RNS Number:9062S
Nestor Healthcare Group PLC
05 December 2003

5th December 2003


                          Nestor Healthcare Group plc

                                 Trading Update

Nestor Healthcare Group plc ('Nestor'), the leading private provider of
healthcare professionals, care workers and related services in the UK, today
announces a trading update for 2003 and outlook for 2004.


As previously indicated, 2003 has been a year of transition for Nestor and the
two major change projects are now close to successful completion. Subject to
satisfactory trading in December, the Board expects to report profitability in
line with expectations for the year, with particularly pleasing progress in the
Personnel Division, where margins have benefited from the increasing
contribution of Homecare.


However, in recent weeks, a significant change in the NHS market, which
currently accounts for approximately 40% of the business of the Personnel
Division, has caused the Board to adopt a more cautious view of its prospects
for 2004. Difficulties experienced by the Group in accessing a major contract
secured in September are of such a nature as to reduce its expectations of
securing other similar contracts and renewing existing high volume contracts
with the NHS.


In addition and as anticipated, the pricing structures implemented under the
NHS's new regional framework agreements have impacted negatively on margins and
have also had the unexpected effect in recent weeks of reducing volumes.


The Board views the homecare market, with its good prospects for growth, as an
increasingly important focus for its business. Homecare now accounts for
approximately 45% of the Personnel Division's activity and the Board expects to
continue to develop in this sector in 2004, with the extension of the Group's
acquisition programme complemented by organic growth.


The Group's recent budgeting process has extrapolated the full-year effect of
the changes outlined above and, as a result, the operating profit performance of
the Personnel Division in 2004 is now expected to be in line with 2003, albeit
on a higher turnover.


In the Services Division, the recent BBC survey findings that 83% of GPs plan to
opt out from providing their own out-of-hours cover, reinforces the strategy of
Primecare Primary Care. The Board is encouraged by evidence that Primary Care
Trusts (PCTs) are starting to recognise the need to purchase quality
out-of-hours GP cover at a price that reflects the investment required to meet
the Carson Standards. However, it is becoming increasingly clear that many PCTs
are yet to plan for the significant responsibility they will inherit during
2004. The effect on the Group of any delay in their decision-making is difficult
to predict at this stage but overall, the Board expects the Division's
profitability still to improve upon its breakeven position in 2003.


With the impact of the market-related issues identified above, the Board expects
profits for the Group in 2004 to show a modest increase over that forecast for
2003 but not to the level of the market's current expectations. It expects to
maintain the current level of dividends payable for 2003 and 2004, demonstrating
confidence in the Group's long-term prospects.


Enquiries;


Justin Jewitt, Chief Executive          07711 593000


Martyn Ellis, Finance Director         07887 641314


Seb Hoyle / Toby Mountford            020 7638 9571

Citigate Dewe Rogerson


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