Allied Healthcare International Inc. (Nasdaq: AHCI; AIM: AHI, http://www.alliedhealthcare.com), a leading provider of flexible healthcare staffing services in the United Kingdom, has commenced the implementation of a prestigious new two-year contract with Surrey County Council in the United Kingdom.

Under the new Surrey contract, Allied has the opportunity to deliver up to 3,500¹ hours of home-based care services a week (168,000¹ hours a year) as primary provider in the council™s largest geographical area, covering Epsom & Ewell. A further vote of confidence was given by the Council, when Allied was also awarded secondary provider in six out of the remaining seven zones “ as one of only four other providers in each zone.

We are very pleased to have been awarded such a prestigious contract and are looking forward to building on our existing relationship with Surrey Council, said Sandy Young, Allied Healthcare Chief Executive Officer. Our immediate priority will be to maximize our capacity over the next sixteen weeks, to enable the Council to transfer all care packages to the experienced hands of our local delivery teams in Woking, Croydon & Crawley. Our focus will be to ensure absolute continuity of care, thus securing confidence from every stakeholder during this phasing in period.

The Surrey County council contract will run until 2010.

(1) Hours opportunity is based on the existing care provision under the jurisdiction of the contract (as laid out by the tender specification) and may be subject to change.

ABOUT ALLIED HEALTHCARE INTERNATIONAL INC.

Allied Healthcare International Inc. (http://www.alliedhealthcare.com) is a leading provider of flexible healthcare staffing services in the United Kingdom. Allied operates a community-based network of approximately 100 branches with the capacity to provide carers (known as home health aides in the U.S.), nurses, and specialized medical personnel to locations covering approximately 90% of the U.K. population. Allied meets the needs of private patients, community care, nursing homes, and hospitals.

FORWARD-LOOKING STATEMENTS

Certain statements contained in this news release may be forward-looking statements. These forward-looking statements are based on current expectations and projections about future events. Actual results could differ materially from those discussed in, or implied by, these forward-looking statements. Factors that could cause actual results to differ from those implied by the forward-looking statements include: Allied™s ability to continue to recruit and retain qualified flexible healthcare staff; Allied™s ability to enter into contracts with hospitals, other healthcare facility customers and local government social services departments on terms attractive to Allied; the general level of patient occupancy at hospital and healthcare facilities of Allied™s customers; dependence on the proper functioning of Allied™s information systems; the effect of existing or future government regulation of the healthcare industry, and Allied™s ability to comply with these regulations; the impact of medical malpractice and other claims asserted against Allied; the effect of regulatory change that may apply to Allied and that may increase costs and reduce revenue and profitability; Allied™s ability to use net operating loss carry forwards to offset net income; the effect that fluctuations in foreign currency exchange rates may have on our dollar-denominated results of operations; and the impairment of goodwill, of which Allied has a substantial amount on the balance sheet, may have the effect of decreasing earnings or increasing losses. Other factors that could cause actual results to differ from those implied by the forward-looking statements in this press release include those described in Allied™s most recently filed SEC documents, such as its most recent annual report on Form 10-K, all quarterly reports on Form 10-Q and any current reports on Form 8-K filed since the date of the last Form 10-K. Allied undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.

Allied Healthcare International Inc.
David Moffatt, Chief Financial Officer
London: 011-44-20-7838-9922
davidmoffatt@alliedhealthcare.com
or
The Investor Relations Group
Adam Holdsworth / Rachel Colgate/ Erica Ruderman
212-825-3210
or
Cenkos Securities plc (Nominated Advisor)
Ian Soanes
London: 011-44-20-7397-8924

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