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Core Businesses Assist ElderCare’s Repositioning

Core Businesses Assist ElderCare’s Repositioning In Healthcare
Non-Cash Write Offs in Line with Expectations

Auckland – August 13, 2001 – Listed healthcare provider, ElderCare New Zealand (NZSE: ELD) today announced a net deficit of $8.1million for the twelve months ended 31 May 2001, after accounting for a number of non-cash and one-off restructuring costs associated with its repositioning into the wider healthcare market. This is in line with statements made at the company’s annual meeting in November 2000 and updated in the company’s Half-Year Report to Shareholders.

“The financial performance of our core operations was ahead of last year with revenues up 69% at $34.1 million. EBIT from core operations is up 36% at $3.4 million” said CEO Alan Clarke.

“For the latter half of the period under review ElderCare has had a dual focus. We have improved the efficiency of core operating businesses while simultaneously repositioning to take advantage of opportunities in the wider healthcare market that complement our core businesses.

“Our key operating assets – hospitals, nursing homes and Ranworth’s clinical rehabilitation facilities – are providing good operating profit on the back of strong occupancy and service levels. This improvement has continued post year-end.

“ElderCare has also broadened its divestment programme, taking an aggressive stance on realising the value of non-core assets and businesses,” said Chairman, Maurice Kidd. “This has resulted in non-cash and revaluation write downs of assets totalling $7.4 million for the year.

“Since we announced our planned repositioning of ElderCare last year, restructuring and assets sales have yielded in excess of $8 million. This together with operating cashflow has been applied against debt to improve the balance sheet’s capacity to support expansion into the wider healthcare market. As a consequence we have now reduced the company’s debt from a peak of $49.3 million to $41.2 million at period end and we are planning to realise a further $6 million from the divestment programme in coming months.

“We have made good progress on this strategy. We have identified a number of attractive opportunities which meet our criteria and we expect to make announcements on this shortly. Together, these opportunities and our existing medical businesses will offer an attractive investment base for current and future shareholders,” Mr Kidd said.

ENDS

Company Background
ElderCare New Zealand Limited (NZSE: ELD) is a healthcare provider. The company owns a substantial portfolio of nursing homes, assisted living and assessment and rehabilitation facilities throughout New Zealand. These offer an array of specialised services to cater for the healthcare needs of a broad range of New Zealanders. The company has embarked on a programme that will see it expand its operations into other fee income generating businesses in the wider healthcare sector.

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