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Carter & Carter shares fall 80%

Carter and Carter has been unsuccessful with its bids to acquire the contract for Phase 1 of Pathways To Work.

The company’s share price fell by 80% - from 285.5p to 52p- when the announcement was released to the City. It is now valued at £21.5 million.

Shares in the company are now valued at 85p.

Carter & Carter founder and CEO Phillip Carter, died in a helicopter in May. Just prior to his death, Carter & Carter's share price was more than 1,200 pence. The company is still looking for a successor.

The Carter and Carter statement released to the London stock exchange is below in full:

The delay in the announcement of these tenders was due to approval being required by the newly appointed ministerial team at the Department for Work and Pensions.

Carter & Carter had been shortlisted in all 15 Phase 1 districts, but has not been selected as preferred bidder in any of the districts. We expect to meet with senior Government officials shortly to understand this further.

Carter & Carter is shortlisted in four of the sixteen districts for Phase 2 and tender bids are due to be submitted on 19 July 2007. Preferred bidders are expected to be selected during September 2007 with operational delivery due to commence in April 2008. The four districts in which Carter & Carter has been shortlisted are worth £45 million over three years.

Carter and Carter has outstanding bids with the LSC in relation to the current work based learning tender round and, to date, has been successful in several bids where it is currently in post tender negotiations. A further update will be provided in due course.

Elsewhere in the business, since the publication of the trading statement on 29 June 2007, the Group's June management accounts have revealed that our performance in our construction training activities was lower than we had previously expected. We are also now anticipating a lower level of achievers in July across our apprenticeship programmes and, together, we expect that these two factors will reduce Group profits in the year to 31 July 2007 by c. £3m. In addition, in Train to Gain, enrolments in the first 2 weeks of July are behind our expectations at 600.

These matters, together with the fact that we will now be expensing through the profit and loss account our bid costs associated with our unsuccessful tenders on Phase 1 of Pathways to Work, mean that the Board is now of the view that the Group's adjusted profit before tax* for the year ending 31 July 2007 will be in the order of £10.5m.

Carter and Carter confirms that it is in the process of renegotiating its bank facilities to reflect these revised expectations.

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