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Abano forecasts 2017 annual profit

NZ Newswire logoNZ Newswire 8/05/2017 Tina Morrison

Australasian radiology and dental centre operator Abano Healthcare expects to deliver a second consecutive annual profit this year as it benefits from growing its dental chain.

The healthcare investor forecast profit of between $9.7 million and $10.5m in the year ending May 31, compared with a $28.4m profit in 2016, which was boosted by a $20.2m gain on the sale of its half share in audiology business Bay International.

It had a $1.3m loss in 2015, including one-time losses of $8.1m on the sale of Aotea Pathology and $900,000 on the sale of Orthotic Centre.

In December, Abano forecast 2017 after-tax profit of $10.2m, or $10.7m before one-time items and non-controlling interests.

Abano is growing its chain of dental businesses in a fragmented market across Australia and New Zealand where it sees increasing demand, with the aim of capturing 10 per cent of an estimated $11 billion of revenue.

It acquired 25 practices in the financial year to the end of March, taking its total to 204, and said 18 practices had been merged into nine locations as part of its strategy to improve efficiency, which is boosting margins.

"[2017] continues to be a positive year for Abano as we invest into the growth and development of our businesses, particularly our trans-Tasman dental group which is benefiting from economies of scale and increasing market share," chair Trevor Janes said in a statement.

Abano forecast annual revenue of between $231m to $235m, up from $213.7m last year.

That compares with its forecast in December for 2017 net revenue of $236.2m.

In New Zealand, its Lumino The Dentists chain continued to perform well, although it noted same-store sales in the second half had experienced a short-term impact due to an above average amount of leave taken, coinciding with higher than usual replacement of retiring senior dentists.

"Despite this, Lumino has still grown margins strongly as it benefits from its increasing economies of scale and is expected to return to normal long-term trends of positive same-store sales growth," it said.

It expects to pay a final dividend at least equal to the 20c per share paid at the same time last year.

Excluding one-time items, Abano forecast annual profit for its continuing businesses of between $10.7m and $11.5m.

The shares rose 1.7 per cent to $9.25 and have gained 22 per cent over the past year.

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