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Woodspeen Training Group Plc (WSTP)

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Monday 12 November, 2012

Woodspeen Training Group Plc

Audited Results for 16 Month Period to 31 July ...


                                                               12 November 2012

                  WOODSPEEN TRAINING GROUP PLC (TICKER WSTP)                   

                         WOODSPEEN TRAINING GROUP PLC                          

                 ("Woodspeen" or "the Company" or "the Group")                 

              AUDITED RESULTS FOR 16 MONTH PERIOD TO 31 JULY 2012              

The financial information set out below is derived from the statutory financial
statements of Woodspeen Training Group plc for the period to 31 July 2012. The
statutory financial statements for the year ended 31 July 2012, upon which an
unqualified audit report has been given, have not yet been filed with the
Registrar of Companies.

CHAIRMAN'S STATEMENT

I am pleased to announce the results the Company for the 16 month period to 31
July 2012.

The Group has had a difficult time during the period under review and has
reported an operating loss, before amortisation of acquired intangible assets
and exceptional items, of £164,397 as against a profit of £867,328 in the
previous 12 months.

The operating environment remains extremely challenging. In the current
economic climate we, in common with other providers, are finding it difficult
to secure apprenticeships with employers for our young learners, which is now
an essential pre-cursor to our being able to deliver training to them. At the
same time the Government continues to put pressure on our margins, in both our
vocational and skills training businesses, by implementing its "more for less"
policy.

In response to market conditions the Board has taken firm action to re-align
the Group's cost base with its expected revenues. We have closed some of our
smaller centres and have either reduced, or are reducing, space in some of our
larger ones. We have also significantly reduced our headcount. The management
team stands ready to take further action if required.

The vocational training industry has faced and continues to face unprecedented
adverse conditions. Youth unemployment is at record levels but despite this
there are further Government expenditure cutbacks in the pipeline. All training
providers are suffering and many who are not as well placed as we are have
closed down with others likely to follow in the near future.

We start the new financial year in a lean condition. Whilst we currently expect
to break-even, we are realistic and recognise that trading conditions might
deteriorate further. Accordingly we have decided that it would be prudent to
make an impairment provision of £1.0 million against the carrying value of
goodwill on the Group's balance sheet.

We have also decided to restructure the Company's share capital to reduce the
nominal value of the Company's ordinary shares and eliminate the deficit in its
reserves. A circular containing further information about this proposal and
Notice of the Company's Annual General Meeting is being posted to shareholders
in the Company today.

Woodspeen is financially strong and currently has some £2.9 million of
available cash resources. These cash resources will enable us to bide our time
and to take advantage of opportunities to acquire other operators at sensible
valuations when they arise. We have a first class management team led by Si
Hussain who not only has a firm grip on the business but has a thorough
understanding of the industry within which it operates.

I am confident that Woodspeen will weather the current storm and will then go
on to prosper and I look forward to updating you on developments in the future.

Charles Prior
Chairman
12 November 2012


CHIEF EXECUTIVE'S REPORT

I am pleased to report to you on the Group's results for the 16 month period to
31 July 2012.

Business overview

The Group operates through two divisions, Vocational Training and Skills
Training.

Vocational Training programmes comprise pre-apprenticeship and apprenticeship
training, predominantly to younger learners (aged 16-18). Funding is primarily
through a direct contract held with the Skills Funding Agency (SFA).

Skills Training programmes comprise basic skills such as Maths, English, and
ICT predominantly delivered to unemployed adult learners. Funding for these
courses has been principally through an annually renewable subcontract with
LearnDirect Limited, who hold a direct contract with the SFA.

Government policies towards the funding of training programmes together with
the availability of suitable employment opportunities for learners are the key
drivers of the Group's long term success.

Performance during the period under review

Group operating profit before amortisation of acquired intangible assets of £
279,803 (2011 - £174,146) and impairment of goodwill of £1,000,000 (2011 - £
1,950,000) is as follows:

                                    16 Months ended                                 Year ended        
                                      31 July 2012                                 31 March 2011            
                                         Operating                                    Operating                
                            Revenue  Profit/(Loss)          Margin       Revenue  Profit/(Loss)          Margin
                                                                                                               
                                  £              £               %             £              £               %
                                                                                                               
Vocational Training       4,693,804        188,244            4.01     3,262,538        372,013           11.40
                                                                                                               
Skills Training           1,854,066         96,515            5.21     2,449,045        786,662           32.12
                                                                                                               
                      -------------- -------------- -------------- -------------- -------------- --------------
                                                                                                               
Total for segments        6,547,870        284,759            4.35     5,711,583      1,158,675            20.3
                                                                                                               
Group items:                                                                                                   
                                                                                                               
Unallocated central                       (449,156)                                    (291,347)               
costs                                                                                                          
                                                                                                               
                      -------------- -------------- -------------- -------------- -------------- --------------
                                                                                                               
                          6,547,870       (164,397)                    5,711,583        867,328                
                                                                                                               
                           =========      =========      =========      =========      =========      =========

The Group's performance during the period has been below the Board's
expectations in both the Vocational and the Skills Training sectors.

Vocational Training

The core expertise of the Group is in the recruitment, placement and training
of 16-18 year olds. Securing suitable vocational employment opportunities for
this age group has been more difficult in the period than had originally been
anticipated.

The number of apprenticeship learners enrolled on Woodspeen programmes can be
summarised as follows.

