Preliminary Results

PHSC PLC                            Preliminary Results 2006/07

MANAGING DIRECTOR'S STATEMENT

for the year ended 31 March 2007

Highlights:

-      Pre-tax profits (net of goodwill) up from £411,000 to £634,000
-      Earnings per share rise from 2.6p to 3.67p
-      Group revenues increased to £4.65m from £3.70m
-      Proposed dividend raised to 0.80p per Ordinary Share (2006: 0.75p)
-      One subsidiary acquired and another disposed of in the period

I  report on a very encouraging financial performance of the company over the year, and comment on some of  the
activities that have taken place during that period and prospects for the future.

In  January 2007 we disposed of our Health and Safety Click Limited subsidiary for reasons outlined later on in
this  statement.  This  resulted in an (exceptional) charge of £34,000. Shortly thereafter  we  acquired  Envex
Company Limited. Reference to the acquisition and disposal is made later in this statement.

This  leaves  the Group with four trading subsidiaries, through which we offer a wide range of consultancy  and
advisory services. Geographically our offices are based in Kent, Essex, Northamptonshire and Berkshire.

We  purchased additional premises for Adamson's Laboratory Service Limited (ALS) at Raunds in Northamptonshire,
adjacent  to the existing offices leased by RSA Environmental Health Limited (RSA). The new premises have  been
refurbished and laboratory facilities have been installed. This leaves ALS well placed to expand its activities
from the company's traditional south-east catchment area into the Midlands and beyond.

During  the  year,  ALS  were  pleased  to  announce a contract that included  work  to  an  initial  value  of
approximately £375,000, rising to a potential total fee income exceeding £750,000, over a three-year period  at
the  Shell  Centre in London. Separately, ALS was awarded a contract valued at £105,000 to carry  out  asbestos
surveying at a top London hotel.

RSA continued to win work from local authorities, with notable works including a contract valued at £32,000 for
London  Borough of Tower Hamlets. London Borough of Bromley has commissioned the company to carry out a  survey
related  to the delivery, provision, preparation and consumption of school meals in a project worth £67,800  in
revenues.

Our  subsidiary  Personnel Health & Safety Consultants Ltd was commissioned to undertake an auditing  programme
across Newsquest Media Group's print sites and offices, worth approximately £70,000 over a 12-month period.

Further  information on the activities of each operating subsidiary will be contained within the Annual  Report
and  Accounts to be sent to shareholders in due course and which will be available during normal working  hours
from  the  offices  of  Ruegg  & Co Limited, 39 Cheval Place, London SW7 1EW. This  information  will  also  be
accessible on our corporate website at www.phsc.plc.uk

Acquisition and Disposal
The Group acquired Envex Company Limited (Envex) in January 2007 for an initial consideration of £35,000. There
will  be  further  payments of up to £37,000 on each of the first and second anniversaries  funded  by  profits
generated in those periods. In the year before acquisition, Envex had revenues of £238,000 and a pre-tax profit
of  £7,150.  Envex provides general health and safety consultancy and training service to clients in  Berkshire
and  the surrounding areas. In addition, it delivers the Management of Risk and Uncertainty training course for
the Institute of Risk Management.

In January 2007 we disposed of Health and Safety Click Limited (HSCL). Originally acquired in August 2005, that
company  is  now  in the hands of its Managing Director.  As explained in last year's annual report,  acquiring
HSCL  was a speculative venture for PHSC plc in an area of business where the Group had no representation. HSCL
delivers  a  low  cost health and safety protection and advisory service via a web-based system.  Although  the
concept  remained an attractive one, the Board took the view that shareholders' best interests would be  served
by  concentrating our energies on companies that were more established and cash generative. The  terms  of  the
disposal  provide that PHSC plc will be entitled to 33% of any profits that are generated by HSCL in  the  next
twelve  months, and 25% of any profits in the twelve months thereafter. HSCL made a trading loss of £30,000  in
the nine months prior to disposal.

PHSC  plc is currently involved in discussions with two companies that would be attractive acquisition targets,
and will report on progress in due course.

