Abano Healthcare end of year results to 31 May 2005

Media Release

Abano Healthcare Group Limited today announced its full year results for the financial year ended 31 May 2005, with increased Group revenue, decreased debt and a small net loss after tax of $38,000.

The focus for Abano’s board and management for the past year was to strengthen the Group’s business portfolio to generate a higher return on invested capital, by implementing an appropriate financial and capital structure and securing experienced management and executive personnel to lead the Group forward.

Over the year, the value of the Group’s portfolio was improved by the acquisition of new businesses offering higher returns, and following a strategic review, a decision was taken to divest ElderCare, the Group’s aged care business, as it no longer met Abano’s investment criteria.

The Group’s capital structure was strengthened during the year with a placement to RECT Funds Management. In addition, a 1:10 share consolidation was undertaken to allow a more meaningful analysis of the company, particularly financial performance on a per share basis.

Debt reduced from $36.4 million to $34.0 million, with a corresponding drop in interest costs.

The audited results for the year showed revenues increasing to $66.7 million, up from $64.9 million in the previous year, and earnings before interest, tax, depreciation and amortisation (EBITDA) up to $7.6 million compared with $6.8 million for the same period last year.

Results were at the higher end of the forecast provided by the Group in May 2005, and Abano reported a small net loss after tax of $38,000 compared with a loss of $0.5 million for the same period last year.

Revenue from both Abano Diagnostics and Abano Dental was slightly up on the previous year, with a four month contribution from Ascot Radiology, and benefits from dental practices acquired in December 2004 and February 2005.

Abano Rehabilitation was down on the previous year as restructuring and contract negotiations with ACC continued. An improved future earnings stream is expected as the contracting environment settles. Revenue in the aged care sector increased as benefits were realised from facility refurbishments, upgrades and extensions carried out in the past two years.

Since year end, the board of Abano has progressed a number of decisions and taken actions which will impact positively on the Group’s future return on investment. These include the settlement of the ElderCare sale and an exit from the aged care market.

In addition, the company announced the conditional acquisition of 70 percent of Bay Audiology Limited and entry into the audiology sector, planned to occur in October 2005. Two dental practices were also acquired in the Waikato region as part of the growth strategy for Abano’s dental network, Lumino.

Managing director of Abano Healthcare, Mr Alan Clarke, said:

“The past year at Abano has seen a lot of important changes, as we focused on generating a higher return on our funds invested across the Group, and continued to build a strong portfolio of healthcare businesses. We look forward to the future with confidence in our strategy and in our ability to deliver.”

Abano Healthcare Group has today announced that the 2005 annual meeting will be held at 10.30am, Friday 23 September in the Pakuranga Hunt Room, Ellerslie Convention Centre in Auckland.

For more information, please contact:

Alan Clarke
Managing Director, Abano Healthcare Group Limited
Tel: 09 3610482 Mob: 021 368 818