2016 Annual Report

The Year In Review

It has been another year of positive change for Abano as we continued to refine and focus our business portfolio into sectors where we believe there is considerable potential for us to build scale and deliver significant value to our shareholders.

In the past two years, we have divested several businesses that were either outside our investment criteria or where we believed we could get better returns from investment into other areas. This has seen the sale of our pathology, orthotics and most recently, our audiology interests, leaving us with our dental and radiology businesses.

Dental is by far our largest opportunity. We have an active growth strategy to build scale through the acquisition of quality dental practices which are immediately earnings accretive, as well as organic growth and greenfield opportunities.

We are the second largest dental group in Australasia, with approximately 13% of the New Zealand market and 1.4% of the Australian market.

While there are several large dental groups all looking to gain market share, particularly in Australia, each has a different growth strategy, revenue model and business model. There are more than 14,000 dental practices across New Zealand and Australia, yet dental corporates own less than 5% of this total market.

The benefits of the corporate ownership model are becoming better known and accepted in the dental industry. There is significant room for dental corporates to continue their growth for many years to come and we expect to take a leadership role in this.

We also have a much smaller investment into the high end radiology market. Ascot Radiology provides a full range of diagnostic technologies including a range of leading edge services such as CT PET, MRI and breast imaging. Many of our clients are referred by specialist medical practitioners who appreciate the value these high end diagnostic tools can offer.

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