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Abano earnings fall; company to return $27.3M

Abano earnings fall after sale of Bay Audiology, to return $27.3M to shareholders

Dec. 21 (BusinessDesk) - Abano Healthcare Group, the specialist health clinic investor, reported a drop in first-half profit, reflecting the absence of revenue from the Bay Audiology business sold last year. The company is to return $27.3 million to shareholders via a compulsory 1-in-4 share cancellation.

Underlying profit fell to $2.8 million in the six months ended Nov. 30, from $3.4 million a year earlier, the company said in a statement today. Sales declined to $86.7 million from $102.3 million.

The capital return marks Abano’s second in as many years. It sold the Bay Audiology business in New Zealand last year for $76.6 million and handed the proceeds back to investors via a special dividend. The company’s debt “remains very modest” at a 19% net debt to net debt plus equity ratio and it has sufficient debt facilities to expand in dentistry, audiology and radiology, it said.

“Economic and trading conditions remained challenging during the first half of the year and consumer and business confidence is still going down in the second half,” said chairman Alison Paterson.

“While healthcare is relatively protected from economic downturns, many areas of our group are still dependent on discretionary healthcare spending and both the Australian and New Zealand economies remain very sluggish,” she said.
Shares of Abano fell 0.4% to $4.85 and have declined 22% this year.

The company maintained its first-half operating dividend at 7.3 cents a share as part of a policy to make payments totaling 21 cents this year. It suspended the dividend reinvestment plan for the interim payment.

The company will recognize a one-off cost in the second half to reflect its decision to relocate regional audiology offices to Hong Kong from Singapore and from Brisbane to Sydney to be closer to major markets, it said.

Abano will give full-year guidance in March next year, it said.


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