Priory Group: Results for the Three and Nine Months Ended 30 September 2011

LEATHERHEAD, England, November 24, 2011 -

Group Financial Highlights

• Pro forma^[1] Revenue for Q3 2011 increased by £36.5m to £114.5 million, a rise of 46.7% (Q3 2010: £78.0m), of which £38.6m is a result of the Craegmoor acquisition.
• Pro forma Adjusted EBITDA^[2] increased to £31.5 million (Q3 2010: £25.2m), of which £10.2m is a result of the Craegmoor acquisition
• Underlying Priory pro forma Revenue down 2.7% to £75.9m (Q3 2010: £78.0m)
• Underlying Priory pro forma Adjusted EBITDAR down 12.0% to £23.1m (Q3 2010: £26.3m)
• Underlying Priory pro forma Adjusted EBITDA down 15.6% to £21.3m (Q3 2010: £25.2m)
• Operating cash conversion^[3]of 90% Q3 2011, 97% YTD 2011. Excluding £4.1m of restructuring costs accrued in Q2 but paid in Q3, the Q3 cash conversion was 99%.

For a copy of the full financial report for the three and nine months ended 30 September 2011 please visit www.priorygroup.com/investors/financial-performance.aspx.  

Commenting on the results, Priory Group Chief Executive Officer Philip Scott said:

“As anticipated, short term trading conditions have remained challenging, particularly at five of the Group’s secure healthcare facilities as a result of the ongoing issue of patient repatriation to NHS facilities.  This impact accounts for 95% of the underlying EBITDAR reduction during the period and is anticipated to continue to adversely affect the Group’s performance during the remainder of 2011 and into Q1 2012.  Longer term, the Priory remains well positioned to benefit from commissioning reforms centered around price, quality outcomes and patient choice but, as a result of this short term impact, the Group’s 2011 Adjusted EBITDA is now likely to be between £132-£135 million.

“Despite this, Priory’s strategy of focusing on providing a diverse service offering centered on the high end of the acuity care spectrum provides the Group with a highly defensive positioning and we remain confident in the strong, long term fundamentals of the business.”

About Priory

Priory is Europe’s leading independent provider of care for mental health conditions, psychological and psychiatric services including condition management programmes, secure, forensic and stepdown services, specialist education, complex care, neuro-rehabilitation services, fostering and care homes.  It is also the UK’s leading independent provider of support for people with learning difficulties, autism, complex needs, and mental health problems.

Priory employs over 10,000 people with a vast range of expertise and experience in over 260 hospitals, schools and care homes throughout the United Kingdom, Northern Ireland and Scotland. Priory has approximately 5,400 patients, pupils and residents.

1. The Pro forma income statement assumes that the acquisition of the Priory Group occurred on 1 January 2010 rather than 4 March 2011, and that the acquisition of the Craegmoor Group occurred on 1 April 2011 rather than 14 April 2011.  Therefore the 3 months ended 30 June 2011 present the results of the Priory Group and Craegmoor combined, the six months ended 30 June 2011 present 3 months of Craegmoor and six months of the Priory Group combined and the 2010 comparatives present the Priory Group only.

2. Excludes exceptional non recurring items and charges for future minimum rental increases.

3. Operating cash conversion is defined as cash flow from operations before tax divided by EBITDA before future minimum rental increases (including exceptional items). This is presented on a statutory basis, not pro-forma.

Enquiries:

Andrew Jaques / James White, MHP Communications, +44(0)20-3128-8100

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