                                                      31 July     31 March    
                                                          2012       2011*    
                                                                              
16 - 18 learners                                           387         410*   
                                                                              
19+ (adult) learners                                       513         530*   
                                                                              
Total                                                      900         940*   

*includes BDTS learners (acquired on 6 April 2011) to enable comparison

On the demand side, adverse economic conditions have restricted the number of
employment opportunities that are available. On the supply side the combination
of an already large 16-24 NEET (Not in Employment, Education or Training)
population, additional school leavers at the end of the summer term and a
growing pool of unemployed graduates has made it extremely challenging to find
suitable employment opportunities for potential learners.

This is particularly so for young learners who typically require a greater
level of supervision and support from the employer. Despite the comparatively
low cost of taking on a young apprentice and the recent introduction by
Government of financial incentives to small and medium sized enterprises to
boost the creation of new apprenticeship opportunities, employment prospects
remain weak.

In response to these conditions the Group has invested significantly in
business development activity designed to strengthen the identification of
employment opportunities. It has also focussed on attracting more `work ready'
and fewer `harder to place' learners, to improve the chances of achieving a
successful matching of potential learners to the available employment
opportunities. These strategies have enabled the Group to broadly maintain
learner volumes but have caused a reduction in operating margins.

As it became clear that there was no prospect of an upturn in the short to
medium term, we took steps to re-align the Group's cost base. This included a
reduction in the number of permanent centres to five, which are Bradford,
Brighton, Bournemouth, Huddersfield and Wakefield.

Your Board currently expects flat trading performance over the next 12-24
months and remains ready to take further cost reduction measures should
conditions deteriorate further.

Skills Training

Performance in the Skills Training sector has been adversely impacted by the
cessation of highly profitable New Deal employment programmes in August 2011.
Operating margins from the delivery of Basic Skills programmes have been
adversely impacted by the greater than expected reductions in funding rates.

The Group's revenue in this sector can be analysed as follows.

                                                    16 Months            Year 
                                                        Ended           Ended 
                                                      31 July        31 March 
                                                         2012            2011 
                                                                              
                                                            £               £ 
                                                                              
Basic Skills Programmes                             1,162,053       1,167,986 
                                                                              
Employment and Other Programmes                       692,013       1,281,059 
                                                                              
                                               --------------- ---------------
                                                                              
                                                    1,854,066       2,449,045 
                                                                              
                                                     =========       =========

The rationale behind the decision not to engage with successor employment
programmes was explained in my previous reports.

The delivery of Basic Skills programmes was primarily funded through a
subcontract with LearnDirect and margins have been adversely impacted by a
larger than expected reduction in average funding rates during the period.

Following a detailed review of this sector, the Group is implementing a
strategy to both improve funding rates and to reduce the level of funding
bureaucracy. I am pleased to advise that we have been successful in securing
alternative funding of our Skills Programmes and anticipate the Group's
Programmes to be funded either substantially or entirely through a direct
contract during the current financial year.

Outlook

For the last two years the Government funded Vocational Training sector has
been buffeted by regulatory changes, economic uncertainty and funding
constraints.

As a consequence an increasing number of providers are failing or are
surrendering training contracts and it is clear that the sector is in for a
further period of rationalisation. Inevitably this will begin to result in more
realistic valuation expectations amongst potential vendors.

Whilst the Group cannot expect to be immune to changes in the market place, we
have taken the necessary steps to position the business in those areas where
funding remains most resilient. The financial strength of the business,
together with its highly capable management team, means that we are well placed
to exploit consolidation opportunities as they arise.

Si Hussain
Chief Executive
12 November 2012




WOODSPEEN TRAINING GROUP PLC

CONSOLIDATED INCOME STATEMENT

PERIOD ENDED 31 JULY 2012

                                           Note      16 Months            Year 
                                                         Ended           Ended 
                                                       31 July        31 March 
                                                          2012            2011 
                                                                               
                                                             £               £ 
                                                                               
Revenue                                       2      6,547,870       5,711,583 
                                                                               
Cost of sales                                       (4,487,702)     (3,509,021)
                                                                               
                                                --------------- ---------------
                                                                               
Gross profit                                         2,060,168       2,202,562 
                                                                               
Administrative expenses                             (3,504,368)     (3,459,380)
                                                                               
                                                --------------- ---------------
                                                                               
Loss from operations                          2     (1,444,200)     (1,256,818)
                                                                               
Analysed as:                                                                   
                                                                               
(Loss)/Profit from operations before                                           
amortisation                                                                   
                                                                               
and impairment intangible assets                      (164,397)        867,328 
                                                                               
Amortisation intangibles - customer                                            
contracts                                                                      
                                                                               
acquired on acquisition                               (279,803)       (174,146)
                                                                               
Impairment intangibles - Goodwill             3     (1,000,000)     (1,950,000)
                                                                               
                                                --------------- ---------------
                                                                               
                                                    (1,444,200)     (1,256,818)
                                                                               
                                                --------------- ---------------
                                                                               
Finance revenue                                         28,630           2,077 
                                                                               
Finance costs                                                -          (9,148)
                                                                               
                                                --------------- ---------------
                                                                               
Loss before taxation                                (1,415,570)     (1,263,889)
                                                                               
Tax credit/expense                            4         78,836        (194,289)
                                                                               
                                                --------------- ---------------
                                                                               
Loss for the period                                 (1,336,734)     (1,458,178)
                                                                               
                                                     ==========      ==========   

Earnings per share                                                          

Basic and diluted                                  5     (3.74)p     (6.14)p


CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

PERIOD ENDED 31 JULY 2012

There is no difference between the loss for the period shown and total
comprehensive expense.

Reconciliation of movements in total equity are given in the Statement of
changes in equity.



