Contract with NHS

Tribal Group PLC
10 December 2004


10 December 2004

Tribal Group plc

Tribal Group closes £214m contract with NHS

Following the announcement in February 2004 of its selection as preferred
bidder, Tribal Group is pleased to announce today that, through its wholly-owned
subsidiary, Mercury Health, it has reached financial close on a five year NHS
contract to design, set up and manage a regional network of five treatment
centres in mid-Sussex, Portsmouth, Medway, Wycombe and Havant. The contract
guarantees revenues to Mercury Health of £214m.

The contract provides Mercury Health with a significant share of a substantial
new market in UK healthcare delivery. The contract guarantees a base level of
surgical and diagnostic caseload for five years but Mercury Health will also be
seeking, during the initial contract term and beyond, additional volumes from
the NHS and other potential sources aside from this contract. A number of
preliminary opportunities are currently being reviewed.

The opening of the centres will be phased, with the earliest opening in Autumn
2005 and the final one opening in January 2008. The largest centre, in
mid-Sussex, will open in July 2006, although Mercury Health will be providing
interim services in mid-Sussex from Spring 2005.

As a result of the phased opening programme, Tribal Group expects to be
delivering approximately 30 per cent. of maximum guaranteed annual volumes in
the year ending 31 March 2006 and 80 per cent. in the year ending 31 March 2007.
The contract is therefore expected to make its first positive contribution to
Tribal Group's earnings in the year ending 31 March 2007.

The capital funding for this contract is £51m, satisfied as to £17.5m from
Tribal Group's cash resources and existing debt facilities and £33.5m of
non-recourse project debt underwritten by Royal Bank of Scotland and HBoS. This
funding will be used for property and infrastructure (£33.5m), implementation
(£14.1m) and working capital (£3.4m). In addition, £6.5m of medical equipment
has been financed through operating leases with Lombard.

Tribal Group's principal construction partner is Amec, with whom it has entered
into a contractual agreement that provides for a guaranteed maximum price for
the construction programme.

The new treatment centres will perform a range of in-patient and out-patient
elective surgery and diagnostic procedures for non-acute conditions. The NHS'
objective is to increase capacity and effect a sustained reduction in waiting
lists through securing new capacity from the independent sector.

The Board of Tribal Group hopes that in line with the Prime Minster's
announcement in October 2004, that the percentage of elective surgery carried
out by the independent sector will substantially increase from the current 3 per
cent. over the next few years. The board therefore expects Mercury Health to
submit bids for future contracts.

Tribal Group also announces today that it has agreed a clinical partnership with
Hospital for Special Surgery (HSS) in New York, one of the world's leading
orthopaedic hospitals. HSS will be providing orthopaedic and specialist clinical
input and will also be supporting Mercury Health's future bids. John Reynolds,
Chief Executive Officer of HSS, will be working as a senior adviser to Mercury
Health.

Henry Pitman, Tribal Group's Chief Executive, commented: 'This is a very
important contract and we are delighted that we have reached financial close. At
£214m, it is the largest contract that the Group has ever won, and our success
in securing it confirms the strength of our business model. We have an excellent
management team in Mercury Health that will be augmented by the support of HSS
and we therefore aim to bid for and win additional contracts procured by the
NHS.'

Contact:

Henry Pitman                                              01285 886020
Chief Executive, Tribal Group

Simon Lawton                                              01285 886020
Group Finance Director, Tribal Group

Peter Martin                                              0118 925 5811
Chief Executive, Mercury Health

Neil Bennett / Colin Browne                               020 7379 5151
Maitland








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