Institutional Investment
Following  the  appointment of Hichens, Harrison & Co. plc as brokers to the Group in January 2007,  we  placed
1,886,792  new  ordinary shares at 53p per share with institutional investors. This raised £1,000,000  for  the
Company  before  expenses.  We  are pleased to welcome, in particular, financial investment  from  Unicorn  and
Framlington as this will assist in improving the profile of PHSC plc within the investor community. Between the
dates  of  the new issue and the publication of this statement, the mid-price of our ordinary shares has  risen
from 52.5p to 54.5p per share.

Corporate Governance
In  addition  to  myself, Nicola Coote is an executive director. There are two non-executive directors  on  the
Board: Mike Miller, who chairs the Audit Committee, and Graham Webb MBE who chairs the Remuneration Committee.

A  Chartered  Secretary,  Lorraine  Young, supports the Board and its committees.  The  corporate  resource  is
strengthened by the presence of our Group Accountant, Candy Wilton.

Performance by Trading Subsidiaries
Profit  figures  below are stated before tax and management charges. Note that some general health  and  safety
training and consultancy assignments carried out by particular trading subsidiaries will have been invoiced  by
other  Group  companies  as  in  previous years, thus it is difficult to make direct  performance  comparisons.
Reference should be made to the Group's overall performance.

Personnel Health and Safety Consultants Limited
Sales of £1.12 million, yielding a profit of £528,000.

In the previous year there were sales of £1.22 million and a profit of £337,000.

RSA Environmental Health Limited
Sales of £966,000, yielding a profit of £68,000.

In the previous year there were sales of £788,000 and a profit of £110,000.

Adamson's Laboratory Services Limited
Sales of £2.44m, yielding a profit of £542,000 including a Work in Progress uplift of £45,000.

Sales for the 9½ months post-acquisition (17.6.05 - 31.03.06) were £1.6 million, yielding a profit of £283,000.

Health & Safety Click Limited
Invoiced sales prior to disposal of £60,000 leading to a loss of £24,000.

For the period 17.8.05 to 31.03.06 there were sales of £86,000, resulting in a pre-tax loss of £26,000.

Envex Company Limited
Invoiced sales since acquisition on 09.01.07 were £55,000, resulting in a profit of £3,000.

Dividend
The  Board  is  proposing  a final dividend of 0.80p per ordinary share to be paid  on  21  September  2007  to
shareholders on the register as at 24 August 2007.

Prospects
The  Board  continues  to  believe  that  there  are good trading  prospects  within  the  health,  safety  and
environmental  consultancy marketplace and we look forward to another successful and profitable year.  We  will
endeavour  to  make  at  least one major acquisition during the period, ensuring that  any  new  subsidiary  is
earnings-enhancing.

Trading in the first two months of 2007/08 generated Group revenues of £725,000 (2006/07: £698,000).

AGM
The  Annual  General Meeting will be held on 13 September 2007 at The Old Church, 31 Rochester Road, Aylesford,
Kent ME20 7PR at 10:00am.

Stephen King, Managing Director
Group profit and loss account                                                                               
for the year ended 31st March 2007                                                     2007             2006
                                                                                      £'000            £'000
Turnover                                                                                          
Continuing operations - existing                                                      4,534            2,012
Continuing operations - acquired                                                         55            1,692
Discontinued operations                                                                  60                -
                                                                                      4,649            3,704

Cost of sales                                                                                     
Continuing operations - existing                                                      2,274            1,010
Continuing operations - acquired                                                         32              784
Discontinued operations                                                                   6                -
                                                                                      2,312            1,794

Gross profit                                                                          2,337            1,910

Administrative expenses                                                             (1,683)          (1,515)
Other operating income                                                                    2               30
                                                                                    (1,681)          (1,485)

Operating profit                                                                                  
Continuing operations - existing                                                        676              259
Continuing operations - acquired                                                          3              166
Discontinued operations                                                                (23)                -
                                                                                        656              425

Interest receivable                                                                      10               21
Interest payable                                                                       (32)             (35)

