RNS Number:3614U
Matrix Healthcare PLC
19 January 2004

19 January 2004



                             Matrix Healthcare plc

            Preliminary results for the year ended 30 September 2003



Chairman's statement



Dear Shareholder



In the year to 30 September 2003 your company made a profit after taxation,
before the exceptional item, of #45,000 compared with a profit of #19,000 in the
previous year and operating margins before exceptional items increased to 25 per
cent. from 22 per cent. During the year the Directors completed a review of the
carrying value of the Company's homes, which has resulted in the reversal of the
impairment loss and the values of the homes have been increased to #4 million.
Profit on ordinary activities before taxation increased to #661,000 as compared
to a loss of #518,000 in the previous year, primarily as a result of the
reversal of this impairment loss.



In my statement accompanying the interim results for the six months ended 31
March 2003, I confirmed that ''your Directors will continue to focus on seeking
a buyer for the Company's assets at the appropriate time''. In August 2003,
Jeremy Davies and Richard Ellert (''the Davies and Ellert Concert Party'')
approached the Board with a proposal to purchase Best Investment's Matrix
Convertible Loan Stock and reverse Newsham House Limited and Woodland Healthcare
Limited into the Company. The Board received a number of expressions of interest
in the Company's assets at a similar or lower value to the offer but none of the
others offered Matrix Shareholders the opportunity to take cash now or to remain
as Matrix Shareholders within the enlarged group. It is these proposals put by
the Davies & Ellert Concert Party that have today also been announced.



Details of the proposals to reverse Newsham House Limited and Woodland
Healthcare Limited into the Company are set out in the circular dated 19 January
2004 to be posted to Matrix Shareholders today. Details of the offer to be made
to Matrix Shareholders by the Davies and Ellert Concert Party are set out in the
offer document dated 19 January 2004 to be posted to Matrix Shareholders today.



As a result of the conversion of the #900,000 Matrix Convertible Loan Stock, the
extraordinary general meeting previously convened for 11.30 a.m. on 30 January
2004 will be adjourned indefinitely as the business which was to be considered
at that extraordinary general meeting no longer bears any relevance.



The Board believes that the acquisitions and the offer are in the best interests
of Matrix Shareholders. The Board also took note of the fact that, for Matrix
Shareholders who do not wish to accept the offer, following completion of the
acquisitions, the enlarged group will have greater critical mass, a new
executive management team, new #9.75 million banking facilities and a growth
strategy.



In reaching their decision, the Board took note of the fact that the Davies and
Ellert Concert Party would incur an obligation pursuant to Rule 9 of the City
Code to make a mandatory cash offer of 40p per Matrix Ordinary Share for the
remainder of the Share Capital of the Company that they do not already own. This
would give Matrix Shareholders the opportunity to sell their shares at 40p per
Matrix Ordinary Share, the price paid today by Jeremy Davies and Richard Ellert
to Best Investment and myself for 2,727,272 Matrix Ordinary Shares.



There are two potential courses of action that a Shareholder can take in
relation to the offer:



Having regard to the acquisitions and factors set out in the offer document
dated 19 January 2004 relating to the enlarged group's on-going business, growth
strategy and new executive management team, a Matrix Shareholder may take the
view that the offer, at 40p per Matrix Ordinary Share in cash, does not
represent best value at this time and that there may be value in following the
enlarged group's strategy. With 10 care homes, the enlarged group will have
greater critical mass than the existing business of Matrix. In addition, with
#9.75 million of banking facilities on completion and the new executive
management team, the enlarged group may therefore be better placed to enhance
shareholder value than the existing Matrix business. A Matrix Shareholder who
accepts these arguments is advised by the Directors to reject the offer and
remain a Matrix Shareholder. A Matrix Shareholder who rejects the offer should
bear in mind the risk factors set out in Part II of the circular to be sent to
Matrix Shareholders dated 19 January 2004.



A Matrix Shareholder who does not accept the enlarged group's strategy to
enhance or create shareholder value or who simply wishes to take 40p per Matrix
Ordinary Share in cash now is advised by the Directors to accept the offer of
40p per Matrix Ordinary Share in cash because they believe the terms of the
offer to be fair and reasonable. A Matrix Shareholder who wishes to accept the
offer and who invested in Matrix Ordinary Shares through the Business Expansion
Scheme and/or the Enterprise Investment Scheme is strongly advised to seek
advice on his/her personal taxation position from a suitably qualified
professional under the Financial Services and Markets Act 2000.



As summarised above, the Directors consider that the course of action that a
Matrix Shareholder should take in relation to the offer depends upon their
commercial assessment of the enlarged group, their desire for cash now and their
personal taxation circumstances.





