Abano first-half profit falls on expansion costs; sales rise

Tuesday 20th December 2011

Abano Healthcare, which invests in specialist health clinics, confirmed its weaker-than-expected first half-profit, down $1.5 million from $2.8 million, even as sales lifted 18 percent, after it acquired dental practices in New Zealand and Australia.

The company’s first-half revenue was $102.0 million, which is right in the middle of the $101.5 million to $103.5 million forecast last month, up from $86.7 million a year earlier. Its underlying net profit, which strips out accounting changes and acquisition costs was $1.3 million, down from $2.8 million a year earlier. Earnings per share were 3.62 cents from 10.51 cents in the same period last year.

“We have focused on growth, particularly in dental where we acquired 20 dental practices with over $28 million in annualised revenue added in Australia and New Zealand in the first six month period,” said Alan Clark, managing director. “Our Radiology group saw improving demand across all modalities with good growth over last year’s results. Our Orthotic Group also grew with the new lower South Island contract, and our pathology and brain injury businesses produced steady results.”

The loss in income comes from the sale of National Hearing Care in December 2010, ongoing investment in IT infrastructure, and facility fees associated with an additional debt facility in Australia, Clark said.

The health clinic investor expects rapid growth beyond this year as governments look to private healthcare providers to mop up excess demand, and is also looking to grow offshore sales to account for at least half of its revenue by 2015.

Abano will pay an unchanged interim dividend of 7.3 cents per share on Jan. 27.

Abano shares rose 3.8 percent to $3.80 though on trading of just over 1,000 shares. They have been trending lower since hitting $6.80 in September 2009.

BusinessDesk.co.nz

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