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UK — Nestor Healthcare positive about 2010 performance so far

11 May 2010
Nestor Healthcare Group Plc (NSR:LSE), has announced its Interim Management Statement covering the period from 31 December 2009 (the last year end) to date.

In the early months of 2010, operating and financial performance have continued the positive trend from the second half of 2009 enabling the directors to raise their expectations for the Group's profit for the current full year to a level above the analysts' current consensus.

The group says in a statement "social care hours have continued to grow after a 6.6% increase in the second half of 2009 over the previous year. The current round of annual price reviews with Local Authorities is, as expected, generating a limited degree of uplift, but the growth in volume, with more efficient operations and support services, is enabling our gross margin to be maintained."

"Our reputation for service delivery is creating opportunities in specialist areas such as learning disability, palliative care, respite, and home-based enablement projects involving private clients and PCTs, as well as Local Authorities. As noted in the preliminary announcement, the strength of our Social Care performance has encouraged the Board to support the acquisition of a small number of bolt-on acquisitions and the process of assessing opportunities has commenced."

"In Primary Care the activity levels in our six Equitable Access Programme health centres have continued to rise and in some cases now considerably exceed the original expectations of patient numbers. The convenience to patients of attending a walk-in clinic open from 8am to 8pm seven days a week is clearly attractive and word of mouth has become the most effective marketing for each of the locations. In its strategic review in 2009, the Board identified dentistry and end-of-life care as two areas of potential development for Primecare."

"In recent weeks we have been successful in securing our second contract under the Dental Access Programme, whilst a number of other bids remain outstanding. The two contracts won to date will begin to make a contribution in the second half of the year. In addition Primecare has achieved its first success in the provision of end-of-life care having been appointed preferred bidder for two contracts with NHS Northamptonshire. These contracts are due to commence at the end of July 2010 and will operate for an initial term of three years."

Nestor's shares rose by +5.03% after the announcement yesterday but were down by -1.35% this morning to 55 Pence.



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