dollar against the Pound. After eliminating the effect of
the changes in translation rates, US sales grew by 34% on a like-for-like basis.
  This growth rate is particularly pleasing when considered against a backdrop
of an increasingly price sensitive market and has been achieved in part by good
performance in the corporate sector.  Despite this sales growth, our profit grew
only by 21%, reflecting investments in both marketing and personnel made during
the year.  These investments ensure that we are in a position to take advantage
of expected revenue growth in 2007 and beyond.


Customer Service

A key part of our business strategy is to provide excellent customer service.
This ensures that we maximise our recurring revenues whilst also ensuring that
our sales teams are able to clearly differentiate ourselves from our
competitors.  This is achieved in a number of ways and 2006 saw us implement a
number of new strategies designed to develop our customer service offering still
further.  These include a range of complementary online training courses for key
users, the scheduling of a series of 'user events' in key markets around the
world and the implementation of a new call logging system.  To the best of our
knowledge, none of our direct competitors provide this level of ongoing service
to their clients.

Partly as a result of this, our recurring to non-recurring revenue ratio
remained constant at 61:39, despite a substantial increase in new business
sales.  Furthermore, our reputation for customer service also plays a key role
in our new business development strategy, and in 2006 around half of our clients
came about as a result of a recommendation from a satisfied client or former
user.

The consistency and predictability of our recurring revenue stream enables the
Group to plan its future with some degree of certainty, and invest heavily in
product development, to the benefit of both itself and its extensive user base.


Product Development

During the course of 2006, our R+D team were focussed on the development of our
latest Filefinder suite of software - Filefinder 8.  This product, released on
March 1st 2007, will strengthen our position in the market still further, and
early signs are that the product has been very well received.


Principal Risks and Uncertainties

The management of the business and the execution of the Group's strategy are
subject to a number of risks.

Risks are reviewed by the board and appropriate processes are in place to
monitor them, and if necessary mitigate their effects. The principal risks which
the Group recognises are as follows:


Competition

The Group operates in a competitive market, which may exert downward pressure on
prices and margins. In order to mitigate this risk, our sales teams monitor the
prices and products available from our competitors, and respond as appropriate,
taking into account the technical differences as well as prices and payment
terms between the competitors' products and our own.


Employees

The Group's performance depends on the performance of its staff. The resignation
of key individuals and the inability to recruit replacements could adversely
impact the Group's results. To mitigate the likelihood of this occurring, the
Group has implemented a share option scheme, with key staff carefully targeted
so as to retain their services, and it also ensures that proper training is
provided to all members of staff, depending on their needs.


Currency Risk

Operating in a global economy, with offices in the UK, Europe, Australia and the
US inevitably exposes the Group to currency fluctuations, both through the
translation of earnings, and by holding assets in foreign currencies. The Group
seeks to minimise the currency risks associated in its business, by trading
wherever possible in Sterling, and by minimising the value of assets held
overseas.


Jason Starr
11th April 2007



CONSOLIDATED INCOME STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2006

                                                                                              As restated
                                                                            2006                     2005
                                                                               £                        £
Continuing activities

Revenue                                                                3,301,362                2,530,313

Cost of sales                                                          (274,481)                (271,171)

Gross profit                                                           3,026,881                2,259,142


Administrative expenses                                              (2,107,724)              (1,622,087)

Results from operating activities                                        919,157                  637,055

Financial income                                                           3,961                    2,699

Profit before tax                                                        923,118                  639,754


Tax expense                                                            (285,913)                (199,776)

Profit for the year attributable to
equity holders of the company                                            637,205                  439,978


Earnings per share -
from continuing activities

Basic                                                                     12.00p                    8.46p
Diluted                                                                   11.63p                    8.46p



CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2006


                                  Share         Share      Retained      Share       Foreign         Total
                                capital       premium      earnings     option      exchange
                                      £             £             £          £             £             £
Balance at
31 December 2004                105,000       106,237       354,760          -       (5,562)       560,435

Profit for the year ended
31 December 2005                      -             -       439,978          -             -       439,978

Exchange differences
on translation of
overseas operations                   -             -             -          -        20,384        20,384

Dividends paid                        -             -     (367,500)          -             -     (367,500)

Balance at
31 December 2005                105,000       106,237       427,238          -        14,822       653,297

Profit for the year ended
31 December 2006                      -             -       637,205          -             -       637,205

Bonus issue from
reserves                        155,000     (106,237)      (48,763)          -             -             -

Issue of share capital           10,000       240,000             -          -             -       250,000

Costs of the issue                    -     (240,000)         (936)          -             -     (240,936)

Fair value of equity
settled share option
expense                               -             -             -     13,316             -        13,316

Exchange differences
on translation of
overseas operations                   -             -             -          -      (21,002)      (21,002)

Dividends paid                        -             -     (535,096)          -             -     (535,096)

Balance at
31 December 2006                270,000             -       479,648     13,316       (6,180)       756,784



CONSOLIDATED CASH FLOW STATEMENT
AS AT 31 DECEMBER 2006

                                                                                               As restated
                                                        2006                    2006                  2005
                                                           £                       £                     £
Operating activities

