Abano FY08 Result Announcement
ABANO DELIVERS RECORD RESULTS FOR FY08
Abano Healthcare Group today announced a record net profit after tax (NPAT) of $7.8 million.
The result was a 56% increase on the previous year’s NPAT of $5.0 million and in line with guidance provided by the company of $7.9m in January. This result was after allowing for one-off non recoverable takeover costs of $0.5m (pre tax) as well as adjustments relating to foreign exchange movements and interest rate swaps, accounting estimates, capital gains and Australian tax, as will be detailed in the annual accounts.
Revenue for the year was $123.9 million, an increase of 38% year on year, with Earnings Before Interest, Tax, Depreciation and Amortisation up 68% to $23.3 million after allowing for the non recoverable takeover costs.
Abano’s improved performance was driven by increased returns from all sectors, supported by organic and acquisition growth, particularly in Audiology, Dental and Radiology. This growth is continuing as the company enters a new phase of expansion into overseas markets while continuing its development in the New Zealand market.
Chair of Abano, Alison Paterson, commented:
“In spite of several months of distraction from external corporate interest, the core business has continued growing and today we are pleased to announce a number of acquisitions and growth initiatives which have occurred in the first weeks of the current financial year, extending our businesses in both New Zealand and abroad.
“These include a key Australian audiology retail chain, two new dental acquisitions, entry into the Australian dental market and the opening of a new, state of the art radiology clinic, including specialist breast imaging.”
In audiology, Abano has increased its footprint in Australia, with the strategic acquisition of King Hearing from Siemens Hearing Instruments adding a further four permanent and 22 satellite clinics to the Bay Audio network. Queensland-based King Hearing is the first acquisition to be enabled through Abano’s new international partnership agreement with this highly respected hearing device manufacturer.
Bay Audio in Australia has taken over the Siemens retail chain, providing both parties with benefits. For Siemens, there is an opportunity to access the Bay network and audiology retail expertise and grow their market share. For Abano and Bay, this mitigates the risk of entering new markets.
In New Zealand, acquisitions and the opening of new audiology clinics in the 2008 financial year grew the total Bay Audiology network to 52 permanent and satellite clinics nationwide. In recent weeks, Access Audiology, a three clinic practice in Auckland run by well respected audiologist, Yve Pack, joined the group.
Abano’s dental sector demonstrated significant growth in both revenues and operating profit in the last financial year and is poised to be a strong contributor in the new financial year. New Zealand-based Lumino The Dentists expanded in line with the previously announced increased targets, with nine successful acquisitions during the financial year.
A recent acquisition, Dental Designs, is a dental laboratory specialising in making high end ceramic crowns and veneers for placement by cosmetic dentists. Dental laboratories are a vital component of the sector, providing a key service for dentists. Vertical integration of selected dental laboratories will enable Lumino The Dentists to capture a greater share of the margin generated from high value dental treatments.
These acquisitions increase the total New Zealand dental network to 33 clinics nationwide after the consolidation of several smaller clinics in 2008. A further eight to ten acquisitions are expected in the 2009 financial year.
In addition and as previously announced, Abano entered the Australian dental market in late June 2008 through a partnership with Dental Partners, with the initial acquisition of nine practices in Queensland, New South Wales and one cornerstone practice in Melbourne, with forecast annualised revenues of over A$15 million.
Up to 10 additional practices are expected to be added to the network by the end of the financial year. Dental Partners is expected to provide a positive operating NPAT contribution in the current financial year and this initiative is a carefully planned and low risk entry to the substantial Australian dental market.
Abano’s radiology business grew organically with the opening of a second clinic in the new Ascot Central medical building in Auckland in June 2008. With an investment of $7 million in the latest generation of diagnostic technology, the clinic provides a full range of radiology services as well as a new integrated breast imaging service alongside leading surgical specialists, Breast Associates, in new purpose built facilities. The growth of Abano’s Radiology sector is also planned to continue into the new financial year.
Alison Paterson said: “Based on current performance and the future outlook, the Directors’ expectation is that the Company will achieve an EBITDA of $28.9m for 2009 and an NPAT of $10.5m, as advised in the Independent Appraisal Report. We note however, that while Directors consider the company to be reasonably insulated from economic conditions, the extent of the current downturn must be regarded as a risk factor.
“On expiry of the Crescent bid, a delayed interim dividend of 13c per share was paid in April 2008 from the earnings of the first nine months of the 2008 financial year. Today the Abano Board has declared a fully imputed final dividend of 5c per share. This maintains the Group’s policy of distributing 50% of NPAT, (excluding one off takeover costs) and takes the total dividend paid by Abano this year to 18c per share.”
Managing director of Abano, Mr Alan Clarke, concluded: “It has been a very pleasing and positive year for Abano, with a record full year performance and significant growth. We will be continuing to focus on growing our audiology and dental businesses, both in New Zealand and now Australia, and our radiology business in New Zealand.
“Our clinical partnership philosophy and more recently, agreements with leading healthcare manufacturers, provide us with a strong growth platform and the ability to extend our businesses into new markets while mitigating expansion risks.“