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Abano expects gain in annual earnings

NZ NewswireNZ Newswire 6/04/2016 Tina Morrison

Listed medical and dental centre investor Abano Healthcare expects an uplift in annual earnings as a strong performance from its New Zealand dental chain offsets a flat performance from its Australian dental business.

Underlying profit, which excludes one-time items, is expected to be between $8.2 million and $9 million in the year ending May 31, the Auckland-based company said.

That compares with a year-earlier profit of $5.6m in 2015 for its continuing businesses, or profit of $8.8m including earnings from two businesses it has since sold, the company said.

Abano is investing to grow its chain of dental businesses across Australia and New Zealand, where it aims to capture 10 per cent of the $11 billion of the market.

So far this financial year it has acquired 13 dental practices, which are expected to add about $22m in additional annualised gross revenue, and it has also opened one practice in Christchurch.

As at March 31, the company had 186 practices generating annualised gross revenue of $250m and said it has several more acquisitions planned before the end of the financial year.

Its Lumino The Dentists chain in New Zealand increased same-store sales 3 per cent for the nine months ended February 29.

Its Australian Maven Dental Group had a 4 per cent decline in same-store revenue for the period as a weakening economy in Queensland state offset positive growth in its practices in New South Wales and Victoria, it said.

"We are moving towards a closer consolidation between our two dental businesses to share resources, knowledge and expertise," the company said.

Abano said its audiology joint venture in Australia is expected to "show a good uplift" from the year earlier with same-store sales growth of about 4 per cent so far this financial year.

The company expects net profit of between $9.4m-$10.2m this financial year, compared with a year-earlier $4.5m for its continuing businesses or a loss of $1.3m including its divested businesses.

Abano's shares last traded at $7.05 and have slid 7 per cent this year.

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