Final Results

Scott Wilson Group plc 12 July 2007 For Immediate Release 12 July 2007 SCOTT WILSON GROUP PLC - 2007 PRELIMINARY RESULTS Scott Wilson Group plc ("Scott Wilson" or "the Group"), the international consultancy offering integrated professional services in the transportation, property, environment and natural resources sectors, today issues its preliminary unaudited results for the 52 weeks ended 29 April 2007. Financial summary 2007 2006 Change Revenue including share of joint £261.0m £197.8m +32.0% ventures Group revenue £249.5m £185.9m +34.2% Operating profit £14.7m £21.1m -30.1% Adjusted* operating profit £16.3m £10.5m +55.3% Adjusted* operating margin 6.2% 5.3% Total dividend per share 3.3p 2.5p +32.0% Highlights • Record results, on an adjusted basis, lead to 5 successive years of double-digit revenue growth • Strong organic revenue growth of 18% • Full year dividend 10% higher than indicated at the time of the IPO reflecting the strength of the Group's performance • Four acquisitions completed during the year - all successfully integrated and performing above management expectations • Gross pension deficit significantly reduced to £12.4m in 2007: (2006: £33.6m) • 2007/8 off to a good start with a record order book of £257m and two major contract wins: Greece Central Motorway Concession (fees of £13m) and Three Counties Alliance (fees of £8m). • Two acquisitions since the year end. DCL Consulting Engineers Limited, a building services consultancy based in the South West of England for a total potential consideration of £1.1m and McLay Collier, a property structural engineering consultancy based in Glasgow, announced today for a goodwill payment of £2.7m. * The Directors believe that the presentation of adjusted operating profit, adjusted operating margin and adjusted earnings per share assists with the understanding of the performance of the Group. - Adjusted operating profit is operating profit adjusted for the impact of non-recurring items, restructuring costs, amortisation of business combination intangibles and the Group's share of taxation in relation to joint ventures. - Adjusted operating margin is adjusted operating profit expressed as a percentage of revenue including share of joint ventures. - Adjusted earnings per share is earnings per share adjusted for the impact of non-recurring items, restructuring costs and amortisation of business combination intangibles. Reconciliations of these measures to operating profit, operating margin and earnings per share are set out in note 16 to the consolidated financial statements. Geoff French, Chairman of Scott Wilson, commented: "These results demonstrate the Group's ability to take advantage of the buoyant trading conditions that currently exist in our key markets. The broad range of consultancy services that we have established across multiple sectors has increased our competitive edge and enabled Scott Wilson to achieve annual double-digit organic growth once again. "During the year, we expanded our capability through selective acquisitions, all of which have been successfully integrated into the Group. I am delighted that we have been able to announce a further acquisition today. The broader scope that we now have, together with our improved margins and record order book, means that the Board remains confident in its ability to deliver our strategic objectives and to continue to enhance shareholder value." For further information please contact: Scott Wilson Group plc www.scottwilson.com Geoff French, Chairman 01256 310 200 Stephen Kimmett, Finance Director 01256 310200 Lak Siriwardene, Head of Communications 07824 311762 Financial Dynamics Charlie Armitstead 020 7269 7291 Richard Mountain 020 7269 7291 A briefing for analysts and investors will take place today at 9.00am BST at Financial Dynamics, Holborn Gate, 26 Southampton Buildings, London WC2A 1PB. The presentation slides used at this briefing will be posted on the Group's website (www.scottwilson.com/news) at 9.00am. Scott Wilson Group plc Scott Wilson Group plc, with over 5,500 members of staff, is an international consultancy offering integrated professional services in the transportation, property, environment and natural resources sectors. It has doubled in size over the past few years and from its UK base controls a network of some 80 offices. www.scottwilson.com CHAIRMAN'S STATEMENT INTRODUCTION I am pleased to report another year of excellent growth for the Group. Our financial results show a continuing substantial improvement in revenue and adjusted* operating margins. We have made several selective acquisitions to build our expertise and coverage in our target sectors. In addition, our order book stands at record levels. These financial results for the Group have exceeded market expectations, which were upgraded several times in the course of the year. MACRO-ECONOMIC ENVIRONMENT Global infrastructure expenditure is projected to rise by nearly 50 per cent each decade according to The Organisation for Economic Co-operation and Development, the increase being fuelled by population growth, urbanisation and the need for sustainability. China is spending US$160bn on new infrastructure projects every year. India is spending some 8 per cent of its GDP on roads, ports and airport expansions. Urbanisation, migration and increased commercial/leisure travel are placing increasing demands on property and transport systems worldwide. Rapid globalisation is also creating an urgent need for sustainability and environmental services. LONG TERM STRATEGY AND BUSINESS OBJECTIVES Scott Wilson provides global consultancy services to the transportation, property, environment and natural resources market sectors. The Group's major market is in the UK which accounts for over 70 per cent of its revenue. International businesses are based in China/Hong Kong, South East Asia, India, the Middle East, Eastern Europe and Southern Africa. Key elements to our five year strategy of growth and development include: - organic growth to be at least 10 per cent per annum; - adjusted* operating margin to be improved to at least 8 per cent; - working capital to be 80 days or less, calculated by reference to Group revenue; - overhead costs to be reduced to below 16.5 per cent of revenue; - adjusted* fully diluted EPS to grow by at least 15 per cent per annum; and - at least 30 per cent of work to be generated outside the UK. To further reduce the risks faced by the Group, we are also seeking to achieve a better balance across our market sectors with term