Final Results

Dillistone Group PLC
16 April 2008


                                                                 16th April 2008


                              DILLISTONE GROUP PLC

                            PRELIMINARY ANNOUNCEMENT
                      FOR THE YEAR ENDED 31 DECEMBER 2007


Dillistone Group Plc ('Dillistone' or 'the Group'), the AIM listed supplier of
Recruitment Software, is pleased to announce its preliminary results for the
year ended 31st December 2007.


Highlights for the period:
                                       2007      2006

   •Revenue                    +23%   £4.07m    £3.30m
   •Profit before tax          +30%   £1.20m    £923k
   •Profit after tax           +26%   £804k     £637k
   •Earnings per share (basic) +24%   14.9p     12.0p
   •Cash at Bank               +185%  £1.534m   £539k
   •Operating Margin           +4%    29%       28%
   •Recurring revenues increased by 29% to £1.67m, 
    representing 41% of total turnover
   •Proposed final dividend of 6p per share recommended, 
    making total dividend for year of 8.5p
   •Clients in over 50 countries world wide


Commenting on the results, Jason Starr, Managing Director said:

'We are very pleased with the continued global growth of Dillistone in 2007.
Particularly significant is that 7 out of our 25 largest implementations within
the period were into the world's 'emerging markets' and that many major
contracts were won where clients moved over to Dillistone from direct
competitors. This is an endorsement of our position as the market leader in the
global Recruitment Software industry.

'Revenue growth has been complemented by an enhanced operating margin and strong
profits, demonstrating a robust performance across the business. The Group has
been very cash generative and gives us a strong platform to continue to develop
in 2008 despite the economic uncertainty seen recently in world markets.'



Contacts:

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

John Wakefield - Blue Oar Securities               0117 933 0020

Tom Cooper - Winningtons                           0797 122 1972



CHAIRMAN'S STATEMENT

I am pleased to present the annual report of the company for the year ended 31
December 2007.

Financial Performance

The momentum we enjoyed in the year ended December 2006 flowed through into the
year covered by this report, with record profits and turnover for the Group as a
whole. We benefited from the considerable investment in the development of a new
version of our FILEFINDER product which was launched in March 2007, winning some
significant orders from new and existing clients. The financial results for the
year ended 31 December 2007 show substantial growth in both turnover and profits
over 2006.

Revenue in the year increased by 23% to £4,066,463 (2006 - £3,301,362), and
profits before tax increased by 30% to £1,196,213 (2006 - £923,118) despite
severe weakening of both the Australian and US Dollars against the pound, which
together accounted for approximately 26% sales. Sales and profits growth in both
the UK and European markets have been particularly strong. The USA saw the
effects of a weakening dollar impact on the results, together with a slowdown in
overall business activity. In late 2006 we decided to offer our product on a
'Software as a Service' basis in the US market and, whilst this has a negative
impact on both revenue and results in the short term, it has improved the
proportion and value of the revenue earned on a recurring basis, which will have
a positive long term impact on quality of earnings.

Recurring revenues (mainly arising from support agreements) increased by 29% in
the year, from £1.288m to £1.666m, whilst non recurring revenues (mainly from
new license sales) increased by 19% from £2.014m to £2.401m. Recurring revenues
now comprise 41% of Group turnover (2006- 39%) and help to provide a cushion
against any slowdown, which may arise in new business as a result of a slowdown
in overall economic activities.

Operating margins were enhanced from 28% in 2006 to 29% in 2007, 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 £1,533,649, compared with
£538,591 at the beginning of the year. The cash balance at 31 December 2007
reflects the payment of an interim dividend of £135,000, and capital expenditure
of some £110,741. The Group has no borrowings whatsoever.

Earnings per share increased by 24% to 14.90p per share (2006 -12.0p per share).
We paid an interim dividend of 2.5p per share in October 2007, and the board has
recommended that a final dividend of 6p per share should be paid, subject to
shareholder approval, on 23 May 2008 to holders on the register on 25 April.
Shares will trade Ex-Dividend from 23 April 2008. The total dividend for the
year will be 1.75 times covered by earnings, a little less than envisaged at the
time of the flotation, but covered some 2.34 times by the cash generation of the
business.