Profit for the year / period                         637,205                                       439,978
Adjustment for
  Depreciation and amortisation                       94,374                                        75,744
  Share option expense                                13,316                                             -
  Loss / (profit) on disposal                          1,117                                             -

Operating cash flows before
movements in working capital                         746,012                                       515,722

Decrease / (increase) in
receivables                                        (122,501)                                      (63,254)
(Increase) in inventories                             11,204                                       (3,230)
Increase in payables                                 199,081                                       374,550

Net cash generated from
operating activities                                                         833,796               823,788

Investing activities

Purchase of property plant and
equipment                                          (190,033)                                      (21,762)
Investment in development costs                     (73,888)                                      (63,285)
                                                                           (263,921)              (85,047)

Financing activities

Proceeds from issue of
share capital                                        250,000                                             -
Share capital issue costs                          (240,936)                                             -
Dividends paid                                     (535,096)                                     (367,500)

Net cash provided by
financing activities                                                       (526,032)             (367,500)

Net increase in cash and
cash equivalents                                                              43,843               371,241

Cash and cash equivalents at
Beginning of year / period                                                   515,750               124,125

Effect of foreign exchange rate
changes                                                                     (21,002)                20,384

Cash and cash equivalents at
end of year / period                                                         538,591               515,750



CONSOLIDATED BALANCE SHEET
FOR THE YEAR ENDED 31 DECEMBER 2006

                                                                                    Group
                                                                                             As restated
                                                                            2006                    2005
                                                                               £                       £
ASSETS

Non-current assets
  Intangible assets                                                      630,271                 616,078
  Property plant and equipment                                           181,476                  25,995
  Investments                                                                  -                       -
  Deferred tax asset                                                           -                   3,055
                                                                         811,747                 645,128

Current assets
  Inventories                                                             21,210                  32,414
  Trade and other receivables                                            827,633                 705,132
  Cash and cash equivalents                                              538,591                 515,750

                                                                       1,387,434               1,253,296

Total assets                                                           2,199,181               1,898,424


EQUITY AND LIABILITIES

Equity
Share capital                                                            270,000                 105,000
Share premium                                                                  -                 106,237
Retained earnings                                                        479,648                 427,238
Share option reserve                                                      13,316                       -
Translation reserve                                                      (6,180)                  14,822

Total equity                                                             756,784                 653,297

Liabilities

Non current liabilities
  Deferred tax liability                                                   8,603                       -
Current liabilities
  Trade and other payables                                             1,205,219               1,015,142
Current tax payable                                                      228,575                 229,985

Total liabilities                                                      1,442,397               1,245,127

Total liabilities and equity                                           2,199,181               1,898,424






NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2006

     
1.   Basis of Accounting

The 2006 financial statements will disclose the following changes to the Group's
accounting policies as a result of the adoption of International Financial
Reporting Standards (IFRS):
     
(i)  Under IFRS goodwill is stated at cost and subjected to annual impairment 
     reviews.  In previously reported financial statements, goodwill was written 
     off over its estimated useful economic life.  The effect of restating and 
     not amortising goodwill is to increase the profit for the year by £24,720.

(ii) Under IFRS development costs that meet certain criteria must be capitalised 
     and amortised over their estimated useful economic life, whereas in 
     previously reported financial statements the group took the option not to
     capitalise such costs.  The effect of capitalising and amortising 
     development costs is to increase the profit for the year by £14,193.

     
2.   Segment reporting


Geographical segments

The following tables provide an analysis of the Group's revenue.


                                                                          2006                       2005
                                                                             £                          £

UK                                                                   1,747,803                  1,213,607
Europe                                                                 640,483                    520,377
USA                                                                    598,807                    460,499
Asia-Pacific                                                           314,269                    321,018
Africa                                                                       -                     14,812

                                                                     3,301,362                  2,530,313



Business segment

The following table provides an analysis of the Group's revenue by business
segment

                                                                          2006                       2005
                                                                             £                          £

Recurring income                                                     1,287,531                    977,713
Non-recurring income                                                 2,013,831                  1,552,600
                                                                     3,301,362                  2,530,313


Recurring income includes all support services, and web hosting income.
Non-recurring income includes sales of new licenses, and income derived from
installing those licenses including training, installation, and data
translation.

     
3.   Earnings per share


Basic earnings per share

                                                                          2006                       2005
                                                                             £                          £

Profit attributable to ordinary shareholders                           637,205                    439,978

Weighted average number of shares                                    5,309,890                  5,200,000

Basic earnings per share                                                12.00p                      8.46p

Weighted average number of shares
after diluted shares                                                 5,481,201                  5,200,000

Diluted earnings per share                                              11.63p                      8.46p


4.   Copies of accounts

The annual report will be sent to shareholders in due course.  Copies of this
announcement and the full statutory accounts can be obtained, when available,
free of charge, from the Company's registered office at Third Floor, 50-52 Paul
Street, London EC2A 4LB or on the Company's website:  www.dillistone.com



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