contracts accounting for 35 per cent of total revenue, 80 per cent or more of revenue from existing or recent clients and no single project accounting for more than 10 per cent of our annual revenue. Acquisitions will be considered in support of these strategic objectives to provide a better balance across our market sectors, to reduce our dependence on transportation and to help maintain a diverse UK and international portfolio. We have made considerable progress over the last year on the key elements of our strategy. We have gained market share in the UK, we have added more focus to our international work and we have achieved a significant improvement in the balance across our market sectors. Our recent acquisitions are integrating into the business very well and have contributed considerably to the progress we have made. Our Board of Directors monitors our progress by reference to a number of key performance indicators and performance last year is compared to our targets and our results for the previous year. RESULTS The adjusted* results for the year were notably ahead of the prior year. Revenue, including our share of joint ventures, increased by £63.2m (32 per cent) to £261.0m, of which £36.0m (18.2 per cent) resulted from organic growth with the remainder resulting from the acquisitions made in the course of the year. Group revenues increased from £185.9m to £249.5m, a rise of 34.2 per cent. Group adjusted* operating profit increased by 55.3 per cent to £16.3m (2006: £10.5m) with the adjusted* operating margin improving from 5.3 per cent to 6.2 per cent. This result was achieved in spite of trading losses and restructuring costs of £1.6m incurred in the period in respect of the Group's businesses in Southern Africa. Basic earnings per share are 13.86p (2006: 38.90p) and diluted earnings per share are 13.35p (2006: 37.70p). However, as the Group only floated in March 2006, the prior year comparatives have been recalculated on a proforma basis using shares in issue at 30 April 2006 and assuming they were in issue for the whole of that financial year and also assuming interest receivable at 5.0 per cent on the flotation proceeds of £62.1m throughout the period. The current year adjusted* fully diluted earnings per share of 14.48p includes prior year tax adjustments of £466,000. If they were excluded, adjusted* fully diluted earnings per share would have been 15.10p. There was a net cash inflow from operations of £19.6m (2006: £12.6m) before non-recurring items, restructuring costs and pension payments of £23.4m (2006: £12.1m) in the year. This shows cash conversion of 120 per cent (2006: 120 per cent) for adjusted* operating profit. DIVIDEND The Board recommends a final dividend of 2.3p per share for approval by shareholders to be paid on 5 October 2007 to Ordinary shareholders on the register on 7 September 2007. The total dividend for the year of 3.3p is some 10.0 per cent higher than the expectations set at flotation, reflecting the strength of the Group's performance. It remains our intention to have a progressive dividend policy balancing growth in earnings, investment plans and dividend cover levels. PENSIONS The Group has completed all the actions disclosed in the Prospectus. The gross deficit reduced in the period from £33.6m to £12.4m. This was a slightly greater reduction than originally anticipated as external factors moved favourably, in addition to the special pension payments made. ACQUISITIONS During the year and following the year end, we have continued our policy of making selective acquisitions to build our expertise and diversity in our target sectors. In May 2006, we acquired the minority interest in Scott Wilson Pavement Engineering Ltd, a leading UK consultancy in the evaluation of highways, runway pavements and rail track beds. In June 2006, the acquisition of Roscoe Postle Associates Inc of Canada significantly enhanced our position, client base and geographical coverage in the mining sub-sector of natural resources. Ferguson McIlveen LLP was acquired in November 2006. This leading consultancy, headquartered in Northern Ireland, provides design consultancy services for the property, environment and transportation sectors. In December 2006 the acquisitions of Cameron Taylor Group Limited and DGP International Limited were completed. Cameron Taylor has significantly increased the Group's presence in the UK property sector. DGP has brought new skills within the nuclear, petrochemical and pharmaceuticals sub-sectors. Following the year end, we have acquired DCL Consulting Engineers Ltd and exchanged contracts on the acquisition of McLay Collier LLP. DCL, a building services consultancy based in South West England, was acquired in May 2007. McLay Collier, who are based in Glasgow and operate in the property sector, will join the Group on 25 July 2007. These two acquisitions enhance the breadth of our service offerings in these geographic areas. EMPLOYEES At the end of April 2007 we had over 5,500 staff, a significant increase from the 4,000 at 30 April 2006. We know that the quality of our employees is one of the Group's key attributes. They remain critical to our reputation, our continuing innovation and to the delivery of these record results. On behalf of the Board, I would like to record our thanks to all members of staff for their outstanding contributions over the last year. We were delighted that William Kemp, whose entire working career has been with Scott Wilson, was awarded a MBE in The Queen's Birthday Honours for his services to civil engineering and music in North Derbyshire. We were equally delighted that our John Harvey, the statutory appointed Mine Manager at Combe Down Stone Mines, was also awarded a MBE for services to the mining industry and as deputy Gaveller for the Forest of Dean (the Crown's Mineral Agent). AWARDS The recent major awards that we have won are a testament to the continuing dedication and talent of our staff. Our achievements were acknowledged by our industry peers through the award of the NCE/ACE 'Major Firm of the Year' and we have also been recognised by the investment community over the past six months through the awards of 'New Company of the Year' (PLC Awards), 'Best Investor Relations for a New Issue' (IR Magazine) and 'IPO of the Year' (Shares Magazine). CORPORATE AND SOCIAL RESPONSIBILITY We recognise the fundamental importance of sustainability and integrity to our business and are committed to continual improvement in our social, environmental and ethical performance. This is supported