WOODSPEEN TRAINING GROUP PLC

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS AT 31 JULY 2012

                                                        31 July        31 March 
                                            Note           2012            2011 
                                                                                
                                                              £               £ 
                                                                                
Assets                                                                          
                                                                                
Non-current assets                                                              
                                                                                
Property, plant and equipment                           178,968         176,054 
                                                                                
Intangible assets                              7      1,689,819       2,319,981 
                                                                                
Deferred tax assets                                      20,804           3,033 
                                                                                
                                                 --------------- ---------------
                                                                                
                                                      1,889,591       2,499,068 
                                                                                
                                                 --------------- ---------------
                                                                                
Current assets                                                                  
                                                                                
Trade and other receivables                             747,434       1,101,800 
                                                                                
Cash and short term deposits                          2,927,056       3,763,321 
                                                                                
                                                 --------------- ---------------
                                                                                
                                                      3,674,490       4,865,121 
                                                                                
                                                 --------------- ---------------
                                                                                
Total assets                                          5,564,081       7,364,189 
                                                                                
                                                 --------------- ---------------
                                                                                
Liabilities                                                                     
                                                                                
Current liabilities                                                             
                                                                                
Trade and other payables                                714,331         920,171 
                                                                                
Deferred revenue                                          9,523          40,318 
                                                                                
Current tax liabilities                                  10,557         237,780 
                                                                                
Provisions                                               94,817         203,418 
                                                                                
                                                 --------------- ---------------
                                                                                
                                                        829,228       1,401,687 
                                                                                
                                                 --------------- ---------------
                                                                                
Non-current liabilities                                                         
                                                                                
Provisions                                               10,550           7,694 
                                                                                
Deferred tax liabilities                                 43,853          91,416 
                                                                                
                                                 --------------- ---------------
                                                                                
                                                         54,403          99,110 
                                                                                
                                                 --------------- ---------------
                                                                                
Total liabilities                                       883,631       1,500,797 
                                                                                
                                                 --------------- ---------------
                                                                                
Net Assets                                            4,680,450       5,863,392 
                                                                                
                                                      ==========      ==========
                                                                                
Equity                                                                          
                                                                                
Capital and reserves attributable to                                            
equity holders of the Company                                                   
                                                                                
Issued share capital                           9      3,578,620       3,528,620 
                                                                                
Share premium reserve                                 2,997,637       2,997,637 
                                                                                
Merger reserve                                          376,000         336,000 
                                                                                
Retained earnings                                    (2,271,807)       (998,865)
                                                                                
                                                 --------------- ---------------
                                                                                
Total Equity                                          4,680,450       5,863,392 
                                                                                
                                                      ==========      ==========




WOODSPEEN TRAINING GROUP PLC

CONSOLIDATED STATEMENT OF CASH FLOWS

PERIOD ENDED 31 JULY 2012

                                            Note      16 Months            Year 
                                                          Ended           Ended 
                                                        31 July        31 March 
                                                           2012            2011 
                                                                                
                                                              £               £ 
                                                                                
Cash flows from operating activities                                            
                                                                                
Loss before taxation                                 (1,415,570)     (1,263,889)
                                                                                
Adjustments for:                                                                
                                                                                
Impairment goodwill                            3      1,000,000       1,950,000 
                                                                                
Depreciation of property, plant and                      72,074          48,096 
equipment                                                                       
                                                                                
Depreciation of leasehold improvements                   55,378          63,240 
                                                                                
Loss on disposal of property, plant and                  32,802           1,828 
equipment                                                                       
                                                                                
Amortisation of intangibles - customer                                          
contracts                                                                       
                                                                                
acquired on acquisition                                 279,803         174,146 
                                                                                
Amortisation of intangibles - software                    6,636           4,422 
                                                                                
Loss on disposal of intangibles -                         2,371               - 
software                                                                        
                                                                                
Share based payment expense                              63,792          17,877 
                                                                                
Finance income                                          (28,611)         (2,077)
                                                                                
Finance costs                                                 -           9,148 
                                                                                
Decrease/(Increase) in trade and other                  470,025        (160,797)
receivables                                                                     
                                                                                
(Decrease)/Increase in trade and other                 (261,174)        387,649 
payables                                                                        
                                                                                
(Decrease)/Increase in deferred revenue                 (30,795)         27,057 
                                                                                
Decrease in provisions                                 (166,363)        (38,694)
                                                                                
                                                 --------------- ---------------
                                                                                
Cash generated by operations                             80,368       1,218,006 
                                                                                
Income taxes paid                                      (336,220)       (272,105)
                                                                                
                                                 --------------- ---------------
                                                                                
Cash flows (absorbed by)/generated from                (255,852)        945,901 
operating activities                                                            
                                                                                
                                                 --------------- ---------------
                                                                                
Cash flows from investing activities                                            
                                                                                
Acquisitions - Consideration                   8     (1,817,433)              - 
                                                                                
Acquisitions - Cash acquired                   8      1,330,998               - 
                                                                                
Purchase of plant and equipment                        (101,148)        (80,971)
                                                                                
Purchase of intangibles - software                      (17,402)           (886)
                                                                                
Interest received                                        24,572           2,077 
                                                                                
                                                 --------------- ---------------
                                                                                
Net cash used in investing activities                  (580,413)        (79,780)
                                                                                
                                                 --------------- ---------------
                                                                                
Cash flows from financing activities                                            
                                                                                
Proceeds from issue of shares                                 -       2,657,916 
                                                                                
Expenses in connection with share issues                      -         (91,481)
                                                                                
