16 May 2014
Company Announcements Office
Australian Stock Exchange
20 Bridge Street
Sydney NSW 2000

ASX Announcement Pulse Health Limited (ASX Code: PHG) Investor Update Pulse Health Limited (ASX Code: PHG) has previously announced an Extraordinary

General Meeting of shareholders for Monday 26 May 2014.
The EGM provides the opportunity to update shareholders on our growth strategy, acquisition activity, earnings and dividend outlook. Each of these will be addressed in turn.

Growth Strategy

The company has a simple and focused growth strategy, comprising four key initiatives;
1. Improve hospital utilisation
Across our portfolio of hospitals, average occupancy over the last 12 months has been
64%. For each 5% that we increase our occupancy, our operating EBITDA improves by approximately $1.0million.
The key enablers and initiatives to improve utilisation are:
• Strengthened general management capability and single point accountability for each site
• Strong focus on maintenance of close communication and relationships with referring and attending doctors
• Maintaining up to date operating theatre equipment (eg new state of the art endoscopy equipment for all operating theatres, and new eye surgery equipment at South Burnett Private Hospital)
• Focused marketing campaigns outlining the benefits to patients of choosing
to use their private health insurance at our private hospitals

Pulse Health Limited

Investor Update - May 2014 ACN: 104 113 760



Whilst occupancy month to month can vary and be sensitive to factors outside our control, for example climate, public hospital referrals and doctor absences, we believe that over the medium term our utilisation rate will improve and be a driver of earnings growth and shareholder value.
2. Brownfield expansion
Increasing the earning capacity of our hospitals by adding beds or income producing facilities is a capital efficient means of driving earnings growth, as is the introduction of new services such as dialysis at Forster Private Hospital. Typically a brownfield expansion will involve only the upfront fit out cost and a marginal increase in operating rent.
We have recently completed the Eden expansion of 12 beds and the Westmead expansion of 5 beds. We have further expansions being planned at a number of our sites over the coming years as local demand increases and occupancy builds to suitable levels.
Whilst utilisation take up rates of brownfield expansions may vary, over the medium term these projects can be expected to drive high returns on capital and increase the earnings derived from the relevant operating asset.
3. Capture operating scale benefits
Centralising a shared services platform to support all our hospitals will ensure we derive scale benefits, improve operating effectiveness and reduce risk.
We have only recently centralised finance, payroll, selective procurement, HR and compliance functions. The full benefit of this change to the operating model will be realised in future years and be enhanced as we expand and diversify the number of operating facilities.
4. Acquisition (and diversification)
We currently have six hospitals within our portfolio. The central management and shared services structure established has the ability to manage more hospitals with very little additional cost. Furthermore a greater number of hospitals should provide a diversification benefit, by reducing the impact of monthly occupancy movements in single facilities.
We have clear acquisition criteria, have appointed corporate advisers and are actively working an acquisition pipeline. The recent capital raising positions us well to negotiate and complete our next acquisitions.
A number of acquisitions are in train with one nearing finalisation and another in an advanced state. Both are strongly EPS accretive. Having had more time to assess the market we believe that there is a significant opportunity for acquisitive expansion over
many years.

Page 2


Earnings Update

The company's underlying* (unaudited) EBITDA for the nine months ended 31 March
2014 was $3.4million. Our full year 2014 result will be sensitive to operating utilisation in the final quarter. April was softer than anticipated and we estimate an underlying * EBITDA outcome in the range of $4.5-$5.0million depending on the actual occupancy achieved in the last two months.
The above guidance excludes the benefits of both the recently completed centralisation of shared services and the brownfield expansions at Westmead and Eden which are expected to make only a small contribution to FY14. These initiatives should deliver an EBITDA benefit in FY15 of at least $1.0million.

Dividends

Given the company is now in a tax paying position with a reliable earnings base, we are pleased to announce the company's intention to commence the payment of half- yearly fully franked dividends, starting with a final dividend for the current financial year. Based on our level of franking credits, we estimate this will be 0.5c per share. More detail on our dividend outcome and ongoing policy will be provided in the full year result announcement.

Phillipa Blakey

Chief Executive Officer

For more information contact:

David Franks Phillipa Blakey Company Secretary Chief Executive Officer Pulse Health Limited Pulse Health Limited
Tel: +61 2 9299 9690 Tel: +61 2 8262 6300
For more information of Pulse Health please visit www.pulsehealth.net.au

the term "underlying EBITDA" means the company's unaudited profit before tax, net finance items, depreciation and amortisation as adjusted in order to present a figure which reflects the directors' assessment of the result for the ongoing business activities of the company.

Page 3

distributed by