Abano 2013 Market Guidance
26 March 2013
Listed healthcare investor and operator, Abano Healthcare Group, has today provided guidance for the financial year
ending 31 May 2013.
Listed healthcare investor and operator, Abano Healthcare Group, has today provided guidance for the financial year
ending 31 May 2013.
Following the divestment of Abano Rehabilitation in June 2012, the company expects reported consolidated revenues to
grow to between $207.0 million to $209.0 million (1), with an Earnings Before Interest, Tax, Depreciation and
Amortisation (EBITDA) of between $27.5 million to $28.5 million and a Net Profit After Tax (NPAT) of between $2.3
million to $2.8 million. Underlying EBITDA (3) is expected to be between $28.3 million to $29.3 million, resulting in an
underlying NPAT of between $4.1 million to $4.6 million.
Abano has continued its growth and investment strategy, with a particular focus on its accelerated dental acquisition
programme in New Zealand and Australia, and investment into its Auckland-based radiology business.
The dental businesses remain the primary revenue generators for Abano with same store sales continuing to grow in New
Zealand, buoyed by the ongoing Lumino television campaign, while Australia has seen a slowing in growth in line with the
softening Australian economy. Overall, earnings from the dental businesses continue to grow in conjunction with the
accelerated acquisition programme, with increasing returns and margins as each new acquisition is acquired, due to the
size and scale of the dental network.
During the financial year to date, 22 practices have been acquired, growing the trans-Tasman network to 139 practices,
with a further three acquisitions expected to settle by the end of the financial year. However, the timing of
settlements over the next few months means that the overall dental acquisition rate for the financial year will be lower
than planned, with several acquisitions now scheduled for early in the new financial year. The availability of
attractive practices and clinician interest in joining Abano’s dental network remains strong, with a solid pipeline of
acquisitions planned.
In February 2013, Abano refinanced its existing Australian debt facilities with ASB Bank, and improved both pricing and
tenure. These facilities are in place to support the accelerated acquisition strategy for the Australian dental
business.
Radiology is also an important revenue contributor for the Abano Group and the official opening of the new, state of the
art, Insight+Ascot Radiology clinic at the Millennium Institute in February 2013 was a recent highlight. The clinic
opened later than originally planned, with the co-located orthopaedic group, an important referral base, also moving
into the premises later than expected. Abano has invested heavily into radiology in the past two years, and along with
the PET CT scanning centre which was opened in 2011, this new clinic is at an early establishment period with
significant mid to long term benefits expected.
Audiology in Australia and South East Asia remains in an investment phase with progress being made in Australia and
Taiwan, but sluggish sales continuing in Singapore and Hong Kong as previously indicated. A break even EBITDA result is
still forecast to be reached in two to three years’ time. Abano’s annuity businesses in pathology and orthotics have
performed well and both are forecast to produce solid results in their constrained DHB contracting environments.
Managing director of Abano, Alan Clarke, commented: “Our businesses have performed well to date in a difficult economic
environment, with growth through both acquisition and organic expansion.
“Regional economic conditions and consumer confidence and spending, particularly in Australia following the announcement
of the election remain difficult however, with no evidence of any significant or lasting improvement. Changes to private
healthcare insurance rebates and dental subsidies in Australia have also recently been announced, and we are monitoring
any impact carefully.
“Abano has a proven strategy and an experienced management team supported by over 1,700 professional and highly skilled
staff and clinicians. We expect to see strong growth continuing as we reap the benefits of the acquisitions and
investments made over the last few years.”
The Abano Board has reconfirmed its expectation to maintain the 2013 dividend at 21 cents per share.
ENDS