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ABANO HEALTHCARE

IRG

Friday 22nd March 2013

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Abano Healthcare Group Limited is a healthcare and medical service provider. It operates in four segments: dental, diagnostics, rehabilitation and audiology. Some of its well-known businesses are Lumino The Dentists in NZ and Dental partners in Australia, Aotea Pathology, and Ascot Radiology. It also owns Insight Radiology, a specialist obstetric ultrasound practice. Abano entered the audiology market with the acquisition of Bay Audiology and the orthotics market with the acquisition of Orthotic Centre.

 

Key Statistics

Issue:                   17.1 Mn

Market Cap:        $112 Mn

PE Ratio (ttm):           33.9

EPS (ttm):               19.32c

Div (ttm):                     21c

Div Yield (ttm):       3.22%

NTA:                    -302.05c

 

Performance

For the six months to 30 November 2012, Abano Healthcare Group reported unaudited revenues of $107.9 million. This was up 6% on the previous year, reflecting the change in the contracting basis for Australian dentists. Earnings Before Interest, Tax, Depreciation and Amortization (EBITDA) were $14.8 million (up 26% on a comparable basis) and Net Profit After Tax (NPAT) was $1.5 million (up 160% on a comparable basis).

 

Outlook

ABA expects the strategies implemented will continue to benefit and will be evident during the second half of the year and into FY14. While economic conditions in the Australasian region remain difficult, ABA expects improved trading in dental on both sides of the Tasman, and believes it will continue to deliver growth and improving profit results. ABA will focus on dental in New Zealand and Australia, radiology in New Zealand, and their emerging audiology network in Australia and South East Asia. ABA also believes their business will get further boost from their orthotics and pathology businesses.

 

It has been a pleasing first half year for the Group, as they continue the roll out of their successful, long term growth strategy. The businesses performed well over the period, and the company generated strong earnings growth. ABA is receiving some of the early benefits from their accelerated dental acquisition programme and their investment into dental and radiology businesses during FY12 and the first six months of FY13. These benefits will continue to be evident during the second half of the year and into FY14. ABA’s share price has increased by 58.07% in the last one year and is also rated BUY according to analyst rating compiled by Reuters.

DISCLAIMER: To the extent that any of the content above constitutes advice, it is general advice that has been prepared without reference to investor’s objectives, financial situation or needs. Before acting on any advice, investors should consider the appropriateness of the advice and IRG recommend that investors should obtain appropriate financial, legal and taxation advice before making any financial investment decision. The report is based on information compiled from public information and private research. IRG have completed the report on a best endeavours basis and do not accept any liability of loss or damage. IRG suggest that clients use this as part of a decision making process and check key data before making any investment decisions.
Employees may have an interest in the securities discussed in this report.

Bond Offer: Infratil Ltd, 7.2 year & 10.2 year unsecured unsubordinated bond


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