in-house by having environmental, social inclusion and equality, health and safety skills in-house and by our corporate commitment to the UN Global Compact (the world's largest CSR initiative). We also support our staff-led Millennium Project, a registered charity which focuses on the relief of poverty, hardship and distress among children in developing countries by encouraging staff participation. We also give corporate support as a patron to the RedR charity and its humanitarian relief efforts. OUTLOOK The Board has a clear strategic plan for the period up to 2012 and the Group is currently performing ahead of that plan. With the Group's order book standing at record levels and the integration of the recent acquisitions, the prospects for growth are excellent. The Group has re-negotiated and increased its banking facilities and has significant capacity to finance continued organic growth and further selective acquisitions. The Group is currently responding to an unprecedented global demand for infrastructure. The growing economies of China and India are encouraging rapid urbanisation of their populations. Western economies continue to invest heavily across both public and private sectors on renewal and modernisation. Increases in global trading, personal travel and endemic urban congestion are putting enormous pressure on existing transport systems. Private investment in property continues to be buoyant in many parts of the world and pressure on water, sources of energy and raw materials continues to grow. This is occurring against a background of universal concern on climate change and growing demand for environmental protection and sustainability. The Board remains confident in its ability to deliver our strategic objectives and to continue to enhance shareholder value. GEOFF FRENCH GROUP CHAIRMAN 12 July 2007 BUSINESS REVIEW REVIEW BY DIVISION The 2007 financial year has been characterised by the delivery of profitable growth, both organic within the Group's strategic framework and from identifying, delivering and integrating targeted acquisitions. Growth in revenue and operating profit has been ahead of the Board's expectations and we remain on course to achieve sustainable convergence in operating margins across the business as forecast. The acquisitions have been principally in connection with the property sector which has served to reduce the dominance of transportation and has provided additional market risk mitigation by widening our offering into higher rated services. The Divisions are reporting a strong order book spread across the principal sectors and pipeline opportunities remain buoyant. UK Central Division has continued to be a major player in the roads sub-sector by delivering significant projects for the Highways Agency (HA) primarily through the Early Contractor Involvement (ECI) procurement route in association with our blue chip contracting partners. The joint venture with Alfred McAlpine plc, 'AMScott' performed in line with expectations. The AMScott brand is well regarded and will be in a strong position for the two Managing Agent Contracts (MAC) that the HA has brought forward for bidding in 2007/2008. In addition, the Division won a significant innovative Three Counties (Derbyshire, Leicestershire and Nottinghamshire) Alliance Local Authority Framework Contract in the East Midlands which is forecast to deliver significant revenue over a three year period. The acquisition of DGP International Limited added considerably to the Group's offering in nuclear, petrochemical and pharmaceuticals and increased the property portfolio in the industrial sub-sector. This has also provided high level resource to enable rationalisation of the Group's business activity in the North West of England. UK South Division has delivered considerably improved operating margins during the financial year as part of the strategy for convergence of operating performance benchmarked against other UK Divisions. Organic growth in resources is in line with the Board's expectations and the Division has delivered increased revenue with improved utilisation. The Division continues to work extensively in the transportation and property sectors and has significant major projects in London, including Brent Cross/ Cricklewood Redevelopment, West Hendon Regeneration and Holborn Viaduct Development. The Division's position in the property sector was enhanced by the acquisition of Cameron Taylor Group and, since the year end, DCL Consulting which have brought a step change to the Group's offering in the private sector and enhanced our client portfolio in the South of England and West Midlands. Scotland & Ireland Division has maintained a dominant position in roads in Scotland. The acquisition announced today of McLay Collier is a further step in balancing the sector portfolio bringing new resources and experience to enhance the Group's growing workload and reputation in the property sector in Scotland. The Division has effectively doubled in size with the acquisition of Ferguson McIlveen. This has provided us with a strong presence in Belfast and strengthened our position in the North of England in both the property and environment sectors. The acquisition complements existing investment in Northern Ireland where we have a strong market position in the roads sub-sector. In addition, we have maintained a solid position in the South of Ireland, particularly in the roads sub-sector. Within the UK Railways Division the year was dominated by the ongoing delivery of several long term multidisciplinary major projects including West Coast Route Modernisation, Crossrail and Edinburgh Airport Rail Link. Additionally, there has been the commencement of work on the East London Line. As a result, net revenue during the year increased by 22 per cent, purely organically. International projects comprise approximately 10 per cent of revenue with projects in Jamaica, Greece, Romania, Saudi Arabia and Australia. In addition, the Division was appointed to conduct preliminary engineering and preparation of Parliamentary Orders on the Airdrie to Bathgate re-opening, which is the new route from Glasgow to Edinburgh, one of the key priorities for rail investment in the UK. The Division has maintained its position on a reduced list of Network Rail framework consultants for Switch and Crossing Renewals and is currently bidding for the next stage of the multifunctional engineering framework for the same client. There has been an increase of 20 per cent in staff numbers during the year and the