End of year results 31 May 2004
Abano Healthcare Group Limited today announced its full year results for the financial year ended 31 May 2004, with increased Group revenue, lower interest costs and expansion of Abano Rehabilitation. The audited results for the year showed revenues increasing to $64.9 million, up 11 percent from the previous year ($58.3 million), but core Earnings Before Interest, Tax and Depreciation (EBITDA) falling to $7.1 million ($8.5 million in the last period). A Net Loss After Tax of $0.45 million.
INCREASED TURNOVER IN A CHALLENGING ENVIRONMENT
Abano invests in improved delivery systems to meet changing market needs.
Abano Healthcare Group Limited today announced its full year results for the financial year ended 31 May 2004, with increased Group revenue, lower interest costs and expansion of Abano Rehabilitation.
The audited results for the year showed revenues increasing to $64.9 million, up 11 percent from the previous year ($58.3 million), but core Earnings Before Interest, Tax and Depreciation (EBITDA) falling to $7.1 million ($8.5 million in the last period).
A Net Loss After Tax of $0.45 million was reported, including a $0.33 million write down following the closure of the Australian dental operation and discontinued project costs. This compares to a posted Net Profit After Tax of $2.0 million in the previous year, which included one-off gains of $1.3 million.
The decreased profit performance, as forecast, was the result of reduced occupancy and increased staff costs in Abano Aged Care, and decreased referrals and contract rates for long term clients in Abano Rehabilitation. Abano Dental, following a year of investment in new software systems, marginally improved its performance and Abano Diagnostics was flat on last year’s result.
Interest costs were down following the conversion of the Cullen Investments and Medical Laboratory convertible notes. Depreciation and amortisation expenses increased, due to a full year of the Geddes acquisition and following the acquisitions of Burtons Healthcare and Health Partners during the year.
The Group’s focus for the past year has been on restructuring and strengthening the infrastructure of under-performing business units and significant investment has been made in management processes, technology and facility upgrades across the Group. All businesses now have stable management teams and operational structures, resulting in more responsive and cost effective delivery systems.
Abano Aged Care focused on improving and upgrading facilities and services over the year, and further developed its highly regarded Clinical Career Pathway programmes, as well as continuing the successful Promoting Independent Living Study research with the University of Auckland. The two year programme to achieve ISO 9001:2000 across the Aged Care sector was completed, along with full Health and Disability Standards certification.
In Abano Dental, a number of key investments were made in the year, including the implementation of a new software database and customer management system, and investment in upgrading surgery technologies and equipment at several branches. Following a careful review of Geddes Dental Group’s Australian activities, a decision has been taken to close the Melbourne clinics and concentrate the sector’s efforts on developing the New Zealand dental market. As a consequence, the accumulated losses and liabilities have been fully written out in the current period.
Abano Diagnostics performed well over the year and results were consistent with the previous year. A new Pathologist-led management team has been appointed following the planned retirement of two senior clinicians, and the business will continue to identify and explore new areas of DHB community Pathology services and privately funded environmental testing..
The focus for Abano Rehabilitation in the past year has been on streamlining operations, developing synergies, improving IT functionality and driving earnings. A new senior management team was put in place and in-patient and out-patient services have been restructured across the sector, to provide back office synergies and improved management processes. In June 2003, the minority one-third interest in Ranworth Healthcare was acquired for $3.3 million, and Burtons Healthcare and Health Partners were acquired in July 2003 for $1.5 million.
Overall, the cost of retaining qualified staff and servicing the healthcare and medical market increased significantly in the past year, with higher wage and salary costs, changes in labour market legislation and contract rates, and increasing regulation and the cost of compliance in the Aged Care industry.
Managing director of Abano Healthcare, Mr Alan Clarke, said: “It has been a challenging year, with a disappointing bottom line result for the full period. However, a number of hard decisions have been taken to correct deficiencies and improve our performance into the new financial year. We have grown over the last three years and we are now consolidating and investing in our infrastructure to ensure we have the right organisational delivery systems to meet our clients’ changing needs.
“Our future focus lies in further improving our delivery systems and growing our presence in existing sectors, while continuing to seek new, high value opportunities within the healthcare and medical services market, where the benefits of our Group infrastructure can help to decrease costs, improve operational processes and drive increased returns and bottom line results”.
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