Contract Metropolitan Police

RNS Number:5974H
Healthcare Enterprise Group PLC
14 August 2006

14 August 2006



Healthcare Enterprise Group PLC


Contracts and deferred acquisition payment update


Healthcare Enterprise Group PLC (Aim:  HCEG, "HCEG"), the international
healthcare products group, announces that it will not now be required to make
payment of #1.3 million as additional consideration for the acquisition of Crest
Medical which was announced on 17 November 2004.  This payment was conditional
on two bespoke supply contracts between HCEG and the Metropolitan Police being
extended or renewed on terms acceptable to HCEG.  Following a tender process,
these contracts have now been awarded to other organisations.


In the view of the Board, a combination of these two events should have a
broadly neutral impact on the Group's profitability for year ending 28 February
2007.  The revenue and contribution loss from these two low margin supply
contracts is mitigated by the financial savings as a result of HCEG not having
to pay the #1.3m final installment.  There will be an improvement in HCEG's
working capital following the release of special stock being held for these
contracts.


The annual revenue of these two contracts was #2.6m.  However, they were, in the
main, extremely complex and barely profitable outsourcing agreements which
provided few synergistic opportunities within HCEG's Warrington operation.
There is no impact on the recently announced supply agreements.


HCEG continues to make progress following its strategic review and the Board
will continue to focus efforts on maximizing shareholder value.




Enquiries:

College Hill           020 7457 2020
Corinna Dorward


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