recruitment campaign continues to support planned growth in the sector. The International Division has developed an integrated trading model with five of the six regional businesses exceeding their revenue and profit budgets. Overall, revenue increased by 23 per cent, with improved margins. This result is particularly encouraging despite including substantial trading losses and restructuring costs in Southern Africa following the closure of long standing businesses in Zimbabwe, Botswana and Malawi. Modest operations were retained in Zambia specifically for the mining sub-sector and in Mozambique to complete a number of transport and infrastructure projects. In South Africa, the continuing business was focused in Johannesburg. Growth has been particularly strong in the Middle East and India in addition to several major project commissions in the rest of the world managed from the UK. The Division was further boosted by the successful integration of the RPA acquisition which continues to produce double digit operating margins and provides access to significant cross trading opportunities with a number of global clients in the mining sub-sector. The UK managed projects focus predominantly on the fast growing Natural Resources sector in energy, water, mining and ground engineering where a series of major projects have been secured for global clients in South East Asia, Africa and South America. Projects include a power trading study on the Nile in Sudan, Egypt and Ethiopia, new hydro-power scheme in Malaysia and Sierra Leone, a power investment programme for AES in Cameroon and ground engineering work for Shell in Sakhalin. Transportation remains the largest sector by revenue and includes major roads projects in Greece, Poland, Serbia, India and Ethiopia with advice on PPP toll roads being provided for clients in China, Ukraine and in the United States. Port work is growing, centred in China and the Middle East with projects in Dubai, Thailand, India and China. The Division is also active in airports from centres of excellence in the UK and Bangkok providing services in Qatar, Iraq, Antigua and China. The international property portfolio continues to expand particularly in China and the Middle East. The Division continues to benefit from the property boom in the Gulf and secured a series of high profile projects in Bahrain, including the National Assembly Building and a number of major island based property developments where master planning, marine engineering, design and supervision of commercial and residential property development can be offered. The smallest international sector is environment, which covers our planning capability, landscaping, environmental management and waste management. Much work is done in support of the other sectors in response to continuing pressure for sustainable solutions. However, a centre of master planning and landscape design has been developed in Shanghai which is now being used not only in China but also in India and the Middle East. Access to high quality project work and international assignment opportunities is a significant factor in retaining, motivating and developing our technical staff. Established regional operations in China/Hong Kong, India, SE Asia, the Middle East, Eastern Europe and Southern Africa, together with extensive international projects, provide many opportunities for internal transfer and international working. FINANCIAL REVIEW Financial performance The financial performance demonstrates the strong organic revenue growth (18.2 per cent) coupled with excellent first year contributions from our recent acquisitions which resulted in total revenue rising 32.0 per cent to £261.0m. Adjusted* profit margin improved from 5.3 per cent to 6.2 per cent with notable margin improvements in both UK Central and UK South Divisions. Earnings per share Basic earnings per share are 13.86p (2006: 38.90p) and diluted earnings per share are 13.35p (2006: 37.70p). However, as the Group only floated in March 2006, the prior year comparatives have been recalculated on a proforma basis using shares in issue at 30 April 2006 and assuming they were in issue for the whole of that financial year and also assuming interest receivable at 5% on the flotation proceeds of £62.1m throughout the period. The current year adjusted* fully diluted earnings per share of 14.48p includes prior year tax adjustments of £466,000. If they were excluded adjusted* fully diluted earnings per share would have been 15.10p. Dividends At the time of flotation, the Board signalled that the Group intended to maintain an appropriate level of dividend cover having regard to the level of dividends paid by quoted peers, whilst taking into account growth in earnings and the Group's future expansion plans. It was estimated at that time that the full year dividend for 2007 would be 3.00p. After an excellent first year's trading as a quoted company, the Board believes that it is appropriate to increase the level of dividend and is recommending a final dividend of 2.30p (2006: nil) giving a full year dividend of 3.30p (2006: 2.50p). This represents a 10 per cent increase on expectations and is covered 4.1 times by the profit for the 2007 financial year. Taxation The taxation charge, including that relating to joint ventures, amounts to £5.8m (2006: £6.4m) which represents an effective rate of 36.8% (2006: 33.3%). This is higher than the UK statutory rate of 30% principally as a result of unrelieved losses in Africa and a prior year tax adjustment, which added 3.1% and 2.9% respectively to the effective tax. Tax paid during the year was £1.2m (2006: £2.5m). This reduction is mainly due to tax relief on the special pension payments made during the year from which the Group will also benefit in the current financial year. Finance costs The net finance costs changed considerably as a result of repaying bank debt and injecting funds into the pension schemes from the flotation proceeds. The result was that the Group had net finance income of £0.7m in 2007 compared with net finance costs of £2.1m in 2006. Pensions The Group has operated two defined benefit schemes, both of which are closed to new members, and a defined contribution scheme throughout the period. During the period £16.6m was injected into the two defined benefit share schemes and on 1 October 2006 the proposed changes to schemes, agreed ahead of flotation, took effect. Simultaneously, a salary sacrifice arrangement was implemented. As part of the acquisition of Ferguson McIlveen, the Group took on