AUSTRALIAN UNITY LIMITED — Interim / Quarterly Report 2012

Feb 27, 2012

ASX Announcement

Tuesday 28 February 2012

Australian Unity continues to demonstrate operational strengths in challenging environments.

In a challenging period of continuing global investment market and political instability, the Group recorded a profit after income tax of $5,948,000 for the half-year ended 31 December 2011 (2010: $11,094,000). The results include an increase in total revenues of some $33 million compared to the same period last year. These total revenues, however, were offset by rising expenses, including higher health insurance claims, and profit impacts from volatile investment and flatter property markets.

Through the period the Group incurred additional costs in continuing to develop its businesses in line with the company’s strategic plans. Investments in the businesses during the last six months included expanding the property funds management activities with the purchase of a business from the Investa Group, ongoing development of the allied health and community care services, and the widening of retirement village activities, including the acquisition of assets through the Australian Unity Retirement Village Property Fund. Additional financing costs were attributable to the issuing of Australian Unity Notes in April 2011, which was an important capital raising initiative designed to allow the company to invest in such opportunities.

ASX code: AYU

Notes on Issue: 1,200,000

Issuer: Australian Unity Limited ACN 087 648 888

Enquiries: Australian Unity Notes registry 1300 554 474

Contact details: Australian Unity Limited 114 Albert Road South Melbourne VIC 3205 Tel: 13 29 39

The company also undertook negotiations with Big Sky Credit Union and the Certainty Financial planning services group. Subsequent to 31 December 2011, Big Sky members voted strongly to join Australian Unity. Regulatory approvals have been received and the transaction will be effective at 1 March 2012. The negotiations with Certainty Financial resulted in Australian Unity acquiring a 70 percent interest in that business in January 2012. These two developments are planned to add significant sources of revenue and profit to the Group on an ongoing basis.

Group Managing Director Rohan Mead said Australian Unity’s mutual structure enabled it to continue to focus on reinvesting profits back into the company, even in times of economic uncertainty.

Company Secretary: Kirsten Mander 03 8682 6802

The listing of Australian Unity Notes on the ASX does not affect Australian Unity Limited’s status as a mutual organisation

ASX Announcement

“As a mutual we can take a longer view. Over the past few years of economic uncertainty, our business model has proved resilient and we remain committed to investing our profits into growing services for members and customers,” he said.

Mr Mead said Australian Unity’s Adjusted Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA)[1] , totalled $19.7 million for the halfyear ended 31 December 2011 (2010 $23.3 million), demonstrating the company’s continued resilience and its investment in growth opportunities.

Mr Mead said that the healthcare business had achieved a 42 percent increase in sales on the same period last year and continued its expansion into Queensland and New South Wales markets.

As a result of changed legislation, a means test on the Federal Government’s 30 percent rebate on private health insurance premiums and increases of the Medicare Levy Surcharge for high income earners who do not hold private hospital cover is expected to come into effect from 1 July 2012.

“The effects and the timing of those effects are as yet unknown. In part, this is because the mechanics of how the means test will operate, from a policyholder's point of view, have not yet been fully determined,” Mr Mead said.

ASX code: AYU

Notes on Issue: 1,200,000

Issuer: Australian Unity Limited ACN 087 648 888

Enquiries: Australian Unity Notes registry 1300 554 474

Contact details: Australian Unity Limited 114 Albert Road South Melbourne VIC 3205 Tel: 13 29 39

He said Australian Unity is preparing to respond to the new legislation and attendant regulation with a view to lessening any impacts arising from the changes to the regulatory regime.

“We remain firmly linked to some of the demographic trends creating the biggest challenges facing Australia and other nations. We are in a strong position to continue to identify and execute strategies to grow our businesses in line with growing customer needs for high trust products and services that support their wellbeing.”

ends

For media enquiries contact Australian Unity’s Communications Manager Gail Carland on 0429 187 105.

Company Secretary: Kirsten Mander 03 8682 6802

The listing of Australian Unity Notes on the ASX does not affect Australian Unity Limited’s status as a mutual organisation

1 This is the measure that is reported to the board to assess operating performance across Australian Unity’s business segments.