Priory Group - Results for the Three and Six Months Ended 30 June 2011

LEATHERHEAD, England, August 26, 2011 -

Group Financial Highlights

• Pro forma^[1] Revenue for Q2 2011 increased by £37.0m to £114.6 million, a rise of 47.7% (Q2 2010: £77.6m), of which £37.6m is a result of the Craegmoor acquisition.
• Pro forma Adjusted EBITDA^[2] increased to £32.1 million (Q2 2010: £24.4m), of which £8.3m is a result of the Craegmoor acquisition.
• Underlying Priory pro forma Revenue down 0.8% to £77.0m (Q2 2010: £77.6m)
• Underlying Priory pro forma Adjusted EBITDAR up 1.6% to £25.4m (Q2 2010: £25.0m)
• Underlying Priory pro forma Adjusted EBITDA down 2.5% to £23.8m (Q2 2010: £24.4m)
• Operating cash conversion^[3]of 111% Q2 2011, 106% YTD 2011

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

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

“Short term trading conditions remain challenging as the commissioners’ response to the Government’s austerity measures continues to impact the procurement of services. Whilst we have continued to see a slowdown in conversion rates from referrals to admissions during the period, we are nevertheless satisfied with our Q2 performance. A long term continuation of this trend for restricted public sector spending could still impact the Group’s full year performance but, at this stage, the Group is still on course to achieve a full year pro forma run rate Adjusted EBITDA of £144m.”

“The Craegmoor integration continues to exceed our expectations in terms of outcomes and timeframes for achieving our objectives and we are on course to deliver the £7m+ of synergies initially forecast.”

“Overall, the Group’s clear strategy focused on providing a diverse service offering centred on the high end of the acuity care spectrum underpins the Group’s position as the largest independent provider of mental health and specialist care services in the UK.”

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.

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

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.

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