Abano Interim Results 2008

Listed healthcare investor and operator, Abano Healthcare Group, today reported its results for the six months to 30 November 2008, meeting its earlier guidance with a net profit after tax of $4.1 million.

The results, based on unaudited management accounts for the six months ended 30 November 2008, show revenues of $86.1 million, Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) of $14.4 million and Net Profit After Tax (NPAT) of $4.1 million.

All sectors within Abano’s healthcare and medical services portfolio performed well and delivered improved operating profits during the six month period. The full contributions from several recent investments and new initiatives will only impact in the second half of the year, and indeed some will not be fully evident until the 2010 financial year.

The company’s acquisition and expansion programme continued to track to plan, with growth of Abano’s audiology businesses in New Zealand and Australia, the acquisition of a specialist radiology business in Auckland and entry into the Australian dental market through a new dental business, as well as the announcement of the planned entry into the Asian audiology market.

Chairman, Alison Paterson, commented: “It has been a pleasing first half year performance for Abano, particularly given the deteriorating economic climate. Our businesses delivered good results and continue to display long term potential for continued growth.

“Our strategy remains to focus on those healthcare sectors where there is a proven track record and identified opportunities for continued growth, particularly in dental, audiology and radiology.

“Although some planned and originally forecast acquisitions have taken longer than expected to settle, good progress has been made with other business areas and acquisitions in the past six months.

“In the first six months of the 2009 financial year, we acquired seven dental practices in New Zealand, increasing the Lumino The Dentists network to 40 practices nationwide. In July 2008, we entered the Australian dental market through Dental Partners and have grown this network to 15 practices in the past few months.

“In audiology, we have opened or acquired 11 new clinics in New Zealand, taking the Bay Audiology to 63 clinics nationally. Bay Audio in Australia has also continued its growth and now totals 51 permanent and satellite clinics in Southern Queensland and Northern New South Wales.

“At our annual meeting in November, we also announced our planned expansion into the Asian audiology market. In December, we settled our initial acquisitions of four clinics in Singapore and two clinics in Hong Kong.

“The company’s balance sheet has been used more efficiently to fund growth, and long term banking arrangements are in place with ASB Bank in New Zealand and its parent, CBA in Australia. While we have sufficient funding and facilities in place to meet our strategic growth objectives, we will be reviewing our debt equity ratios going forward to ensure we maintain a prudent level of borrowings.

“Although healthcare is reasonably protected from economic changes, we are mindful that the extent of the downturn is unprecedented and it represents a material risk factor for all New Zealand businesses. There are some areas of private discretionary healthcare spend which may be affected and where consumers may elect to delay their healthcare decisions or opt for a lower value solution.”

The Abano board has declared a fully imputed interim dividend of 9c per share, maintaining the Group’s policy of distributing 50 percent of NPAT. The record date will be 16 January 2009, with a payment date of 23 January 2009.

Additionally, the Abano board today also announced the appointment of a new independent director.

Alison Paterson said: “With Abano’s significant expansion in both size and geographical scale over the past 24 months, the board determined that the appointment of a further independent director would be appropriate.

“We are pleased today to announce the appointment of Mr Danny Chan as an independent director. Danny replaces Graeme Edmond who retires at the end of December 2008.

“Danny is an experienced New Zealand director with an Honours degree from Victoria University. His other directorships include AgResearch Limited, Academic Colleges Group Limited and Guardall N.Z. Limited as well as numerous companies associated with his private investments both in New Zealand and throughout Asia.

“Danny was selected following a rigorous independent search project. His detailed commercial expertise in Asia, along with his extensive accounting, finance and investment management experience will greatly assist the board as we expand our business into this region.”