Repayment of loan notes                                       -        (350,000)
                                                                                
Interest paid                                                 -         (12,543)
                                                                                
                                                 --------------- ---------------
                                                                                
Net cash used in financing activities                         -       2,203,892 
                                                                                
                                                 --------------- ---------------
                                                                                
(Decrease)/Increase in cash and cash                   (836,265)      3,070,013 
equivalents                                                                     
                                                                                
Cash and cash equivalents at start of                 3,763,321         693,308 
period                                                                          
                                                                                
                                                 --------------- ---------------
                                                                                
Cash and cash equivalents at end of                   2,927,056       3,763,321 
period                                                                          
                                                                                
                                                      ==========      ==========




WOODSPEEN TRAINING GROUP PLC

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

AS AT 31 JULY 2012

                                                                                                  Total 
                                 Issued           Share                                          Share- 
                                  Share         Premium          Merger        Retained         Holders 
                                Capital         Account          Reserve       Earnings          Equity 
                                                                                                        
                                      £               £               £               £               £ 
                                                                                                        
At 1 April 2010               2,052,000       1,907,822         336,000         441,436       4,737,258 
                                                                                                        
Transactions with                                                                                       
owners:                                                                                                 
                                                                                                        
Placing of shares in          1,476,620       1,181,296               -                -      2,657,916 
period                                                                                                  
                                                                                                        
Expenses of share issues              -         (91,481)              -                -        (91,481)
                                                                                                        
Employee share option                                                                                   
schemes:                                                                                                
                                                                                                        
- Value of share options              -               -               -          17,877          17,877 
granted                                                                                                 
                                                                                                        
Total Comprehensive                   -               -               -      (1,458,178)     (1,458,178)
expense                                                                                                 
                                                                                                        
                         --------------- --------------- --------------- --------------- ---------------
                                                                                                        
At 31 March 2011              3,528,620       2,997,637         336,000        (998,865)      5,863,392 
                                                                                                        
                               =========       =========       =========       =========       =========
                                                                                                        
At 1 April 2011               3,528,620        2,997,637        336,000        (998,865)      5,863,392 
                                                                                                        
Transactions with                                                                                       
owners:                                                                                                 
                                                                                                        
Allotted on acquisition          50,000               -          40,000                -         90,000 
of BDTS Ltd                                                                                             
                                                                                                        
Employee share option                                                                                   
schemes:                                                                                                
                                                                                                        
- Value of share options              -               -               -          63,792          63,792 
granted                                                                                                 
                                                                                                        
Total comprehensive                   -               -               -      (1,336,734)     (1,336,734)
expense                                                                                                 
                                                                                                        
                         --------------- --------------- --------------- --------------- ---------------
                                                                                                        
At 31 July 2012               3,578,620       2,997,637         376,000      (2,271,807)      4,680,450 
                                                                                                        
                               =========       =========       =========       =========       =========




WOODSPEEN TRAINING GROUP PLC

NOTES TO ANNOUNCEMENT OF AUDITED RESULTS

FOR THE PERIOD ENDED 31 JULY 2012

1 Basis of preparation

The financial statements of the Company for the period ended 31 July 2012
comprise the consolidated financial statements of the Company and its
subsidiaries (together referred to as the Group).

The consolidated financial statements of the Group have been prepared under
International Financial Reporting Standards ("IFRS") as adopted by the European
Union. The results in this announcement have been prepared in accordance with
IFRS applicable at 31 July 2012 and have been taken from the Group's Financial
Statements. This financial information set out above does not constitute
statutory accounts as defined in Section 435 of the Companies Act 2006.

The Group's statutory financial statements for the period ended 31 July 2012,
upon which an unqualified report has been given, have not yet been filed with
the Registrar of Companies.

The financial information for the year to 31 March 2011 is derived from the
statutory accounts for that period which have been delivered to the Registrar
of Companies

2 Segment information

The Chief Operating Decision Maker has been identified as the Chief Executive.
The Chief Executive reviews the Group's internal reporting in order to assess
performance and allocate resources. Management has determined the operating
segments based on reports used by the Board.

The Chief Executive assesses the performance of operating segments based on
operating profit before amortisation of acquired intangible assets, interest
and tax. Information presented to the Chief Executive is measured in a manner
consistent with that in the Financial Statements.

The performance of operating segments reviewed by the Chief Executive does not
include any allocation of corporate and central costs. Corporate and central
costs, although not an operating segment as defined by IFRS8 are reviewed by
the Chief Executive and shown as Group items in the table below.

The principal activity of the Group is Government sponsored training,
assessment and related services. The Chief Executive considers the Group's
business through two reporting segments based on principal activity:

     Vocational Training (Apprenticeships, Foundation Learning and other
     vocational training programmes); and Skills Training (Skills for Life
     and other employability training programmes).