responsibility for its defined benefit scheme which at the time of acquisition had a gross deficit of £2.3m. This scheme is also closed to new members. The aggregate gross deficit at 29 April 2007 was £12.4m (2006: £33.6m). Cash flow Net cash inflow from operations totalled £19.6m (2006: £12.6m) influenced by revenue growth of 18 per cent. Principally, as a result of the pension scheme injection and the three major acquisitions made in the second half of the year, the Group moved from a net cash position of £27.0m at 30 April 2006 to a net debt position of £14.7m at 29 April 2007. Treasury Financial instruments comprise borrowings, internal cash resources and trade debtors and creditors arising from normal trading. The Group renegotiated its banking facilities during the year and now has committed composite facilities of £50m to finance continued organic growth, in line with our strategic plan, and acquisitions. Provisions As with other companies in our sector the Group maintains professional indemnity insurance to provide cover against significant losses in the event of professional negligence claims being made against a Group company. Although we endeavour to ensure client satisfaction and develop and maintain client relationships, it is not possible to eliminate contract claims. The Group will look to defend claims but any such circumstances that may give rise to a claim are assessed and on the basis of advice received provision is made where appropriate. Acquisitions During the financial year, we have completed four acquisitions in addition to buying out the minority partners in Scott Wilson Pavement Engineering Ltd. Further information in respect of the acquisitions can be found within the Chairman's Statement and the Review by Division. Post balance sheet events On 9 May 2007, the Group made contributions totalling £700,000 to the Scott Wilson Shared Cost Section of the industry-wide Railways Pension scheme. Also on 9 May 2007, the Group acquired the entire share capital of DCL Consulting Engineers Limited, a building services consultancy based in the South West of England for a total potential consideration of £1.1m. On 5 July 2007, the Group sold its freehold property in Glasgow for proceeds of £1.75m. With a carrying value of £900,000 and directly attributable disposal costs in the region of £25,000, the anticipated profit on sale is £825,000. On 11th July 2007, contracts were exchanged for the acquisition of McLay Collier LLP, a Glasgow based practice which operates within the property sector, for a goodwill payment of £2.7m plus a payment for net assets expected to be £0.7m. OUTLOOK In the UK and Irish construction markets, the Group continues to benefit from encouraging growth. Major expenditure commitments are set to continue within the rail sector, in road maintenance and in the airports development programme which will present substantial opportunities to the Group over the coming year. This is in addition to increased Government spending on nuclear decommissioning and on health and education, particularly under the PFI scheme. In the private sector, investment in logistics and commercial space is expected to be particularly strong and while new build residential and infrastructure have appeared to slow in recent months, regeneration opportunities remain positive. Considerable investment continues to take place in Ireland. In Southern Ireland, transport investment continues to be high, focusing on the delivery of the National Development Plan and investment in the property sector remains buoyant. In Northern Ireland, there is significant investment in the province resulting from the peace dividend, EU funding and investment from the private sector. The Northern Ireland Assembly has inherited an ambitious roads programme and we are involved in its delivery. Our acquisitions in 2006 have brought us exposure to new sub-sectors and position us well to take advantage of anticipated continued growth in consultancy fees in the residential, education and industrial sub-sectors and to increase market share in health. New services derived from acquisitions will allow us to provide a fully integrated solution to the property sector which meets clients' aspirations for elegance, innovation, best value and sustainability in design. This will be a significant contributor in increasing market share. We continue to be a strong player in the environment sector with the latest market review showing that we are among the top 12 consultancies by fees rendered in 2006. Opportunities exist for further revenue growth in the sector. The rate high of growth currently being experienced in this is set to continue and we are well placed to capitalise on this in development-linked disciplines constituting the largest part of the market. Recent acquisitions have dramatically boosted our participation in the rapidly growing waste and resource management sub-sectors which are being driven by the EU Landfill Directive's requirement for Local Authorities to divert waste away from landfill. We are currently working on waste PFI schemes for Lancashire, Derby, Derbyshire and a £600m scheme in Manchester, which is purported to be the largest in Europe. In International Division, the priority remains to continue to improve operating margins. The regional business model is settling in and the horizontal sharing of resources, expertise and clients is set to continue. The market opportunities remain enormous and we are ideally positioned to take advantage. The Group enters the new financial year with a more balanced sector split following the acquisitions made in the second half. The level of organic growth achieved exceeded the five-year Strategic Plan. This, together with the margin improvement and order book of £257m, means that our prospects remain very positive and we look to the future with confidence. HUGH BLACKWOOD JOINT CHIEF EXECUTIVE 12 JULY 2007 RON WALL JOINT CHIEF EXECUTIVE 12 JULY 2007 STEPHEN KIMMETT FINANCE DIRECTOR 12 JULY 2007 SCOTT WILSON GROUP PLC Preliminary unaudited results for the 52 weeks ended 29 April 2007 CONSOLIDATED INCOME STATEMENT (unaudited) For the 52 weeks ended 29 April 2007 52 weeks ended 29 April 2007 52 weeks ended 30 April 2006 Notes Adjusted* Note i Total Adjusted* Note i Total £'000 £'000 £'000 £'000 £'000 £'000 Continuing operations Revenue including 261,002 - 261,002 197,765 - 197,765 share of joint venture revenues Less: share of (11,472) - (11,472) (11,841) - (11,841) joint venture revenues Group revenue 249,530 - 249,530 185,924 - 