Annual Report and Accounts 2005/2006

IT Human Resources plc's core business is the provision of quality Information Technology, Communications and e-business Human Capital solutions to Blue Chip Clients both Nationally and Internationally. This past year ITHR has provided contract resourcing, permanent recruitment and Consulting Services to Clients in some 20+ countries worldwide. Additionally with the creation of ITHR Consulting Ltd (a wholly owned subsidiary) we provide consulting services focussed on project and programme management and delivery, predominantly to the Telecommunications sector. ITHR Consulting will be a focus for growth during the coming years as we invest in this separately branded company.

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.

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.

Now in our eighth year of trading it is my pleasure to present IT Human Resources plc's 7th annual set of accounts for the year ended 31st March 2006.

FY2005/06, whilst being another record breaking year for ITHR, was without a doubt one of the most challenging in our seven year history. Like most young, but rapidly expanding companies some difficult decisions needed to be made to ensure ITHR’s next level of growth and corporate maturity. The net effect of those decisions was that an internal re-organisation was implemented which resulted in the loss of two key sales individuals and the initiation of a new strategic plan for growth. Consequently our turnover growth of 11.5% for the year fell somewhat short of our year start goals and aspirations.

The main thrust of our strategy moving forward - underpinned by a strong balance sheet - is a major investment in growing our internal sales teams at all levels and in particular a move to “train for the future” with a major investment in the creation of an ITHR “Graduate Training Academy”. In total we have set aside in FY2006/07 a staff training budget in excess of £100,000 to train our team for the future. This will cover all levels of staff from back-office support and trainee sales consultants through to the directors of the Company who are undertaking studies at the IoD to qualify as Chartered Directors.

In the financial year covering this set of accounts a major investment was also made in replacing our back-office accounting and payroll systems. By replacing, updating and automating many processes this has started to deliver cost efficiencies across the sales support function. A similar investment was made in re-launching our web site - which now has enhanced functionality for our Clients, Consultants and Candidates.

A significant highlight of the year was the creation of ITHR Consulting Ltd (a wholly owned subsidiary of IT Human Resources plc). Created to recognise and differentiate a growing area of our business which is truly distinct from our core recruitment services offering. In FY2006/07 ITHR Consulting Ltd will be separately branded and split financially from IT Human Resources plc and as a separate entity will offer “value added” consultancy services, initially to the Telecommunications market sector. This is an exciting development in ITHR’s history and is expected to return the higher premiums and margins that can be achieved in the consulting marketplace.

FY2006/07 is hard to predict. Revenues are anticipated to show an equivalent or slight increase in performance, however operating profits will come under pressure due to the proposed growth strategy, going forward and the high level of investment that is allocated to that strategy, in particular the ITHR Consulting practice. This investment should begin to realise a return on investment from 2007 onwards.

The future, however, is bright in what is a growing market with many Corporate’s being increasingly short of skilled IT Human Resource, against a backdrop of rapidly growing demand for those skills and resources. We believe that we are excellently positioned to capitalise on that growing demand.

Sean Gallagher
Managing Director