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


Abano says first-half profit may fall

Abano says first-half profit may fall as dental acquisitions take longer to settle

By Paul McBeth

Nov. 15 (BusinessDesk) - Abano Healthcare Group says first-half profit may fall because recent dental clinic acquisitions across the Tasman won't deliver immediate gains and the relocation of its biggest Lumino practice attracted some costs.

The Auckland-based dental and radiology investor expects net profit attributable to shareholders of between $5.4 million and $6.2 million in the six months ending Nov. 30, compared to $5.9 million a year earlier. That guidance includes Abano's decision to accelerate depreciation after relocating its biggest Lumino dental practice to a new location in Auckland early next year, a $160,000 loss of the sale of a small lab, and an increased provision for deferred acquisition payments with newly acquired practices beat expectations.

It also accounts for the cost of several acquisitions that aren't expected to make full-year earnings contributions until the 2019 financial year.

Abano has been on an acquisition spree as it looks to build a trans-Tasman network of dental practices as it chases a 10 percent share of the $11 billion market to transform itself into a $1 billion revenue business.

"Abano's dental practice acquisition pipeline in Australia remains strong and the company is taking advantage of this to increase its acquisition rate above previous years," chief executive Richard Keys said in a statement. "Several larger acquisitions, with a corresponding higher purchase price, have settled later in the first half than anticipated and several more are expected to settle in upcoming months."

Abano's optimism shows up in its forecast for underlying profit, its preferred measure stripping out accounting adjustments and asset sale gains and losses, which is expected to rise to between $6.3 million and $7.1 million in the half from $6.3 million a year earlier. Revenue is predicted to be between $130 million and $135 million, up from $116.8 million a year earlier.

The company's dividend policy is based on underlying profit, and it expects to pay 16 cents per share, unchanged from a year earlier despite the larger share base from its recent one-for-five rights offer.

Keys said the dental practices generated same-store sales growth of 1.2 percent in New Zealand, although Australia's same-store sales fell 2.2 percent in "challenging and volatile economic conditions" and the firm is investing in marketing, technology and branding to lift the performance across the Tasman.

The radiology unit performed well, lifting revenue and earnings, he said.

Abano shares last traded at $9.77 and have gained 21 percent so far this year, outpacing the 12 percent gain on the S&P/NZX All Index over the same period.



© Scoop Media

Business Headlines | Sci-Tech Headlines


Stats NZ: Consents For New Homes At All-Time High

A record 41,028 new homes have been consented in the year ended March 2021, Stats NZ said today. The previous record for the annual number of new homes consented was 40,025 in the year ended February 1974. “Within 10 years the number of new homes ... More>>

Stats NZ: Unemployment Declines As Underutilisation Rises

The seasonally adjusted unemployment rate decreased to 4.7 percent in the March 2021 quarter, continuing to fall from its recent peak of 5.2 percent in the September 2020 quarter but remaining high compared with recent years, Stats NZ said today. ... More>>


Digitl: The Story Behind Vodafone’s FibreX Court Ruling

Vodafone’s FibreX service was in the news this week. What is the story behind the Fair Trading Act court case? More>>

Reserve Bank: Concerned About New Zealand's Rising House Prices

New Zealand house prices have risen significantly in the past 12 months. This has raised concerns at the Reserve Bank of New Zealand – Te Putea Matua about the risk this poses to financial stability. Central banks responded swiftly to the global ... More>>

Westpac: Announces Strong Financial Result

Westpac New Zealand (Westpac NZ) [i] says a strong half-year financial result has been driven by better than expected economic conditions. Chief Executive David McLean said while the global COVID-19 pandemic was far from over, the financial effect on ... More>>

MYOB: SME Confidence In Economic Performance Still Cautious

New insights from the annual MYOB Business Monitor have shown the SME sector is still cautious about the potential for further economic recovery, with two-in-five (41%) expecting the New Zealand economy to decline this year. The latest research ... More>>