                                            16 Months ended                    Year ended
                                               31 July 2012                 31 March 2011
                                                  Operating        Revenue      Operating
                                     Revenue  Profit/(Loss)        Revenue  Profit/(Loss)
                                                                                         
                                          £              £              £              £ 
                                                                                         
Vocational Training               4,693,804        188,244      3,262,538        372,013 
                                                                                         
Skills Training                   1,854,066          96,515     2,449,045        786,662 
                                                                                         
                              -------------- -------------- -------------- --------------
                                                                                         
Total for segments                6,547,870        284,759      5,711,583      1,158,675 
                                                                                         
Group items:                                                                             
                                                                                         
Unallocated central costs                         (449,156)                     (291,347)
                                                                                         
                                             --------------                --------------
                                                                                         
                                                  (164,397)                      867,328 
                                                                                         
Amortisation charge on                                                                   
acquired                                                                                 
                                                                                         
intangible assets                                 (279,803)                     (174,146)
                                                                                         
Impairment of goodwill                          (1,000,000)                   (1,950,000)
                                                                                         
                              -------------- -------------- -------------- --------------
                                                                                         
Total for Group                   6,547,870     (1,444,200)     5,711,583     (1,256,818)
                                                                                         
                                   =========      =========      =========      =========

The reconciliation, by operating segment of the profit/(loss) reported to the
Chief Decision Maker to operating profit shown in the financial statements is
as follows:

                                            16 Months ended 31 July 2012                                   
                                                                                          
                                 Reported    Amortisation                                 
                                Segmental     on Acquired                       Segmental 
                                Operating      Intangible      Impairment       Operating 
                            Profit/(Loss)          Assets     of Goodwill   Profit/(Loss) 
                                                                                          
                                        £               £               £               £ 
                                                                                          
Vocational Training               188,244        (279,803)     (1,000,000)     (1,091,559)
                                                                                          
Skills Training                    96,515                -               -         96,515 
                                                                                          
                           --------------- --------------- --------------- ---------------
                                                                                          
Total for segments                284,759        (279,803)     (1,000,000)       (995,044)
                                                                                          
Group items:                                                                              
                                                                                          
Unallocated central costs                                                        (449,156)
                                                                                          
                           --------------- --------------- --------------- ---------------
                                                                                          
Total for Group                                                                (1,444,200)
                                                                                          
                                 =========       =========       =========       =========


                                             Year ended 31 March 2011                                       
                                                                                          
                                 Reported    Amortisation                                 
                                Segmental     on Acquired                       Segmental 
                                Operating      Intangible      Impairment       Operating 
                            Profit/(Loss)          Assets     of Goodwill   Profit/(Loss) 
                                                                                          
                                        £               £               £               £ 
                                                                                          
Vocational Training               372,013        (157,840)       (400,000)       (185,827)
                                                                                          
Skills Training                   786,662         (16,306)     (1,550,000)       (779,644)
                                                                                          
                           --------------- --------------- --------------- ---------------
                                                                                          
Total for segments              1,158,675        (174,146)     (1,950,000)       (965,471)
                                                                                          
Group items:                                                                              
                                                                                          
Unallocated central costs                                                        (291,347)
                                                                                          
                           --------------- --------------- --------------- ---------------
                                                                                          
Total for Group                                                                (1,256,818)
                                                                                          
                                 =========       =========       =========       =========

All income is derived from the United Kingdom.

The Government, through various funding agencies and bodies, directly and
through sub-contacting arrangements entered into by the Group, is the Group's
single largest customer and accounts for £6,327,000 (97%) of revenue spread
across several contracts. The revenue is reported within both Vocational and
Skills Training operating segments.

No other single customer accounts for than 10% of Group revenue.

Given the nature of the Group's business, the Chief Executive does not receive
or review balance sheet information for operating segments.

3 Impairment of goodwill

                                                     16 Months        Year 
                                                         Ended       Ended 
                                                       31 July    31 March 
                                                          2012        2011 
                                                                           
                                                             £           £ 
                                                                           
Recognised in arriving at Group operating profit                           
                                                                           
from continuing operations:                                                
                                                                           
Impairment of goodwill                               1,000,000   1,950,000 
                                                                           
                                                      =========   =========

As a result of the annual review of the carrying value of goodwill as at 31
July 2012, the Group determined that an impairment charge of £1,000,000 was
appropriate for the reasons given below.

Vocational Training: the vocational training industry has faced and continues
to face challenging conditions in the current climate. Securing employment for
young learners, which is a pre-cursor to providers delivering apprenticeship
training, is an industry wide challenge. At the same time margins are being
adversely affected by the Government's "more for less" policy. With no evidence
of improvement in trading conditions and the recognition that conditions could
deteriorate further the Group has made an impairment of £1,000,000 against the
carrying value of goodwill for Vocational Training.

As a result of the annual review of the carrying value of goodwill as at 31
March 2011, the Group determined that an impairment charge of £1,950,000 was
appropriate for the reasons given below. Of this sum - £1,550,000 was
attributable to Skills Training and £400,000 was attributable to Vocational
Training.

Skills Training: the Government's flagship welfare to work programme - the
`Work Programme' - replaced the welfare to work initiatives in which the Group
participated (New Deal and Flexible New Deal). The format and structure of the
Work Programme is different to New Deal and the Group determined that it would
not be in the best interests of the business to be directly involved in the
delivery of the Work Programme. New Deal represented a significant proportion
of Skills Training and the cessation of this income stream resulted in the
impairment of goodwill.

Vocational Training: the write down reflected the disappointing performance of
S&S Training Services Limited since its acquisition in February 2010 and the
lower future growth potential of that business. Projections did not support the
carrying value of the goodwill that arose on the acquisition of S&S Training
Services Limited and, consequently, it was written off.


