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VHE Holdings PLC (VHE)

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Tuesday 12 October, 1999

VHE Holdings PLC

Statement re Leabrook Road

VHE HOLDINGS PLC
12 October 1999

                                    
                              VHE HOLDINGS

The Board of VHE Holdings plc is pleased to announce the settlement of
the Leabrook Road dispute.

Under the terms of the settlement VHE receives £4,500,000 in cash as
full and final settlement of all contractual issues in relation to the
dispute.  VHE will write off £4,355,000 from its balance sheet.  Had
this write off occurred in relation to the last published Balance Sheet
as at 31st March 1999 the net assets would have been reduced from
£11,049,000 to £6,694,000.

The write-off will cause half year and full year profits to be
materially below market expectations.  However, although trading in the
first half has been slower than budgeted, expectations for full year pre-
Leabrook results remain unaffected and the Board is confident that the
substantial debt reduction and freeing of executive resource resulting
from the settlement will have a positive effect on future performance.

                                                                                                                                                                                                                                                

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