Abano dental acquisition and release date of interim result

Abano extends dental business and advises it will release un-audited results for the first six months, early next week.

Abano Healthcare Group is continuing its expansion strategy for its Lumino dental business, with the fourth dental practice acquisition in recent weeks.

Well respected dental business, Burton and Brown in Wellington’s CBD, is the seventh practice to be acquired by Lumino in the first six months of the 2008 financial year and is expected to contribute $1.5 million annually to the turnover of the Lumino Dental group.

Managing director, Alan Clarke, said: “The Lumino network continues to grow strongly. Historically, Lumino Dental has acquired six practices a year and we were expecting to increase this to between 8 and 10 practices during this financial year. However, based on our current acquisition rate in the first half of the financial year, and the increasing number of opportunities under review, we now believe that we will exceed this target.”

Lumino Dental has now added more than $6.5 million in annualised revenue from new acquisitions in 2008 and is well on target to achieve its total forecasted revenue for the year of approximately $27 million, over 35% higher than the 2007 financial year.

Alan Clarke commented: “This acquisition continues the Lumino Dental growth strategy, as we build towards our target of 40 practices by 2009.  Acquisitions are providing an average EBITDA to revenue contribution of over 20% and this is a key driver in increasing the consolidated earnings margin of the Abano Dental sector.

“As previously advised, with acquisitions providing an EBITDA return on invested capital in excess of 25%, and increasing margin growth, we expect to see Abano’s Dental sector’s return on invested capital migrate towards the target of between 15 and 25 percent.”

The Lumino Care Dental network now has 30 practices around New Zealand, including two mobile buses, and the recent amalgamation of its two Takapuna practices onto one site.

Alan Clarke continued: “Lumino is the largest private provider of dental care in New Zealand with 30 practices around the country. It has no direct competitors of this scale, with the majority of dental practices in New Zealand still individually owned or consolidated into small groups of three or four practices.

“We are focused on acquiring high quality dental practices led by well respected principal dentists, with strong customer bases.  A consumer marketing and brand awareness programme will be rolled out in coming months as we undertake to make Lumino the most well known and preferred dental brand in the country.”

Burton and Brown is a high end dental practice located in the Harbour City Tower, in Wellington’s CBD, where it has been operating for over 10 years.   Both lead dentists, Dr. John Burton and Dr Andrew Brown, are highly experienced and well regarded within the industry.   John was recently President of the Wellington branch of the New Zealand Dental Association and Andrew, who holds an MBA from Henley, was the Treasurer.

In addition, the Abano board reiterated their advice to shareholders not to accept the Masthead offer and the board indicated that it would be releasing the un-audited results based on management accounts, for the first six months trading ended 30 November 2007, early next week.