Care UK pre-close trading update | Care UK

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Care UK pre-close trading update

September 21st 2005

Pre-Close Trading Update and Investor Visit to the Barlborough Links ISTC

The Company has continued to make good progress both operationally and with new project implementations, and anticipates that results for the full year will be in line with market expectations.

Residential Care Services

Our Residential Care Services division has successfully built and commissioned new homes in Islington and Hammersmith, and good progress continues with the construction of a further new home in Hammersmith and a replacement new home in Richmond.

We are pleased to have been appointed as preferred bidder by the London Borough of Islington for a new 25 year contract to build and operate an 87 bed home. Contractual discussions with Poole Borough Council in relation to our previously announced appointment as preferred bidder for a minimum 70 bed scheme are also proceeding satisfactorily.

Birmingham City Council has decided to proceed with an in-house solution for the first phase of its strategy to create specialist care centres for older people. Whilst we are disappointed with this decision we will seek to support them in the subsequent phases of their strategy.

Our pipeline of opportunities continues to support our growth expectations for this division.

Community Care Services

Good progress has been made in Homecare with several new contract awards and strong organic growth being maintained. In August we completed the acquisition of CJ Homecare in Bradford, West Yorkshire, a provider of 2,500 hours of care per week, predominantly under contract to Bradford Social Services. The acquisition of Seymour Homecare in Bolton, Lancashire, announced previously, has been integrated effectively.

Homecare has strong support from Government and Social Services and we are delighted with our continuing good performance.

Our Specialist Recruitment business, DMS, has been successful in being appointed an approved framework supplier to the NHS and we now look forward to improving turnover in this business following a challenging period.

Specialist Care Services

The recently formed Specialist Care Services division has further developed its strategy to focus on specialist adult and younger people's care services following the appointment of a new Managing Director in March 2005. The integration of FSG, our specialist foster care business which was acquired in February, has gone well and we are making progress with the roll out of younger people's services, specialist psychiatric services and learning disabilities.

Clinical Care Services

Partnership Health Group ("PHG"), our 50% owned joint venture, has completed the construction and commissioning of two new Independent Sector Treatment Centres (ISTCs) in Plymouth and Barlborough Links near Chesterfield. The Barlborough Links treatment centre replaces two interim service solutions that had been operational during the construction period. Since opening, the two ISTCs have performed to expectations.

PHG's third ISTC contract, for a new centre in Maidstone, has now been signed and construction is underway with services planned to commence from October 2006. The contract, for a new treatment centre to be constructed at the Goodmayes Hospital in North East London is progressing satisfactorily toward financial close. This treatment centre will provide a range of services for Primary Care Trusts (PCTs) in Barking & Dagenham, Havering, Redbridge and Waltham Forest.

The Department of Health has recently commenced procurement for a further wave of ISTC project opportunities as well as further procurement of diagnostic services. As expected, indications are that these second wave procurements are larger than the first wave and include a range of interesting opportunities for which we shall be submitting Pre-Qualification Questionnaires.

In primary care, our contract to provide out of hours services for Southend and Castle Point & Rochford PCTs in Essex is proceeding well. Responsibility for healthcare in prisons has transferred to PCTs and we are pleased to have been selected to provide primary care services to HM Prison, Chelmsford. Progress toward financial close on the two primary care commuter walk-in centres has been delayed by the availability of suitable property, but we continue to work positively with the PCTs involved and expect to make substantive progress soon.

We believe that the Department of Health's strategy to reform primary care services is likely to lead to a good flow of opportunities for Care UK during the coming years.

Commenting on the outlook, Mike Parish, Chief Executive of Care UK said:

"During the year we have focused on a substantial implementation programme, particularly in Residential Care Services and the two ISTCs, and we are pleased with the progress we have made.

"We are encouraged that momentum is continuing to build in expanding the role of the independent sector in providing publicly funded health and social care and this is reflected in our new business pipeline."

Institutional investor and analyst visit to Barlborough Links ISTC

Care UK is today (21st September) hosting an institutional investor and analyst visit to its ISTC at Barlborough Links, near Chesterfield. The visit will involve presentations from senior management on key areas of Care UK's business with the aim of updating people on the Company's strategy, together with providing them with the opportunity to gain an in depth awareness and understanding of Care UK's business. No new material or financial information will be disclosed.