4 Income tax expense

(a) Tax on profit for the period

                                                    16 Months             Year 
                                                        Ended            Ended 
                                                      31 July         31 March 
Tax charged in the income statement                      2012             2011 
                                                                               
                                                            £                £ 
                                                                               
Current tax:                                                                   
                                                                               
UK corporation tax on profits for the year             53,652          241,055 
                                                                               
Adjustment for (over)/under provision in                1,023           (1,683)
prior periods                                                                  
                                                                               
                                              ---------------- ----------------
                                                                               
Total current tax                                      54,675          239,372 
                                                                               
                                              ---------------- ----------------
                                                                               
Deferred tax                                                                   
                                                                               
Origination and reversal of temporary                (125,044)         (41,829)
differences                                                                    
                                                                               
Deferred tax income resulting from reduction           (8,467)          (3,254)
in tax rate                                                                    
                                                                               
                                              ---------------- ----------------
                                                                               
Total deferred tax                                   (133,511)         (45,083)
                                                                               
                                              ---------------- ----------------
                                                                               
Tax charge in the income statement                    (78,836)         194,289 
                                                                               
                                                     =========        =========


(b) Reconciliation of the total tax charge

The reasons for the difference between the actual tax charge for the period and
the standard rate of corporation tax in the UK applied to profits for the
period are as follows:

                                                    16 Months             Year 
                                                        Ended            Ended 
                                                      31 July         31 March 
                                                         2012             2011 
                                                                               
                                                            £                £ 
                                                                               
Accounting loss before tax                         (1,415,570)      (1,263,889)
                                                                               
Expected tax charge based on the standard                                      
rate of                                                                        
                                                                               
corporation tax in the UK for the period of          (360,971)        (353,889)
25.5% (2011 - 28%)                                                             
                                                                               
Effects of:                                                                    
                                                                               
Marginal relief                                          (458)          (6,197)
                                                                               
Share based payments relief                             3,033           (3,033)
                                                                               
Non-deductible expenses for tax purposes                                       
                                                                               
Impairment of goodwill                                255,000          546,000 
                                                                               
Other non- deductible expenses                         21,888            4,229 
                                                                               
Share based payments                                   16,267            3,033 
                                                                               
Tax losses for which no deferred tax asset is           8,288                -
recognised                                                                     
                                                                               
Other items                                           (14,439)           9,083 
                                                                               
Adjustment for under/(over) provision for               1,023           (1,683)
current tax in previous periods                                                
                                                                               
Reduction in opening deferred taxes resulting          (8,467)          (3,254)
from reduction in tax rate                                                     
                                                                               
                                              ---------------- ----------------
                                                                               
Total tax (credit)/charge for the period              (78,836)         194,289 
                                                                               
                                                     =========        =========


5 Earnings per share

Basic earnings per share are calculated by dividing the profit attributable to
ordinary shareholders by the weighted number of shares in issue during the
period.

Diluted earnings per share are calculated by adjusting the weighted average
number of ordinary shares for the conversion of all dilutive potential ordinary
shares. As at 31 July 2012 and 31 March 2011 diluted earnings per share is the
same as basic earnings per share as options granted under Employee Share
Schemes were anti-dilutive.

As at 31 July 2012 diluted earnings per share based on the adjusted loss on
ordinary activities after tax is the same as adjusted basic earnings per share
as options granted under Employee Share Schemes were anti-dilutive. As at 31
March 2011 diluted earnings per share based upon the adjusted profit on
ordinary activities after tax differs from adjusted basic earnings per share as
options granted under Employee Share Schemes were dilutive.

For the better understanding of the underlying trading performance, the
directors feel it appropriate to disclose earnings per share before and after
adjusting for the amortisation of intangible assets acquired on acquisition of
subsidiaries and impairment of goodwill.


                                                    16 Months             Year 
                                                        Ended            Ended 
                                                      31 July         31 March 
                                                         2012             2011 
                                                                               
Earnings                                                    £                £ 
                                                                               
Earnings attributable to ordinary                  (1,336,734)      (1,458,178)
shareholders                                                                   
                                                                               
Amortisation of acquired intangible assets            279,803          174,146 
                                                                               
Taxation impact amortisation of acquired              (78,469)         (52,856)
intangible assets                                                              
                                                                               
Impairment of goodwill                              1,000,000        1,950,000 
                                                                               
                                              ---------------- ----------------
                                                                               
Adjusted (loss)/profit on ordinary activities        (135,400)         613,112 
after tax                                                                      
                                                                               
                                                     =========        =========
                                                                               
Number of shares                                       Number           Number 
                                                                               
Weighted average number of shares for                                          
                                                                               
basic and diluted earnings per share               35,781,081       23,743,293 
                                                                               
Potential dilutive effect of employee share                 -          119,648 
schemes on adjusted profit                                                     
                                                                               
                                              ---------------- ----------------
                                                                               
Weighted average number of shares for                                          
                                                                               
adjusted diluted earnings per share                35,781,081       23,862,941 
                                                                               
                                                     =========        =========


                                                     16 Months        Year 
                                                         Ended       Ended 
                                                       31 July    31 March 
                                                          2012        2011 
                                                                           
                                                         Pence       Pence 
                                                                           
Earnings per share                                                         
                                                                           
Basic earnings per share                                 (3.74)      (6.14)
                                                                           
Diluted earnings per share                               (3.74)      (6.14)
                                                                           
Adjusted earnings per share                                                
                                                                           
Adjusted basic earnings per share                        (0.38)       2.58 
                                                                           
Adjusted diluted earnings per share                      (0.38)       2.57 


The calculation of adjusted basic earnings per share is set out below:

Earnings per share                                      Pence            Pence 
                                                                               
Basic earnings per share                                (3.74)           (6.14)
                                                                               
Amortisation of acquired intangible assets               0.78             0.73 
                                                                               
Taxation impact amortisation of acquired                (0.22)           (0.22)
intangible assets                                                              
                                                                               
Impairment of goodwill                                   2.80             8.21 
                                                                               
                                              ---------------- ----------------
                                                                               
Adjusted basic earnings per share (pence)               (0.38)            2.58 
                                                                               
                                                     =========        =========


6 Dividends

The directors do not recommend payment of a dividend.


