RNS Number:6405V
Reed Health Group PLC
20 February 2004


Embargoed until 0700                                          20 February 2004






                             Reed Health Group plc

                         ("Reed Health" or the "Group")


                                 Trading update


Ahead of the announcement of the Group's results for the six months ended 31
December 2003 next week, the Board wishes to update the market on the Group's
performance during that period and on current trading.

At the Annual General Meeting, held on 12 November 2003, the Board stated that
the Group was experiencing a low level of demand in some of its markets, but the
Board believed the Group could maintain its performance because of the cost
reduction programme which had been implemented.

During the six months ended 31 December 2003, the markets in which the Group
operates have continued to be difficult and this, combined with the costs of the
branch opening programme, has had an impact on the Group's performance.  During
the period, Reed Health initiated a cost reduction programme but most of the
benefits of this will only come through towards the end of the current financial
year.  As a result, the Group's turnover for the six months ended 31 December
2003 is expected to be #54.9 million (2002: #58.3 million) and earnings before
interest, tax, depreciation, amortisation and operating exceptional items are
expected to be #2.9 million (2002: #4.8 million).

Since January 2003, the Group's markets have significantly worsened.  This is
due, firstly, to the compliance requirements of the Department of Health's
Purchasing and Supply Agency ("PASA"); secondly, to the continuing spend on
permanent appointments to replace temporary staff; and, lastly, the initial
impact of NHS Professionals.

PASA is now requiring a significant number of compliance checks to be performed
on staff to be supplied by agencies.  In order to ensure that we meet PASA's
requirements, we have had to withdraw a number of nurses who would normally have
been available through our London branches and this has had a detrimental impact
on the Group's Nurse business.  The Board believes that the impact of these
increased compliance requirements will be beneficial to the Group in the long
term by creating a barrier to entry.  However, it is likely to continue to have
a negative impact on the Group's results for the current financial year.

With no substantial improvements in the Group's markets expected in the short
term, the Board believes that Reed Health's results for the year ended 30 June
2004 will be significantly below current expectations.

In light of these developments, the Board expects to propose an unchanged
interim dividend of 0.73p per share.

As previously announced, Reed Health will announce its interim results for the
six months ended 31 December 2003 on Wednesday 25 February 2004.


                                    - Ends -


Enquiries:

Reed Health Group plc                                     020 7834 3181

David Fennell, Chief Executive
Mark Garratt, Finance Director


Weber Shandwick Square Mile                               020 7067 0700

Louise Robson or Susanne Walker


                      This information is provided by RNS
            The company news service from the London Stock Exchange
END

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