Trading Statement

CareTech Holdings PLC

("CareTech" or "the Group")

Trading Update, £165m Enhanced Banking Arrangement and Board Change

CareTech Holdings PLC (AIM: CTH), a leading UK provider of specialist social care services, issues the following trading update. The Group expects to announce its interim results for the six months ended 31 March 2010 in the week commencing 14 June 2010.

The trading performance of the Group for the first half of the financial year was in line with Directors expectations and reflects further development of organic activities.

During the first six months of our financial year we have increased capacity by 50 beds to 1,480 through organic growth and maintained occupancy levels of 93% in established services.

We are progressively expanding a care pathway of services across the business and investing as necessary to provide specialist local support for staff and service users. The relationships which we enjoy with many local authorities also position us well to develop strategic partnerships.

The Group is actively evaluating a substantial pipeline of acquisition opportunities with a view to completing those which the Directors believe to be most attractive in terms of sustainable returns to shareholders. Opportunities currently being appraised would offer enhanced geographical coverage and further expand our care pathway.

We are pleased to announce that our current £107m bank facility has been refinanced and extended to £165m on attractive terms. Together with the recent £15m share placing, the Group currently has approximately £85m of available funds to accelerate a consolidation strategy. The £165m facility has been provided by RBS, Lloyds and Santander on similar terms to our previous arrangements. With an appropriate interest rate hedging structure we are confident that the total cost of borrowing to the Group will remain at attractive and highly competitive levels until the facility renewal date in April 2013.

Dr Richard Steeves, Non-executive Director, has decided to retire from the Board of CareTech in order to pursue his other business interests. The Group intends to appoint a new non executive director to the board as a successor to him as soon as is practicable. Richard has been with CareTech since September 2005 and has made a valuable contribution to the growth and success of the Group over the past five years. The Board would like to thank Richard for his years of service and wish him well for the future.

Farouq Sheikh, Executive Chairman commented:

"We are pleased that trading in the first half of our financial year is in line with Directors expectations and is entirely based on organic growth. In addition, we now have approximately £85m of funds available to accelerate our strategy of consolidating the highly fragmented specialist social care market. We are delighted to welcome Lloyds and Santander as banking partners, alongside the existing relationship with RBS".

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