7 Intangible assets

                                             Customer                               
                              Goodwill      Contracts       Software          Total 
                                                                                    
                                     £              £              £              £ 
                                                                                    
Cost                                                                                
                                                                                    
At 1 April 2010              4,046,702        590,000         18,915      4,655,617 
                                                                                    
Additions                            -               -           886            886 
                                                                                    
                         -------------- -------------- -------------- --------------
                                                                                    
At 31 March 2011             4,046,702        590,000         19,801      4,656,503 
                                                                                    
Acquired through               381,246        260,000              -        641,246 
business combinations                                                               
                                                                                    
Additions                            -              -         17,402         17,402 
                                                                                    
Disposals                            -              -         (4,818)        (4,818)
                                                                                    
                         -------------- -------------- -------------- --------------
                                                                                    
At 31 July 2012              4,427,948        850,000         32,385      5,310,333 
                                                                                    
                              =========      =========      =========      =========

Amortisation and                                                                    
impairment                                                                          
                                                                                    
At 1 April 2010                      -        205,384          2,570        207,954 
                                                                                    
Amortisation charge for              -        174,146          4,422        178,568 
the period                                                                          
                                                                                    
Impairment charge for        1,950,000              -              -      1,950,000 
the period                                                                          
                                                                                    
                         -------------- -------------- -------------- --------------
                                                                                    
At 31 March 2011             1,950,000        379,530          6,992      2,336,522 
                                                                                    
Amortisation charge for              -        279,803          6,636        286,439 
the period                                                                          
                                                                                    
Impairment charge for        1,000,000              -              -      1,000,000 
the period                                                                          
                                                                                    
Disposals                            -              -         (2,447)        (2,447)
                                                                                    
                         -------------- -------------- -------------- --------------
                                                                                    
At 31 July 2012              2,950,000        659,333         11,181      3,620,514 
                                                                                    
                              =========      =========      =========     =========


Net book value                                                             
                                                                           
At 31 July 2012                   1,477,948   190,667    21,204  1,689,819 
                                                                           
                                   ========= ========= =========  =========
                                                                           
At 31 March 2011                  2,096,702   210,470    12,809  2,319,981 
                                                                           
                                   ========= ========= =========  =========
                                                                           
At 1 April 2010                   4,046,702   384,616    16,345  4,447,663 
                                                                           
                                   ========= ========= =========  =========


The carrying amount of goodwill is allocated to cash generating units (CGUs) as
follows:

                                                      31 July         31 March
                                                         2012             2011
                                                                              
                                                            £                £
                                                                              
Vocational Training                                   664,970       1,283,724 
                                                                              
Skills Training                                       812,978         812,978 
                                                                              
                                               --------------- ---------------
                                                                              
                                                    1,477,948       2,096,702 
                                                                              
                                                    ==========      ==========


Impairment of goodwill and intangible assets

The total amount of goodwill acquired through business combinations and
recognised at 31 July 2012 is allocated for impairment testing to two cash
generating units which are also the operating and reportable segments. This
represents the lowest level within the Group at which goodwill is monitored for
internal management purposes.

The carrying value of goodwill is compared with the asset's recoverable amount,
based on value in use, on an annual basis to determine whether impairment
exists. The value in use calculation was performed using pre-tax cash flow
projections based on financial plans approved by management for the two next
years. Cash flows beyond the budgeted period are extrapolated using a 1% growth
rate. These future cash flows are discounted by an appropriate risk adjusted
pre-tax discount rate (17.5%) to give the value in use.

Management believe that the assumptions used to determine value in use are
appropriate and reasonable.

The same approach for calculating the recoverable value of goodwill is used for
both cash generating units.

Following the annual impairment test as at 31 July 2012, a charge of £1,000,000
has been recognised in the income statement in respect of goodwill impairment.

Vocational Training: the vocational training industry has faced and continues
to face challenging conditions in the current climate. Securing employment for
young learners, which is a pre-cursor to providers delivering apprenticeship
training, is an industry wide challenge. At the same time margins are being
adversely affected by the Government's "more for less" policy. With no evidence
of improvement in trading conditions and the recognition that conditions could
deteriorate further the Group has made an impairment of £1,000,000 against the
carrying value of goodwill for Vocational Training.

Key assumptions

The calculation of value in use is most sensitive to the following assumptions:

Budget or base year profit - the value in use calculation assumes the budget
for the year is achieved;

Growth of market and market share - the value in use calculation assumes a
modest growth (1%) and that the

Group will retain rather than increase its market share; and

Discount rate - cash flows are discounted using the Group's nominal pre-tax
discount rate based on the Group's

weighted average cost of capital, adjusted to reflect management's estimate of
the risk profile for the business.

The value in use calculation assumes that the Group's programmes will continue
to be supported by the Government and attract funding.

Sensitivity to changes in assumptions

Impairment analysis requires the use of certain future market assumptions and
discount factors, which are subjective in nature. Estimated values can be
affected by many factors beyond the Group's control such as business and
economic trends, Government funding and regulation etc. Changes in
circumstances affecting assumptions used could have a significant impact on the
value in use potentially resulting in an impairment write down.

Management has considered the impact of budget profit not being achieved in the
base year; a reduction in the growth rate; and the impact of an increase in the
pre-tax discount rate in the value in use calculation for impairment testing.

For Vocational Training, following the impairment of goodwill, budget or base
year profit could fall by 20%; or the extrapolated growth rate of 1% could be
negative 2%; or the pre-tax discount rate could increase to 21.5% before the
value in use would be close to the carrying value.

