Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search


Abano shares rise 10% on dental sector consolidation

Abano shares rise 10% as dental sector consolidation shakes out interest

By Paul McBeth

July 1 (BusinessDesk) - Abano Healthcare shares rose 10 percent as the medical investor considers "various expressions of interest" as the Australian dental sector faces consolidation.

The stock climbed 35 cents to $3.85 in early trading, but has almost halved in value from the start of the year. Abano downgraded its annual earnings outlook in March due to challenging conditions across the Tasman and halted its acquisition of new dental practices there.

The company today reaffirmed that it isn't buying new practices in Australia, and will focus investment in New Zealand to grow its existing Lumino brand.

"Consolidation activity in the dental sector in Australia is ongoing. Abano has received various expressions of interest, which may offer strategic opportunities and value to shareholders," the company said.

"The board will evaluate these and the company’s participation, as part of its ongoing review of strategy, asset mix and capital structure. There is no certainty that any expression of interest will lead to a proposal for shareholders to consider or to any transaction, either in respect of Abano itself or the company’s businesses."

Abano is no stranger to merger and acquisition activity, fending off multiple attempts by former director and cornerstone shareholder Peter Hutson between 2013 and 2017, and early takeover bids by Crescent Capital in 2008 and the Christchurch-based Stewart family the year before.

Through that period, it built up and on-sold an audiology business and pared back its focus to the trans-Tasman dental sector, where it aspires to be the largest private provider in an $11 billion market that is currently fragmented.

The company today said preliminary earnings before interest, tax, depreciation and amortisation were $32.7 million in the year ended May 31, in line with the $32.4 million reported a year earlier and its March guidance for ebitda of $33 million.

Net profit was $10.1 million, including a $1 million writeback of an acquisition's earn-out, but before goodwill has been reviewed. Abano forecast profit of $9 million before reviewing goodwill, and reported $10.3 million a year earlier.

The board expects to declare a final dividend of 8 cents per share, taking the annual return to 24 cents. Abano paid 36 cents per share in annual dividends last year. Abano said it is working to improve the performance of its Maven-branded practices in Australia.

"This includes increasing clinical days by recruiting additional dentists to fill existing and future chair capacity, particularly in Australia. Underpinning all activity is the continuing commitment to delivering high-quality clinical care and an excellent patient experience," it said.


© Scoop Media

Business Headlines | Sci-Tech Headlines


Marine And Freshwater Reports: EDS Calls For Urgent Action On Marine Management

“There are some big issues to address. These include many marine species and habitats that are in serious trouble. Of the sample investigated, the report finds that 22% of marine mammals, 90% of seabirds and 80% of shorebirds are threatened with or actually at risk of extinction..." More>>


$7.5 Billion Surplus: Government Accounts "Show Strong Economy"

“The surplus and low levels of debt show the economy is in good shape. This allows the Government to spend more on infrastructure and make record investments in health and education,” Grant Robertson says. More>>


New OIO Application Trumps Judicial Review: OceanaGold Cleared To Buy Land For Waihi Tailings Expansion

In a surprise turnaround, the government has given OceanaGold a greenlight to buy land to expand its Waihi mine after the application was previously turned down by Land Information Minister Eugenie Sage. More>>


Christchurch Rebuild: Fletcher Sued For $7.5m Over Justice Precinct

Fletcher Building is being sued for $7.5 million by utilities contractor Electrix, one of the subcontractors on the Christchurch Justice and Emergency Services Precinct. More>>

Three New Drugs: PHARMAC Signs Bundle Deal For More Cancer Medicines

420 New Zealanders with lung cancer, breast cancer, multiple sclerosis and respiratory disease will benefit each year from a bundle deal PHARMAC has finalised with a medicine supplier. More>>