185,924 Cost of sales (158,401) - (158,401) (117,964) - (117,964) Gross profit 91,129 - 91,129 67,960 - 67,960 Administrative 3 (75,995) (1,210) (77,205) (58,843) 10,977 (47,866) expenses Share of result 3 1,164 (346) 818 1,380 (376) 1,004 of joint ventures Operating profit 16,298 (1,556) 14,742 10,497 10,601 21,098 Finance income 9 11,275 8,283 Finance costs 10 (10,583) (10,400) Profit before 15,434 18,891 taxation Taxation 11 (5,462) (6,040) Profit for the 9,972 12,941 year Attributable to: Equity holders of 9,986 12,527 the Company Minority (14) 414 interests 9,972 12,941 Earnings per share: From continuing 12 13.86p 38.90p operations - basic From continuing 12 13.35p 37.70p operations - diluted There were no discontinued operations in either year. *Before items described in note i below. Note i : Non-recurring items, restructuring costs, amortisation of business combination intangibles and the Group's share of taxation in relation to joint ventures, as detailed further in note 3. CONSOLIDATED STATEMENT OF RECOGNISED INCOME AND EXPENSE (unaudited) For the 52 weeks ended 29 April 2007 52 weeks 52 weeks ended ended 29 April 30 April 2007 2006 £'000 £'000 Currency translation differences from translation of foreign operations (865) (381) Actuarial gains and losses on defined benefit pension schemes 3,555 (4,376) Tax on items recognised directly in equity (807) 1,427 Deferred tax relating to unexercised share options 911 - Income/(expense) recognised directly in equity 2,794 (3,330) Profit for the year 9,972 12,941 Total recognised income for the year 12,766 9,611 Attributable to Equity holders of the Company 12,780 9,221 Minority interests (14) 390 12,766 9,611 CONSOLIDATED BALANCE SHEET (unaudited) As at 29 April 2007 Notes 29 April 2007 30 April 2006 £'000 £'000 Assets Non-current assets Non-current assets Tangible fixed assets 17,342 13,847 Goodwill 34,538 6,864 Other intangible assets 15,908 1,333 Investments in joint ventures 837 680 Deferred tax assets 5,456 11,897 74,081 34,621 Current assets Trade and other receivables 99,514 65,483 Current tax assets 1,314 1,089 Cash and cash equivalents 13,689 33,067 114,517 99,639 Total assets 188,598 134,260 Equity and Liabilities Equity attributable to equity holders of the Company Issued capital 95,168 86,277 Other reserves (6,047) (6,074) Retained earnings (15,289) (28,426) 13 73,832 51,777 Minority interests 74 971 Total Equity 73,906 52,748 Non-current liabilities Borrowings 3,801 2,304 Provisions 3,767 - Retirement benefit obligations 12,449 33,577 20,017 35,881 Current liabilities Trade and other payables 65,102 40,531 Current tax liabilities - 474 Borrowings 24,537 3,813 Provisions 5,036 813 94,675 45,631 Total liabilities 114,692 81,512 Total Equity and Liabilities 188,598 134,260 CONSOLIDATED CASH FLOW STATEMENT (unaudited) For the 52 weeks ended 29 April 2007 Notes 52 weeks 52 weeks ended ended 29 April 30 April 2007 2006 £'000 £'000 Cash flows from operating activities Cash generated from operations 15 19,631 12,629 Defined benefit pension plan contributions (23,415) (12,069) Dividends received from joint ventures 1,547 1,575 Income tax paid (1,207) (2,510) Net cash flows from operating activities (3,444) (375) Cash flows from investing activities Purchase of tangible fixed assets (5,416) (6,946) Purchase of intangible assets (1,917) (995) Proceeds from sale of tangible fixed assets 183 6 Acquisition of subsidiaries, net of cash and cash equivalents acquired (28,676) (606) Net cash flows from investing activities (35,826) (8,541) Cash flows from financing activities Interest received 548 154 Interest and finance charges paid (762) (1,780) Proceeds from issue of Ordinary Shares, net of issue costs of £Nil (2006: 35 62,122 £5.9m) Receipt of new loans and finance lease advances 24,513 5,831 Repayment of loans and finance leases (4,518) (18,871) Dividends paid to equity shareholders (747) (1,334) Net cash flows from financing activities 19,069 46,122 Net (decrease)/increase in cash and cash equivalents (20,201) 37,206 Cash and cash equivalents at start of year 33,067 (4,154) Foreign exchange (51) 15 Cash and cash equivalents at end of year 12,815 33,067 NOTES TO THE ACCOUNTS 1 Basis of preparation The financial information set out in this preliminary announcement has been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted for use in the European Union. The announcement is prepared on the basis of accounting policies as set out in the previous year's financial statements. The audit report on the full financial statements has yet to be signed and therefore the financial information presented unaudited. The financial information set out in the announcement does not constitute the Company's statutory accounts under the meaning of section 240 of the Companies Act 1985 for the periods ended 29 April 2007 or 30 April 2006. The financial information for the period ended 30 April 2006 is derived from the statutory accounts for that year which has been delivered to the Registrar of Companies. The auditors reported on those accounts; their report was unqualified and did not contain a statement under section 237(2) or (3) of the Companies Act 1985. The statutory accounts for the period ended 29 April 2007 will be finalised on the basis of the financial information presented by the Directors in this preliminary announcement and will be delivered to the Registrar of Companies following the Company's Annual General Meeting. This preliminary announcement was approved by the Board of Directors on 11 July 2007. 2 Segment analysis The Group is an international consultancy offering integrated professional services and the Directors consider that the Group operates in this single business segment. The trading activities and performance of the Group are managed through five geographical divisions, UK Central, UK South, Scotland & Ireland, UK Railways and International. UK Central: consultancy services on projects in the Midlands and Northern regions of England and also the Group's pavement engineering consultancy business, which operates worldwide. UK South: consultancy services on property and transportation projects principally in London and the South of England. Scotland consultancy services on projects in Scotland, Northern & Ireland: Ireland, Republic of Ireland and the North East of England. UK Railways: railway-related consultancy services to infrastructure owners and train operators, principally in the UK. International: consultancy services on projects undertaken outside the UK, throughout the world, including