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Abano back in profit after sale

NZ NewswireNZ Newswire 26/07/2016 Tina Morrison

Australasian radiology and dental centre operator Abano Healthcare has turned to an annual profit after selling its half stake in audiology investor Bay International and expanding its dental chain.

The healthcare investor posted a profit of $28.4 million in the year ended May 31, boosted by a $20.2m gain on the sale of its Bay International stake, it said.

That compares with a loss of $1.3m a year earlier.

The latest results exclude earnings from its pathology and orthotics businesses which it divested in the 2015 year.

Underlying profit, which excludes one-time items, was $8.8m, within the company's forecast.

Abano is investing to grow its chain of dental businesses in a fragmented market across Australia and New Zealand, where it aims to capture 10 per cent of the estimated $11 billion of revenue where it sees increased demand.

Last year, it acquired 18 practices which are expected to add about $28m to annual revenue, opened a new practice in Christchurch and merged several practices. As at May 31, the company had 188 practices generating annualised gross revenue of more than $254m, and is acquiring a new practice every two to three weeks.

"Our strategy is to build our networks through organic growth and the acquisition of quality dental practices, grow our market share and benefit from economies of scale," said chief executive Richard Keys.

The company will pay a final dividend of 20 cents per share, taking the annual dividend to 30 cents, up from 25 cents a year earlier.

The shares last traded at $7.98 and have gained 5.2 per cent so far this year.

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