Abano turns to 2016 annual profit after selling stake   27 Jul 2016

Wednesday 27 July 2016 09:53 AM

Abano turns to 2016 annual profit after selling audiology stake

By Tina Morrison

July 27 (BusinessDesk) - Abano Healthcare, the Australasian radiology and dental centre operator, turned to an annual profit after selling its half stake in audiology investor Bay International and expanding its dental chain.

The healthcare investor posted a profit of $28.4 million in the year ended May 31, boosted by a $20.2 million gain on the sale of its Bay International stake, it said in a statement. That compares with a loss of $1.3 million a year earlier, or a $4.5 million profit including only continuing businesses. The latest results exclude earnings from its pathology and orthotics businesses which it divested in the 2015 year. Underlying profit, which excludes one-time items, was $8.8 million, within the company's forecast of between $8.2 million and $9 million.

Annual revenue of $213.7 million compares with the previous year's $187.6 million from continuing businesses or $222.2 million including divested businesses, it said.

Abano is investing to grow its chain of dental businesses in a fragmented market across Australia and New Zealand, where it aims to capture 10 percent of the estimated $11 billion of revenue where it sees increased demand. Last year, it acquired 18 practices which are expected to add about $28 million to annual revenue, opened a new practice in Christchurch and merged several practices. As at May 31, the company had 188 practices generating annualised gross revenue of more than $254 million, and is acquiring a new practice every two to three weeks.

"Our strategy is to build our networks through organic growth and the acquisition of quality dental practices, grow our market share and benefit from economies of scale," said chief executive Richard Keys. The company is "well positioned to continue growing our businesses and increasing their earnings".

Its dental unit, which at May 31 included 102 Lumino The Dentists practices in New Zealand and 86 Maven Dental Group practices in Australia, increased operating profit 18 percent to $19.4 million as revenue lifted 15 percent to $198.7 million.

While the New Zealand dental business achieved 2.7 percent growth in same-store revenue, the Australian business had a 3.6 percent decline and the company said several initiatives were underway to boost performance.

Operating profit declined at its diagnostics unit to $491,000 from $5 million a year earlier. The unit only includes its Ascot Radiology clinics in Auckland after Aotea Pathology was sold in May 2015.

The company will pay a final dividend of 20 cents per share on Aug. 22, taking the annual dividend to 30 cents, up from 25 cents a year earlier.

The shares last traded at $7.98 and have gained 5.2 percent so far this year.

(BusinessDesk)

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