Update in forecast to May 2004

Abano Healthcare forecast update October 2003

Under our policy of continuous disclosure and to ensure the market is informed of our progress, the directors of Abano Healthcare Group Limited provide the following guidance and advice.

Core NPAT (net profit after tax before unusual items) for the full year to May 2004 is forecasted to be 60-100% above the corresponding core result achieved in the last financial year. The forecast full year’s core operational performance and progress at EBITDA (earnings before, interest, tax, depreciation and amortisation) is expected to be in line with recent analysts’ expectations, being 10% – 20% above last year’s core result.

There is an increase in non-cash amortisation and depreciation charges, following the inclusion of the three Rehabilitation sector acquisitions – the minority 33% shareholding of Ranworth acquired on 1 June 2003 and the Burtons and Health Partners acquisitions on 31 July 2003, and a full year of the Geddes Dental Group operations. There is also additional depreciation with the expansion of the Aged Care sector by 37 beds at two existing facilities completed during the financial year. We note that some analyst reports in the market have not included these non cash expenses.

With the Group’s sustained profitability, and following recognition of the Group’s deferred tax position in the last financial year, the company will be expensing its deferred tax asset during the current period and will therefore be in a tax paying position prior to year end.

The company’s Annual General Meeting is to be held on the 26th of November 2003.