Investors

Annual Report and Accounts 2006/2007

The principal activity of the company during the year was the provision of quality Information Technology, Communications and e-business Human Capital solutions to Blue Chip Clients both Nationally and Internationally.

IT Human Resources plc's core business is the provision of contract staff resourcing, permanent recruitment and retained search recruitment to Blue Clients in some 20+ countries worldwide. ITHR Consulting Ltd (a wholly owned subsidiary) provides consulting services focussed on project and programme management and delivery, predominantly to the Telecommunications sector.

IT Human Resources plc is a proudly independent organisation, wholly funded, owned and managed by the Directors and Employees of the Company. All growth since our inception in 1999 has been achieved organically and has been driven by our quality ethos in all of our business dealings; be they with our customers, candidates or suppliers and by our desire to succeed in a spirit of true partnership.

Our aim is to innovate our marketplace with total professionalism whilst being flexible enough through our independence not only to meet but exceed our Clients' expectations.

Now in our ninth year of trading it is my pleasure to present IT Human Resources plc's 8th annual set of accounts for the year ended 31st March 2007, this year consolidated to reflect the continuing operations of our subsidiary company - ITHR Consulting Ltd.

As predicted in my last review ITHR Consulting was a major focus last year and was heavily invested in - both in people resource and financially to enable the company to formally operate as a trading entity in it's own right, instead of merely operating as part of the recruitment business as it had existed previously. This coming year we will further invest in the Consulting business and brand in terms of sales and administrative resources, additional marketing collateral, deploying the company's own separately branded web site and further developing and refining the organisation's core competencies and product proposition ready to take it to a wider Client audience. ITHR Consulting revenues grew some 50% during the year; although not previously reported in a separately legal entity.

Across the group revenues were some 11% down in the year; the first year of negative growth in our history. Whilst this was somewhat disappointing in a market which remains robust and buoyant in terms of overall industry growth it was not wholly unexpected due to the internal structure changes initiated in FY2005/06 finally filtering through to the year's revenue stream. Likewise there will be a lead time for our revised strategy of that period to filter through as increased revenue - the nature of our business. Similarly there was a corresponding dip in net profits. A proportion of this can obviously be attributed to the reduction in revenues however a large percentage can be attributed to our heavy investment during the year in training our staff - and in particular our future star revenue earners. Whilst there is no "quick return" from this training investment we are starting to realize some up-side from that investment and expect to see that filter through as increased revenues in FY2007/08, and even more so in FY2008/09.

Additionally in FY2007/08 we will be committing in excess of £300k to a second "ITHR Graduate Sales Training Academy". This, we believe, is the key to our future, long term sustainable organic growth. As a wholly owned and independent organisation we are able to vision our future and commit investment funds in that vision which will achieve our long term objectives, without the pressure of outside shareholders demanding near "instant returns". It is from these investments that we are totally confident that in the medium and long term IT Human Resources plc will again return a positive and organic growth performance; sitting alongside an established consulting practice founded on expert core competencies and exceptionally positioned to contribute increasing revenues to overall group turnover and operating profit.

As a summary for the year I would best describe it as a "re-organisation, holding and building" year and whilst headline revenues were lower we have invested in, and re-positioned both operating businesses to facilitate future growth. The new task ahead is to realize the synergies and harness the growth potential of two very different, yet complementary IT Human Capital solution organisations - a challenge to relish in the coming year.

Sean Gallagher
Managing Director