Ironbridge

31st August, 2004

Affinity Health Limited today reported a result that was ahead of operational forecasts from its Prospectus issued in March this year for its secured notes.

For the seven month period since acquisition the Group reported revenue of $720 million and earnings before interest, depreciation and amortisation (EBITDA) of $71.6 million. During the same period cash generation was strong, with $95 million at June 2004.

Revenue for the 12 months ending 30 June 2004 (includes hospitals performance pre acquisition on 1 December 2003) was $1,273 million and EBITDA was $140.8 million. This is ahead of the Prospectus forecast turnover of $1,264 million and forecast EBITDA of $136.8M for the same period on a comparable basis. Holders of secured notes will receive their first payment in October 2004.

Managing Director, Robert Cooke, said that he was delighted that during the time the new company was established it was also able to maintain growth ahead of the industry average.

"Our overall performance has come in ahead of forecast and in particular our working capital management has been very good, enabling us to generate $95 million in cash since our formation in December," Mr Cooke said.

"The growth in admissions has been consistent across all states and the performance of our major hospitals has been very pleasing," he said.

"We have continued to strengthen the local hospital management and increase their accountability, while at the same time they have continued to forge good community links.

"The overall costs for the group have been well managed. Agency nursing use has continued to decrease and nursing vacancies have declined sharply across all our hospitals.

"The partnerships developed with major product suppliers have also yielded greater efficiencies and it has seen overall supply costs decrease.

"We have just completed a period of negotiating new agreements with most of the major health funds and this has provided certainty for revenue rates in future.

"The response to Affinity Health from specialists working in our hospitals has been positive, and initiatives such as rural fellowships for doctors and the development of a research foundation have been well received.

"We have built a platform of sound business fundamentals that will enable us to continue this improved performance."

Ends

For further information:
Gavin Davis – (03) 9639 2300
0417 600 769