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Abano meets guidance with first-half earnings

Abano meets guidance with first-half earnings after sale of pathology, orthotics

By Jonathan Underhill

Dec. 21 (BusinessDesk) - Abano Healthcare, the listed medical and dental centre investor, posted first-half profit that met its guidance after the sale of its pathology and orthotics businesses a year earlier.

Profit was $3.4 million in the six months ended Nov. 30, down from $3.5 million a year earlier, the the Auckland-based company said. Revenue fell to about $108 million from $114.9 million.

The profit was within the company's guidance range of between $3 million and $3.6 million given at the annual meeting on Nov. 2. Abano sold its orthotics business in November 2014 and exited its Aotea Pathology unit after quitting the lower North Island district health board tender process. The sale meant 60 percent of gross revenue would be generated offshore, especially in Australia, where the company faced headwinds from a slower economy.

Revenue growth was driven by Abano's expanding dental business, while the company reported improvement for its audiology joint venture and a stable performance from radiology.

"We are well on our way to building one of the largest dental organisations in the region, with two well-resourced and growing dental networks, totalling 181 dental practices and generating in excess of $245 million in gross annualised revenues," said chief executive Richard Keys, who was appointed to the top job in June after 13 years at the company, most recently as chief financial officer.

The company acquired nine dental practices in the first half, which are expected to add about $15 million of annualised gross revenue, he said.

Abano said it achieved 2 percent same-store growth at its Lumino the Dentists chain in the first half. "However, we are facing more challenging economic conditions in Australia, particularly in Queensland where 41 percent of our practices are based," Keys said. "These Queensland practices are offsetting the positive same-store growth we are achieving with our practices in all the other (Australian) states, with an overall drop in same-store sales for Maven Dental Group of 3 percent for the six-month period."

It opened five greenfield audiology stores in Australia and said it has put the Asia audiology network "under the oversight of our experienced Australian management team".

The company didn't give full-year guidance. It is "well positioned" to reach its target of 10 percent of the $11 billion trans-Tasman dental market.

"Our focus continues to be on expansion through dental practice acquisitions and the opening of greenfield audiology stores as well as realising existing opportunities for organic growth within each of our businesses," Keys said.

The company will pay a first-half dividend of 10 cents a share on Jan. 22 with a record date of Jan. 11, unchanged from a year earlier.

The shares were unchanged at $7.90 and have gained 1.9 percent this year.


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