Profit on ordinary activities before taxation                                           634              411

Loss on sale of discontinued operation                                                 (34)                -
Tax charge on profit on ordinary activities                                           (239)            (163)

Retained profit on ordinary activities                                                  361              248
after taxation for the financial period                                                           

Earnings per ordinary share                                                           3.67p            2.60p
Diluted earnings per ordinary share                                                   3.61p            2.56p

Group balance sheet                                                                                         
for the year ended 31st March 2007                                                     2007             2006
                                                                                      £'000            £'000

Fixed assets                                                                                      
Intangible assets                                                                     2,140            2,280
Tangible assets                                                                         817              720

Total fixed assets                                                                    2,957            3,000

Current assets                                                                                    
Stocks                                                                                  389              297
Debtors                                                                                 951              689
Cash at bank and in hand                                                              1,469              487
                                                                                      2,809            1,473

Creditors:                                                                                        
Amounts falling due within one year                                                   (968)            (750)

Net current assets                                                                    1,841              723

Total assets less current liabilities                                                 4,798            3,723

Creditors:                                                                                        
Amounts falling due after more than one year                                          (287)            (417)

Provisions for liabilities and charges:                                                           
Deferred taxation                                                                      (13)             (13)

Net assets                                                                            4,498            3,293

Capital and reserves                                                                              
Called up share capital                                                               1,165              983
Share premium accounts                                                                1,464              728
Revaluation reserve                                                                     203              206
Profit and loss account                                                               1,666            1,376
                                                                                      4,498            3,293

Group statement of total recognised                                                                         
gains and losses                                                                                            
for the year ended 31st March 2007                                                     2007             2006
                                                                                      £'000            £'000

Profit for the financial year -attributable to the                                                
shareholders of the parent company                                                      353              248

Unrealised surplus on revaluation of properties                                           -              105

Total gain recognised since 31st March 2006                                             353              353

Group cash flow statement                                                                                   
for the year ended 31st March 2007                                                     2007             2006
                                                                                      £'000            £'000

Net cash inflow from operating activities                                               629              631
Returns on investments and servicing of finance                                        (22)             (13)
Taxation                                                                              (185)            (222)
Capital expenditure                                                                   (159)              (2)
Acquisitions and disposals                                                            (129)          (1,345)
Equity dividends paid                                                                  (74)                -
Net cash inflow/(outflow) before financing                                               60            (951)
Financing                                                                               922              630
Increase/(decrease) in cash in period                                                   982            (321)

Reconciliation of net cash flow to movement in net funds                                         
Increase/(decrease) in cash in the period                                               982            (321)
Cash inflow from increase in  debt                                                      (3)            (285)
Loans transferred with disposal of subsidiaries                                          45            (125)
Change in net debt resulting from cash flows                                          1,024            (731)
Net funds at beginning of period                                                         75              806
Net funds at end of period                                                            1,099               75

Reconciliation of operating profit to operating cash flow                                        
Operating profit                                                                        656              425
Depreciation/amortisation                                                               182              216
Loss on disposal fixed assets                                                             3                -
Increase in stock and WIP                                                              (92)             (95)
(Increase)/decrease in debtors                                                        (266)               93
Increase/(decrease) in creditors                                                        146              (8)
Net cash inflow from operating activities                                               629              631

Reconciliation of net cash flow to movement in net debt                                          
Increase/(decrease) in cash in period                                                   982            (321)
Net cash outflow/(inflow) from bank overdrafts                                            1              (1)
Net cash inflow from bank loans                                                        (21)            (349)
Net cash outflow/(inflow) from other loans                                               62             (62)
Cash outflow in respect of hire purchase                                                  -                2
Change in net debt                                                                    1,024            (731)

For further information please contact:
PHSC plc
Stephen King              01622 717700
www.phsc.plc.co.uk

Ruegg & Co Limited
Gavin Burnell            020 7584 3663

Hichens, Harrison & Co. plc
Daniel Briggs             020 7382 7776

PHSC plc