Re Contract

24 March 2010

Care UK Plc

("Care UK" or "the group")

Care UK, the leading health and social care provider, announces that is has been informed by NHS Plymouth that it has been appointed as reserve bidder under the recently concluded Peninsula NHS Treatment Centre Procurement relating to its Independent Sector Treatment Centre ("ISTC") in Plymouth. Care UK has operated the Plymouth ISTC since it was opened in 2005. Revenue from this contract in the year ended 30 September 2009 represented approximately 3% of total group revenues for the year of £410 million.

Care UK will continue to operate the site under existing contractual arrangements until 31 July 2010. The guaranteed asset buyback arrangements for the centre have already been effected such that Care UK received the contracted residual value payment of £8.6 million on 26 February 2010. The guaranteed asset buyback arrangements for the group's other ISTCs will result in a further £48 million cash inflow between April 2010 and December 2011 whatever future service arrangements are decided.

Care UK has an excellent track record for providing the highest standards of care at all of its' ISTCs. The overall quality of care rating is 96% 'excellent' or 'very good' with zero cases of hospital acquired MRSA. Care UK's ISTCs outperform the top 20% of NHS hospitals on every measure of patient satisfaction.

Mike Parish, Chief Executive of Care UK, said:

"We are surprised and disappointed at this decision that follows a procurement evaluation process that we do not believe paid sufficient regard to the outstanding track record of this highly regarded service. However, the decision will have a limited impact on Care UK's revenue or profit in 2010.

"We remain confident that we will continue to operate the majority of our other ISTC centres for the longer term, particularly reflecting the lessons of this procurement process."

- Ends -

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