both projects undertaken from the UK and those undertaken by the Group's overseas operations. Core: the Group's head office function, together with revenues, costs, assets and liabilities not allocated to any of the other segments. Segment results for the 52 weeks ended 29 April 2007: UK Central UK South Scotland & UK Railways International Core Total £'000 £'000 Ireland £'000 £'000 £'000 £'000 £'000 Revenue including share of 75,324 56,938 22,146 43,030 63,564 - 261,002 joint ventures Sales to external 60,215 52,237 20,376 54,093 62,609 - 249,530 customers Sales to other segments 7,185 8,511 2,539 1,127 6,156 - 25,518 Revenue from all sales 67,400 60,748 22,915 55,220 68,765 - 275,048 Sales on behalf of other (2,398) (3,809) (770) (12,190) (6,351) - (25,518) segments Group revenue 65,002 56,939 22,145 43,030 62,414 - 249,530 Operating profit before 6,688 3,739 1,658 3,145 1,068 - 16,298 non-recurring items, restructuring costs and amortisation of business combination intangibles Group's share of taxation (294) - - - (52) - (346) relating to joint ventures Amortisation of business (317) (286) (390) - (217) - (1,210) combination intangibles Operating profit - segment 6,077 3,453 1,268 3,145 799 - 14,742 result Finance income 11,275 Finance costs (10,583) Profit before taxation 15,434 Taxation (5,462) Profit for the year 9,972 Share of result of joint ventures before taxation of £979,000 and £185,000 is included in UK Central and International respectively. Segment results for the 52 weeks ended 30 April 2006: UK Central UK South Scotland UK Railways International Core Total £'000 £'000 & Ireland £'000 £'000 £'000 £'000 £'000 Revenue including share of 56,679 40,029 13,342 35,144 52,571 __ 197,765 joint ventures Sales to external 42,780 37,866 11,893 42,090 51,295 - 185,924 customers Sales to other segments 7,165 4,045 2,147 804 3,404 - 17,565 Revenue from all sales 49,945 41,911 14,040 42,894 54,699 - 203,489 Sales on behalf of other (3,236) (1,882) (698) (7,750) (3,999) - (17,565) segments Group revenue 46,709 40,029 13,342 35,144 50,700 - 185,924 Operating profit before 4,354 1,382 1,112 2,831 818 - 10,497 non-recurring items, restructuring costs and amortisation of business combination intangibles Group's share of taxation (285) - - - (91) - (376) relating to joint ventures Restructuring costs - (471) - - - (220) (691) Loss relating to Basing - - - - - (780) (780) View Investments Ltd Gain arising on retirement - - - - - 13,546 13,546 benefit plan changes Costs relating to - - - - - (1,098) (1,098) Admission Operating profit - segment 4,069 911 1,112 2,831 727 11,448 21,098 result Finance income 8,283 Finance costs (10,400) Profit before taxation 18,981 Taxation (6,040) Profit for the year 12,941 Share of result of joint ventures before taxation of £950,000 and £430,000 is included in UK Central and International respectively. 3 Non-Recurring Items, Restructuring Costs, Amortisation of Business Combination Intangibles and the Group's Share of Taxation in relation to Joint Ventures Note 52 weeks 52 weeks ended ended 29 April 2007 30 April 2006 £'000 £'000 Restructuring costs 4 - (691) Operating loss relating to Basing View Investments Ltd 5 - (780) Gain arising on retirement benefit plan changes 6 - 13,546 Costs relating to Admission 7 - (1,098) Amortisation of intangible assets acquired in business combinations (1,210) - Group's share of taxation relating to joint ventures 8 (346) (376) Total (1,556) 10,601 4 Restructuring costs In the 52 week period ended 30 April 2006, the Group incurred £0.7m redundancy costs resulting from restructuring in the UK South (£0.5m) and International (£0.2m) Divisions. 5 Loss relating to Basing View Investments Ltd On 15 March 2006, the Company acquired Basing View Investments Ltd (BVI), which held the 34.34 per cent interest in Scott Wilson Holdings Ltd not then held by the Company and liabilities under various loan and redeemable share instruments. The Company immediately purchased, or funded the settlement of, all those liabilities. As described under 'Basis of Preparation' in note 2, the financial statements of the Group consolidate the revenues, costs, assets, liabilities and cash flows of BVI and its subsidiaries throughout both the period for which they are prepared and the comparative prior period. The operating (loss)/profit relating to BVI substantially reflects exchange movements arising on the translation of US Dollar denominated liabilities, which have now been settled. 6 Gain arising on retirement benefit plan changes In March 2006, the trustees and substantially all of the members of the final salary (defined benefit) sections of the Scott Wilson Pension Scheme (SWPS) agreed, conditional on the Company's Admission to the Official List and the payment of a minimum £1.6m special cash contribution into SWPS, to break the link from 1 October 2006 between accrued pensionable service up to that date and future salary increases. Additionally, they agreed that from 1 October 2006 active members would either pay increased contributions, accrue pension benefit at a reduced rate or switch into the Group's money purchase (defined contribution) section. Also in March 2006, the trustees and substantially all of the members of the Scott Wilson Shared Cost Section of the industry-wide Railways Pension Scheme (SWRPS), a defined benefit arrangement, agreed, conditional on the Company's Admission to the Official List and the payment of a £2.0m special cash contribution into SWRPS, to break the link from 1 October 2006 between accrued pensionable service up to that date and future salary increases. The impact of these changes is to reduce the overall gross deficit on these schemes by £13.5m. 7 Costs relating to Admission During the 52 week period ended 30 April 2006, costs of £1.1m were incurred in relation to the Admission of the Company to the Official List. Additionally, costs of £4.8m were incurred in relation to the issue of additional Ordinary Shares at the time of Admission, which have been charged against the share premium. 8 Group's share of taxation relating to joint ventures The Group's share of tax in relation to joint ventures has been included as an adjustment in order to present operating profit before tax (which would have been arrived at under UK GAAP equity accounting), a measure which Scott Wilson management uses for internal performance analysis. Comparative figures have been reclassified accordingly. 