2012 Annual Report

THE FACTS

  • 100% ownership by Abano
  • Growth Strategy
  • 64 practices across New Zealand
  • 519 staff including 240 clinicians

YEAR IN REVIEW

The economic climate is still very challenging for the New Zealand dental sector.  Consumer confidence is low, and the discretionary dollar is still tight. The Lumino team are working on encouraging people to place a higher priority on their oral health, with more ongoing patient education on the benefits of regular preventative maintenance.  New tools have also been introduced, such as 18 months interest free, to help increase the affordability of dentistry for patients.

During FY12, the focus was on driving organic growth through new patients, increased patient visits and improved utilisation of dentist time.  The nationwide marketing campaign proved very successful in achieving this growth, and Lumino recorded a strong second half performance.

FY12 Highlights

  • Acquired nine new practices during the financial year, providing an additional $4.8 million in annualised revenue
  • Achieved same store sales of 5% growth over last nine months of 2012 financial year in response to the success of our marketing campaigns (compared with  flat to negative same store growth since the start of the recession in FY2009)
  • New patient numbers increased by 13% in FY12 (compared with a flat to  negative trend since the recession)
  • Increased brand awareness to just under 60% - a 10 fold increase in three years
  • Implementation of the new IT systems and data-warehouse to increase reliability of financial reporting and to provide greater management reporting information
  • Continued retention of the majority of dentists completing their earn-out period.

LOOKING FORWARD

The future for Lumino the Dentists is very exciting.  The positive trend in same store revenue is expected to continue over the next twelve months,  and strong growth will be generated over the next three years when and as consumer confidence rebounds.

Historically, the focus has been on acquiring practices where the owner/dentist continues working. However, off the back of Lumino’s successful dentist recruitment program, the scope has now broadened to include practices where dentists are retiring/selling.  In general, these ‘quasi greenfield’ practices can be acquired without paying any significant goodwill, and are then relaunched as Lumino practices with a new Lumino-recruited dentist at the helm.  While these acquisitions tend to be smaller and initially slightly more resource hungry, they can offer high returns.

The primary competition to the corporate consolidation model is still the traditional route of individual ownership of dental practices. Lumino’s goal is to offer real tangible alternatives to counter the strengths of private ownership and to encourage more dentists to sell their practices to Lumino or secure associate dentists before they go down the path of private ownership.

Goals FY13

  • Continue positive same store revenue and EBITDA growth
  • Continue with an effective national TV  campaign which lifts brand awareness levels and drives new patient numbers nationally, with targeted regional and local initiatives to drive patients to targeted practices
  • Continuation of the online and website campaigns
  • More effectively work the existing database through the use of call centres and new technologies (CRM system)
  • Maintain an acquisition growth rate of at least eight standard sized acquisitions per annum.