Heads of Agreement Signed

PHSC PLC ("the Company")

Heads of Agreement signed for acquisition

PHSC  is  pleased to announce that it has signed Heads of Agreement in respect of the  acquisition  by
PHSC plc of Guardian Water Treatment Limited ("Guardian").

Guardian is an air and water hygiene specialist, was established in 2000 and operates from its base in
Essex.

Air hygiene services include surveys, mechanical cleaning, biocidal disinfection, ductwork and kitchen
extract  cleaning,  and  air quality monitoring. Water hygiene activities  include  a  full  range  of
Legionella risk assessment and controls such as tank disinfection and cleaning, a full range of  water
treatment services, and the supply of associated chemicals.

Turnover  of  Guardian  for the year to 31 March 2007 was £2.1m, which generated  pre-tax  profits  of
£263,000.

Subject  to  agreement of all parties and satisfactory conclusion of due diligence by PHSC, completion
is scheduled for the third quarter of PHSC's accounting period ie the period ending 31 December 2007.

After  a  suitable handover period on terms to be agreed, the present Managing Director, Mark  Hobson,
will  leave  the  company and it is envisaged that Guardian will continue to be run  by  the  existing
senior management team.

The maximum purchase price is £2.15m (including a side agreement for the purchase of freehold property
based  on  current  property  values)  and comprises payment on  completion  of  £900,000,  a  further
unconditional  payment  of £400,000 on the first anniversary of completion, a  bonus  payment  on  the
second  anniversary of completion of £200,000 on the basis that the adjusted earnings before  interest
and  tax (EBIT) for the trading year to 31 March 2009 reaches a minimum of £400,000. This payment will
be adjusted £ for £ on the amount that EBIT is above or below that figure subject to a minimum payment
of  £50,000  and a maximum payment of £400,000. The Company will make a formal commitment to  purchase
the  business  property at fair market value (as advised by an independent valuer)  within  an  agreed
period after completion. This property is currently valued at £450,000.

The  effect of adding Guardian to the PHSC plc group of companies will be to further expand the  range
of  services  offered.  As  there  is very little overlap in terms  of  the  client  base,  there  are
opportunities to cross-sell.

Stephen King, Managing Director of PHSC plc, said of the acquisition:

Guardian represents our largest acquisition to date, and the board sees it a significant moment in the
development  of  the  Group. Results in the year to 31 March 2007 give combined  turnover  and  profit
figures, before tax and exceptional items, of around £6.7m and £900k respectively. With both companies
currently  trading  ahead  of last year's performance, the board is confident  that  this  acquisition
represents extremely good value for our investors. Note that the consideration is planned to be funded
entirely from existing cash and future revenue. With no dilution to existing shareholdings, there will
inevitably be an enhancement to earnings per share.

ENDS

For further information contact:

PHSC plc
Stephen King 01622 717700
[e-mail]
www.phsc.plc.uk

Ruegg & Co Limited
Gavin Burnell / Brett Miller 020 7584 3663
[e-mail]

Hichens, Harrison & Co plc
Daniel Briggs 020 7382 7776

PHSC plc