For Skills Training budget or base year profit could fall 35%; or the
extrapolated growth rate of 1% could be negative 1%; or the pre-tax discount
rate could increase to 21.5% before the value in use would be close to the
carrying value.


8 Acquisition BDTS Limited

On 6 April 2011 the Company acquired 100% of the issued share capital of BDTS
Limited which provides Government sponsored vocational training. The
acquisition was satisfied by way of cash consideration and the issue of 500,000
ordinary shares of 10p.

The cash consideration was paid from existing cash resources.

The consideration shares were valued at fair value of 18p per share at date of
acquisition.

The transaction has been accounted for by the purchase method of accounting.

The intangible assets identified on the acquisition of BDTS Limited represent
the Directors' estimate of the fair value of customer contracts at acquisition.
Residual goodwill represents items that cannot be individually separated and
measured due to their natures. This includes the value associated with BDTS
Limited's workforce and delivery model, systems and processes.

Fair Values

The book and fair values of the assets and liabilities acquired were as
follows:

                                                        Fair Value                 
                                        Book Value      Adjustments     Fair Value 
                                                                                   
                                                 £               £               £ 
                                                                                   
Intangible assets                                -         260,000         260,000 
                                                                                   
Tangible assets                             13,686          (7,042)          6,644 
                                                                                   
Trade and other receivables                105,521                -        105,521 
                                                                                   
Bank balances and cash                   1,330,998                -      1,330,998 
                                                                                   
Trade and other payables                   (48,139)         (9,113)        (57,252)
                                                                                   
Provisions                                       -          (5,240)         (5,240)
                                                                                   
Current tax liabilities                    (39,341)         (6,966)        (46,307)
                                                                                   
Deferred tax liabilities                    (1,945)        (66,232)        (68,177)
                                                                                   
                                    --------------- --------------- ---------------
                                                                                   
                                         1,360,780         165,407       1,526,187 
                                                                                   
Goodwill                                                                   381,246 
                                                                                   
                                    --------------- --------------- ---------------
                                                                                   
                                                                         1,907,433 
                                                                                   
                                          =========       =========       =========

Satisfied by:                                                                £ 
                                                                               
Cash                                                                 1,817,433 
                                                                               
Shares                                                                  90,000 
                                                                               
                                                                ---------------
                                                                               
                                                                     1,907,433 
                                                                               
                                                                      =========


The outflow of cash resulting from the acquisition is as follows:

                                                                              £
                                                                               
Cash                                                                  1,817,433
                                                                               
Acquisition costs - expensed through profit & loss                       20,548
                                                                               
Cash and cash equivalents acquired                                  (1,330,998)
                                                                               
                                                                ---------------
                                                                               
                                                                        506,983
                                                                               
                                                                     ==========

As part of the group restructure that took place on 31 July 2011, the trade and
assets of BDTS Limited were transferred to a fellow subsidiary undertaking -
Woodspeen Training Limited - and the company ceased to trade. It is impractical
for the Group to disclose the revenue and profits attributable to the
activities of the acquired business for either the period from acquisition to
31 July 2012 or for the current reporting period as though the acquisition date
had been at the beginning of the reporting period.

The group restructure transferred the trade and assets of BDTS Limited, Futures
Training Centres Limited and S&S Training Services Limited to Woodspeen
Training Limited. Following the transfer of businesses; contracts were
amalgamated; staff merged into two teams - Vocational and Skills; and property
resources shared so that it is impractical to identify revenue and costs
attributable to the business acquired.


9 Share capital

The Company has one class of Ordinary shares which carry equal voting rights
and no right to fixed income.

                                                        Number            £
                                                                           
Authorised                                                                 
                                                                           
Ordinary shares of 10p each                        100,000,000  10,000,000 
                                                                           
                                                     ==========  ==========

                                                       Number             £
                                                                              
Allotted, called up and fully paid                                            
                                                                              
Ordinary shares of 10p each                                                   
                                                                              
At 1 April 2010                                    20,520,000       2,052,000 
                                                                              
Placing of shares 7 December 2010                   7,560,000         756,000 
                                                                              
Placing of shares 14 February 2011                  5,464,538         546,454 
                                                                              
Placing of shares 28 February 2011                  1,741,666         174,166 
                                                                              
                                               --------------- ---------------
                                                                              
As at 31 March 2011                                35,286,204       3,528,620 
                                                                              
Allotted 6 April 2011 on acquisition of BDTS          500,000          50,000 
Limited                                                                       
                                                                              
                                               --------------- ---------------
                                                                              
At 31 July 2012                                    35,786,204       3,578,620 
                                                                              
                                                    ==========      ==========

The Financial Statements for the period to 31 July 2012 will be posted to
shareholders shortly.

Copies of the Financial Statements may be obtained from the Company Secretary,
Woodspeen Training Group plc, 32 Wingate Road, Hammersmith, London W6 0UR, the
Company's website or from the ISDX Growth Market website.

The Parent Company's Annual General Meeting will be held at the offices of
Memery Crystal LLP, 44 Southampton Buildings, London WC2A 1AY on 11 December
2012 at 10am.

The directors of Woodspeen Training Group plc take responsibility for this
announcement.

Contacts:


Woodspeen Training Group plc
Si Hussain                        0786 283 7437
Lynn Chandler                     07932 753 799


Corporate Adviser
St Helens Capital Partners LLP    020 7368 6959
Oliver Cooke
Mark Anwyl

a d v e r t i s e m e n t