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25 September 2008

NEUTRAHEALTH PLC ('the Company')

TRADING UPDATE

NeutraHealth plc, one of the leading UK vitamins & supplements companies, provides the following trading update.

Market Conditions

Over the last three months, and in line with other consumer facing companies,  NeutraHealth has suffered from the slowdown in consumer spending.  As a result we expect sales and profit before tax, to the end of the year, to be below current market expectations. 

The Company is also experiencing supply chain cost pressures. These are being driven by price increases on commodity items such as fish oil, vitamin C and plastics. This will reduce the synergy benefits expected to arise in purchasing savings in 2009 from the recent acquisition.

The Board is reassessing its business plan in light of the changes in trading conditions, and expects to provide a further update to the market before the end of the year.

Integration update

The integration of Brunel Healthcare Manufacturing into the NeutraHealth group following its acquisition in June 2008 has continued to progress smoothly. All customers and key staff have been retained in the process. Systems integration and process improvements will be completed before the end November, ahead of the integration timetable. 

Plans for in-sourcing manufacturing and packaging processes from across the group are also progressing well and in line with the timetable. These will deliver synergy benefits going forward.

Michael Toxvaerd, Deputy Chairman, commented:

'Our trading outlook has changed very rapidly. Until recently we were seeing  very strong trading and limited supply chain and inflationary pressures, despite difficult conditions across the rest of the economy. Without losing any customers, we are now faced with an unexpected reduction in like for like sales for the second half of the year.

We are now reviewing all elements of our cost structures to adapt to these market conditions.'

For more information:

Further information for investors is available on the Company's website at  www.neutrahealthplc.com/