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, which is
particularly important in a services business and I look forward to welcoming
them as shareholders in due course. During the year we granted additional
options to a small number of employees, and at the end of the year, our staff
held options over 347,934 ordinary shares in the company, representing 6% of the
current issued share capital after exercise of the options. These options will
mature from May 2009, and demonstrate the value placed on our staff, who have
performed outstandingly well throughout the year.


Prospects

We announced in February 2008 that the order intake in the final quarter of 2007
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 for the year as a whole was some 31% ahead of the previous year, and at
the year end we held the highest value of confirmed orders we have ever
experienced. This has led to a very good start to the current year. However, the
effects of the global credit squeeze appear to have made larger clients
currently more apprehensive about committing themselves to ordering new systems,
certainly in the short term, and the outlook for the longer term in the
financial recruitment markets is less visible at the present time.

Our strong balance sheet and substantial cash reserves at the year end, together
with the increasing value of recurring revenue contracts means that the Group is
relatively well protected against any short term slowdown in economic activity.
The excellent start we have enjoyed in the first part of 2008 also assists in
this regard, and the Board believes that the Group is well positioned for
another successful year.

Jim McLaughlin
15 April, 2008



MANAGING DIRECTOR'S REPORT

2007 was another excellent year with significant improvements in revenues,
profits and earnings.

Sales growth was achieved in both recurring and non recurring revenues. The 29%
increase in recurring revenues was delivered as a result of both strong support
sales and an increasing number of new system sales, delivered on a 'Software as
a Service' basis.

The period saw us win 153 new business contracts which were implemented in 37
countries. Our global spread is particularly pleasing - we now have clients in
over 50 countries - with our largest ten implementations in 2007 featuring
clients in UK, USA, Denmark, India, Asia Pacific and Russia along with a
pan-EMEA business.

The emerging markets proved to be particularly important to us, with 7 of our 25
largest implementations coming from the Middle East, Asia, Eastern Europe and
Central and Southern America. These contract wins are particularly significant
as they often confer on us 'market leadership' status in these regions. As these
markets continue to grow, we should enjoy continued success as a result of these
early wins.

Also pleasing was the fact that 2007 saw us attract a record number of clients
from direct competitors. We believe that this is partly down to our ongoing
product development, but also down to a desire amongst the leading search firms
to invest in systems from a global leader. The corporate sector continues to be
a small but growing niche for us, with a further Fortune 100 company introducing
our system in 2007 for its internal talent acquisition.


DIVISIONAL REVIEW

UK, Middle East and India

Our home region once again generated excellent results, with a 52.22% increase
in profit. It should be noted, however, that a number of the larger clients
invoiced from the UK - particular Spengler Fox - featured significant
international work. The results of these contracts therefore fall within the
accounts of our UK subsidiary, even though the profits were actually earned
overseas. In addition to Spengler Fox, significant contract wins in the UK also
included Hays Executive - the Executive Search division of the UK's largest
Recruitment firm - and Norman Broadbent. Each of these firms switched to
FILEFINDER from a direct competitor.


Europe

Our European business also performed to an exceptional level, with year on year
profits up 32%. European executive search firms are often smaller than their
counterparts in the UK and US, and so this performance reflects volume of new
business wins rather than scale. Our performance in Russia and Eastern Europe
was particularly pleasing, with a number of significant contract wins.


Asia Pacific

Our Australia and Asia pacific business unit again performed very well, with
year on year results up 46.8%. Strategically important contract wins in the
region included The Wright Company and Jo Fisher Executive Search. The region
also benefited from a major marketing push in November, when a conference
organised by the Group in Hong Kong attracted over 200 delegates from 19
countries to discuss Executive Talent Acquisition in Asia. The event proved
significant, and provided us with an opportunity for exclusive exposure to our
FILEFINDER product to leading firms in the region whilst also contributing a
small profit.


United States

Whilst the headline performance of our US business unit was disappointing, this
does not reflect fully the actual achievements of the business. Profits fell by
9.3% based on sales which increased by 6%, but in practice, whilst realised
revenues were relatively flat, incoming orders grew significantly. Our decision
to offer FILEFINDER on a 'software as a service' model in the US (where clients
rent the software rather than purchase it) caused us some short term pain but
means that 57% of revenues should recur in 2008. In 2007, the percentage was
just 29%. Clearly, this decision should go a long way towards mitigating the
effects of the economic downturn in the region. A number of major wins in the
region are subject to non-disclosure agreements, but include a Fortune 100
company and a number of search firms - including one internationally known -
which are switching to FILEFINDER from US based competitors.