9 Finance income 52 weeks ended 52 weeks ended 29 April 2007 30 April 2006 £'000 £'000 Interest income on bank deposits 630 345 Expected return on pension plan assets 10,645 7,938 11,275 8,283 10 Finance costs 52 weeks ended 52 weeks ended 29 April 2007 30 April 2006 £'000 £'000 Interest on bank loans and overdrafts 452 723 Interest on other loans 73 489 Preference shares redemption premium 46 304 Finance lease charges 350 264 Unwind of discount on deferred consideration 104 - Interest on retirement benefit obligations 9,558 8,620 10,583 10,400 11 Taxation 52 weeks ended 52 weeks ended 29 April 2007 30 April 2006 £'000 £'000 Current tax (85) 1,567 Deferred tax 5,547 4,473 5,462 6,040 12 Earnings per share Basic earnings per share is calculated by dividing the profit attributable to equity holders of the Company by the weighted average number of Ordinary Shares in issue during the period, excluding Ordinary Shares held by the Scott Wilson Holdings Ltd Employee Share Ownership Trust. The weighted average number of shares used in the calculation of earnings per share amounts for the comparative period has been adjusted to reflect the restructuring under which each Ordinary Share in Scott Wilson Holdings Ltd was exchanged for four Ordinary Shares in Scott Wilson Group plc. 52 weeks 52 weeks ended ended 29 April 30 April 2007 2006 £'000 £'000 Profit attributable to equity holders of the Company 9,986 12,527 Weighted average number of Ordinary Shares in issue (thousands) 72,047 32,203 Basic earnings per share (p) 13.86p 38.90p Weighted average number of Ordinary Shares in issue (thousands) 72,047 32,203 Dilutive effect of share options 2,418 1,025 Dilutive effect of business combination deferred consideration shares 360 - Diluted weighted average number of Ordinary Shares in issue (thousands) 74,825 33,228 Diluted earnings per share (p) 13.35p 37.70p 13 Reconciliation of changes in equity Total £'000 At 30 April 2006 51,777 Changes in equity in 2007: New shares issued net of issue costs 8,891 Profit for the year 9,986 Other movements 3,178 At 29 April 2007 73,832 14 Dividends A dividend equivalent to 2.5p per Ordinary Share in relation to the 52 weeks ended 30 April 2005, totalling £667,000, was declared in October 2005 (paid in January 2006) and a dividend of 2.5p per Ordinary Share for the 52 weeks ending 30 April 2006, totalling £667,000, was declared and paid in March 2006. An interim dividend for the 52 weeks ended 29 April 2007 of 1.0p per Ordinary Share was declared and paid in February 2007. No dividends have been declared by the Company subsequent to 29 April 2007. A final dividend for the 52 weeks ended 29 April 2007 of 2.3p per Ordinary Share is being proposed by the Directors. As this dividend is subject to approval by shareholders at the Annual General Meeting, it is not reflected as a liability at 29 April 2007. 15 Cash generated from operations 52 weeks 52 weeks ended ended 29 April 30 April 2007 2006 £'000 £'000 Operating profit 14,742 21,098 Gain arising on retirement benefit plan changes - (13,546) Cost of Admission recognised through the Income Statement - 1,098 Share of result of joint ventures (818) (1004) Movement on the acquisition of minority interests (117) - Loss on sale of tangible fixed assets 83 - Defined benefit pension plan current service cost 4,631 4,757 Depreciation 3,030 2,176 Amortisation 2,221 656 Increase in receivables and prepayments (15,790) (14,722) Increase in payables and accruals 9,380 11,433 Increase in provisions 1,802 632 Share-based compensation expense 467 51 Cash generated from operations 19,631 12,629 16 Reconciliation of adjusted Group results The Directors believe that the presentation of adjusted operating profit and adjusted operating margin assist with the understanding of the results of the Group. Adjusted operating profit is operating profit adjusted for the impact of non-recurring items, restructuring costs, amortisation of business combination intangibles and the Group's share of taxation in relation to joint ventures. Adjusted operating margin is adjusted operating profit expressed as a percentage of revenue including share of joint ventures. A reconciliation of these measures to Group operating profit is given below. Adjusted operating profit 52 weeks ended 52 weeks ended 29 April 30 April 2007 2006 £'000 £'000 Statutory operating profit 14,742 21,098 Restructuring costs - 691 Loss relating to Basing View Investments Ltd - 780 Gain arising on retirement benefit plan changes - (13,546) Costs relating to Admission - 1,098 Amortisation of intangible assets acquired in business combinations 1,210 - Group's share of taxation relating to joint ventures 346 376 Adjusted operating profit 16,298 10,497 Adjusted operating margin 6.2% 5.3% Adjusted earnings per share The Directors believe that the presentation of adjusted earnings per share assists with the understanding of the results of the Group. Adjusted earnings per share is earnings per share adjusted for the impact of non-recurring items, restructuring costs and amortisation of business combination intangibles. The weighted average number of shares used in the calculation of adjusted earnings per share amounts for the comparative period has been adjusted to reflect the restructuring under which each Ordinary Share in Scott Wilson Holdings Ltd was exchanged for four Ordinary Shares in Scott Wilson Group plc. 52 weeks ended 52 weeks ended 29 April 2007 30 April 2006 £'000 £'000 Profit attributable to equity holders of the Company 9,986 12,527 Restructuring costs - 691 Loss relating to Basing View Investments Ltd - 780 Costs relating to Admission - 1,098 Gain arising on retirement benefit plan changes - (13,546) Amortisation of business combination intangibles 1,210 - Tax relating to non-recurring items, restructuring costs and amortisation of (363) 3,623 business combination intangibles Adjusted profit attributable to equity holders of the Company 10,833 5,173 Weighted average number of Ordinary Shares in issue (thousands) 72,047 32,203 Adjusted basic earnings per share (p) 15.04p 16.06p Weighted average number of Ordinary Shares in issue (thousands) 72,047 32,203 Dilutive effect of share options 2,418 1,025 Dilutive effect of business combination deferred consideration shares 360 - Diluted weighted average number of Ordinary Shares in issue (thousands) 74,825 33,228 Adjusted diluted earnings per share (p) 14.48p 15.57p No options over the Ordinary Shares of the Company have been awarded since 29 April 2007. This information is provided by RNS The company news service from the London Stock Exchange

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