Peter Dewe-Mathews

Chairman

19 January 2004




Group profit and loss account

For the year ended 30 September 2003


                                                                   2003            2002
                                                                   #'000           #'000

Turnover                                                           2,405           2,559
Cost of sales                                                      (1,797)         (1,994)

Gross profit                                                       608             565
Administrative expenses - ordinary                                 (288)           (266)
Administrative expenses - exceptional                              564             (539)

Operating profit/(loss)                                            884             (240)
Interest payable and similar charges                               (223)           (278)

Profit/(loss) on ordinary activities before taxation               661             (518)
Taxation                                                           (52)            (2)

Profit/(loss) after taxation and retained for the year             609             (520)

Earnings/(loss) per share                                          26.7p           (22.7)p

Diluted earnings/(loss) per share                                  13.5p           (22.7)p




All operations of the Group continued throughout the periods and no operations
were acquired or discontinued.





Group statement of total recognised gains and losses

For the year ended 30 September 2003


                                                                   2003            2002
                                                                   #'000           #'000

Profit/(loss) for the financial year                               609             (520)

Deficit on revaluation                                             -               (31)

Total recognised gains and losses for the year                     609             (551)







Group balance sheet

As at 30 September 2003


                                                                   2003            2002
                                                                   #'000           #'000
Fixed Assets
Tangible assets                                                    4,000           3,500


Current Assets
Stocks                                                             6               6
Debtors                                                            137             128
Cash at bank and in hand                                           1               1

                                                                   144             135
Creditors: amounts falling due within one year                     (1,791)         (1,782)

Net current liabilities                                            (1,647)         (1,647)

Total assets less current liabilities                              2,353           1,853

Creditors: amounts falling due after more than one year including
convertible debt                                                   (1,112)         (1,246)
Provisions for liabilities and charges                             (25)            -

Net assets                                                         1,216           607


Capital and Reserves

Called up share capital                                            1,142           1,142
Share premium account                                              1,242           1,242
Profit and loss account                                            (1,168)         (1,777)

Shareholders' funds (including non-equity interests)               1,216           607






Group cashflow statement

For the year ended 30 September 2003


                                                                               2003            2002
                                                                              #'000           #'000

Net cash inflow from operating activities                                       422             400
Returns on investments and servicing of finance                               (207)           (238)

Capital expenditure and financial investment                                   (22)            (47)

Cash inflow before financing                                                    193             115

Financing                                                                     (289)           (333)

(Decrease)/increase in cash during the year                                    (96)           (218)


Reconciliation of net cash flow to movement in net debt

(Decrease)/increase in cash during the year                                  (96)            (218)
Cash outflow/(inflow) from decrease/(increase) in debt                        289              333


Change in net debt resulting from cash flows                                  193              115

Amortisation of issue costs on unsecured loan stock                          (16)             (40)

Movement in net debt during the year                                          177               75
Net debt at start of year                                                 (2,785)          (2,860)


Net debt at end of year                                                   (2,608)        (2,785)






Reconciliation of shareholders' funds

For the year ended 30 September 2003


                                                                    2003           2002
                                                                   #'000           #'000

Group

Opening shareholders' funds                                        607             1,158

Profit/(loss) for the year                                         609             (520)

Reduction in revaluation reserve                                   -               (31)

Closing shareholders' funds                                        1,216           607







Notes:



1.      The financial information set out in this statement does not constitute
statutory accounts for the year ended 30 September 2003 within the meaning of
Section 240 of Companies Act 1985.  Statutory accounts for the year to 30
September 2003 will be delivered to the Registrar of Companies.  The financial
information for the year ended 30 September 2002 contained herein is an abridged
version of the accounts filed with the Registrar of Companies.  The incumbent
auditors reported upon those accounts, their report was unqualified and did not
contain a statement under Section 237(2) or 237(3) of the Companies Act 1985.



2.      Earnings per share has been calculated by dividing profit on ordinary
activities after taxation of #609,000 (2002: loss of #520,000; 2001: profit of
#6,000) by the weighted average number of ordinary shares in issue during the
year of 2,283,422 (2002: 2,283,422; 2001: 2,283,422).  Diluted earnings per
share figures reflect the conversion of loan stock to shares.



3.      Your attention is drawn to the announcement released by the Company
today regarding the acquisition of Newsham House Limited and Woodland Healthcare
Limited and to the announcement released today by the Davies and Ellert Concert
party regarding their mandatory cash offer for the Matrix Shares that they do
not already own.



4.      Copies of the Company's statutory financial statements are being sent to
Matrix Shareholders today and are available free of charge for collection from
the head office of Matrix at The Pightle, North Heath, Chieveley, Berkshire RG20
8UD or from the offices of the Company's Nominated Adviser, Durlacher Limited,
at 4 Chiswell Street, London EC1Y 4UP.





END


                      This information is provided by RNS
            The company news service from the London Stock Exchange
END

FR BLMRTMMIBMJI