PRODUCT STRATEGY

2007 was a major year in the development of FILEFINDER. In March, we launched
FILEFINDER 8. FILEFINDER 8 is the latest iteration of our main product and
features both a new interface and extensive new functionality. This was followed
in September by the launch of a new release of our 'FFImport' module. The new
FFImport, compared to its predecessor, features significant additional
functionality for our clients and a lower cost of implementation for us. As the
year closed, our next generation tool for handheld devices, FFMobile, was in the
final stages of beta testing and was released in January 2008. FFMobile is
provided as an add-on to our core FILEFINDER platform.

We believe that FILEFINDER is used by more Executive Search firms than any other
product, and are committed to a development path that will maintain that
position.

Beyond FILEFINDER, we continue to develop a number of additional products and
services which are designed to both increase brand awareness of our organisation
whilst also providing additional revenue streams. In 2007 we ran conferences in
London and Hong Kong and provided 'executive search training skills' courses in
a number of countries. Between the training we provide in FILEFINDER and our
more generic courses in executive search skills, we believe we probably provide
third party training to more retained executive search professionals than any
other organization. 2008 will see us extend our conference and training
portfolio with events in New York, Frankfurt and London and the launch of online
webinar training.


PEOPLE

Our performance in 2007 reflects the fact that our group companies are made up
of an exceptional team of people. I'd like to take this opportunity to thank
them for all of their efforts during the year. For the business to continue to
perform it is important that we retain and develop our staff and, to that end,
we issued new options over 30,000 shares to new members of staff and existing
option holders whose responsibilities within the business had increased since
they were awarded their original options before the flotation. We are confident
that if we can continue to retain our key staff, then our business will continue
to perform better than others in our sector.


CORPORATE DEVELOPMENT

The board is acutely aware that the Group's future success is dependent on our
ability to continue to meet the needs of the executive recruitment sector. As
such, it continues to actively consider ways in which this may be done - through
either the development of existing products or the creation of new ones. We have
a strong balance sheet and high cash reserves with which to pursue these goals
and we continue to consider opportunities to take advantage of these assets in a
way which would enhance the overall group position, its earnings and overall
profitability.

Jason Starr
15 April 2008





CONSOLIDATED INCOME STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2007

                                                        2007              2006
                                                           £                 £

Revenue                                            4,066,463         3,301,362

Cost of sales                                       (236,951)         (274,481)
                                                 -----------       -----------

Gross profit                                       3,829,512         3,026,881

Administrative expenses                           (2,659,390)       (2,107,724)
                                                 -----------       -----------

Results from operating activities                  1,170,122           919,157

Financial income                                      26,091             3,961
                                                 -----------       -----------

Profit before tax                                  1,196,213           923,118

Tax expense                                         (391,838)         (285,913)
                                                 -----------       -----------

Profit for the year                                  804,375           637,205
                                                 ===========       ===========

Earnings per share -

from continuing activities

Basic                                                  14.90p            12.00p
Diluted                                                14.05p            11.63p





CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2007

                Share       Share    Retained     Share    Foreign       Total
              capital     premium    earnings    option   exchange
                    £           £           £         £          £           £
Balance at
31 December   105,000     106,237     427,238         -     14,822     653,297
2005

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

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

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

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

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

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

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

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

Profit for
the year            -           -     804,375         -          -     804,375
ended
31 December
2007

Fair value
of equity           -           -           -    13,462          -      13,462
settled
share option
expense

Exchange
differences         -           -           -         -     23,916      23,916
on
translation
of overseas
operations

Dividends           -           -    (135,000)        -          -    (135,000)
paid          
              -------     -------     -------    ------    -------     -------

Balance at
31 December
2007          270,000           -   1,149,023    26,778     17,736   1,463,537
              =======     =======     =======    ======    =======     =======





CONSOLIDATED BALANCE SHEET
AS AT 31 DECEMBER 2007
                                                          Group
                                             2007                         2006
                                                £                            £
ASSETS

Non-current assets
Intangible assets                         639,835                      630,271
Property plant and equipment              155,390                      181,476
Investments                                     -                            -
                                      -----------                  -----------
                                          795,225                      811,747

Current assets
Inventories                                 2,334                       21,210
Trade and other receivables             1,284,190                      827,633
Cash and cash equivalents               1,533,649                      538,591
                                      -----------                  -----------
                                        2,820,173                    1,387,434
                                      -----------                  -----------
Total assets                            3,615,398                    2,199,181
                                      ===========                  ===========

EQUITY AND LIABILITIES

Equity
Share capital                             270,000                      270,000
Retained earnings                       1,149,023                      479,648
Share option reserve                       26,778                       13,316
Translation reserve                        17,736                       (6,180)
                                      -----------                  -----------

Total equity                            1,463,537                      756,784

Liabilities

Non current liabilities
Deferred tax liability                      3,000                        8,603
Current liabilities
Trade and other payables                1,848,038                    1,205,219
Current tax payable                       300,823                      228,575
                                      -----------                  -----------

Total liabilities                       2,151,861                    1,442,397
                                      -----------                  -----------

Total liabilities and equity            3,615,398                    2,199,181
                                      ===========                  ===========





CONSOLIDATED CASH FLOW STATEMENT
AS AT 31 DECEMBER 2007

                                     2007         2007        2006        2006
                                        £            £           £           £
Operating activities

Profit from operations          1,170,122                  919,157
Less taxation paid               (319,590)                (287,323)
Adjustment for
Depreciation and amortisation     126,606                   94,582
Share option expense               13,462                   13,316
Loss on disposal                      657                    1,117
                               ----------                ---------

Operating cash flows before
movement in working capital       991,257                  740,849

(Increase) in receivables        (456,557)                (122,501)
Decrease in inventories            18,876                   11,204
Increase in payables              637,216                  201,735
                               ----------                ---------

Net cash generated from                      1,190,792                 831,287
operating
activities

Investing activities

Interest received                  26,091                    3,961
Purchase of property plant and
equipment                         (35,653)                (191,485)
Investment in development         (75,088)                 (73,888)
costs                          ----------                ---------

Net cash used in investing                     (84,650)               (261,412)
activities

Financing activities
Proceeds from issue of share            -                  250,000
capital
Share capital issue costs               -                 (240,936)
Dividends paid                   (135,000)                (535,096)
                               ----------                ---------

Net cash used by financing                    (135,000)               (526,032)
activities                                   ---------               ---------

Net increase in cash and cash                  971,142                  43,843
equivalents

Cash and cash equivalents at                   538,591                 515,750
beginning of year

Effect of foreign exchange                      23,916                 (21,002)
rate                                         ---------               ---------
changes

Cash and cash equivalents at                 1,533,649                 538,591
end of
year                                         =========               =========





NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2007


1. Basis of Accounting

The above financial information does not constitute statutory accounts as defined 
in section 240 of the Companies Act 1985. The above figures for the year ended 
31 December 2007 are an abridged version of the company's accounts which will be 
reported on by the auditors, despatched to the shareholders and filed with the 
Registrar of Companies shortly.

The audited accounts for the year ended 31 December 2006 have been delivered to 
the Registrar of Companies and the report of the auditors was unqualified and 
did not contain statements under Section 237(2) or (3) Companies Act 1985.

The financial information in this announcement has been prepared on the basis of 
the accounting policies set out in the interim financial statements for the 6 
months ended 30 June 2007.

The announcement was approved by the board of directors on 15 April 2008.



2. Segment reporting

Geographical segments

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

                                               2007                       2006
                                                  £                          £

UK                                        2,180,172                  1,747,803
Europe                                      845,745                    640,483
USA                                         633,597                    598,807
Asia-Pacific                                406,949                    314,269
                                        -----------                -----------
                                          4,066,463                  3,301,362
                                        -----------                -----------



Business segment

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

                                                   2007                   2006
                                                      £                      £

Recurring income                              1,665,870              1,287,531
Non-recurring income                          2,400,593              2,013,831
                                            -----------            -----------
                                              4,066,463              3,301,362
                                            -----------            -----------



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

                                                          2007           2006

Profit attributable to ordinary shareholders          £804,375       £637,205

Weighted average number of shares                    5,400,000      5,309,890

Basic earnings per share                                 14.90p         12.00p
                                                   ===========    ===========

Weighted average number of shares
after dilution                                       5,726,811      5,481,201

Fully diluted earnings per share                         14.05p         11.63p
                                                   ===========    ===========



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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