Listed healthcare investor and operator, Abano Healthcare
Group, has today provided guidance for the financial year
ending 31 May 2012.
Growth in consumer demand following a successful television
campaign for dentistry in New Zealand, accelerated dental
acquisition growth in Australia and New Zealand, and
growing referrals in radiology have underpinned the second
half forecast for Abano.
The company expects annual revenues to grow to between
$205.0 and $207.0 million (FY11 $174.8million), and
Earnings Before Interest, Tax, Depreciation and
Amortisation (EBITDAi) to be between $24.7 and $25.7
million (FY11: $19.7 million), generating a Net Profit
After Tax (NPAT) of between $1.3 and $1.8 million (FY11:
$2.3 million, excluding the one off gain from the sale of
Abano's shareholding in National Hearing Care and the one
off de-recognition of tax losses in Bay International which
occurred during FY11).
Underlying EBITDA is expected to be between $26.2 and $27.2
million (FY11:$20.5m) and underlying NPAT between $2.7 and
$3.2 million (FY11:$3.1mii). The company notes that this
guidance is in line with broker forecasts.
As reported in the first half, the 2012 full year guidance
also reflects the loss of investment income from National
Hearing Care (which was sold in December 2010), an
increased depreciation charge from accelerated investment
in IT infrastructure, and facility fees associated with an
additional debt facility in Australia.
Abano managing director, Alan Clarke, said: "The
growth in revenues and earnings is very pleasing as we are
in a regeneration phase, following the sale of our New
Zealand audiology operations in 2010 and 2011.
"Our primary source of income is now from our dental
businesses on both sides of the Tasman. We have accelerated
acquisition plans for both these networks, and have
achieved excellent growth this year with the acquisition of
24 practices to date, which will provide an additional $36
million in annualised revenues.
"Pleasingly, we have also seen organic growth within the
Group. This follows a successful television campaign for
Lumino the Dentists in New Zealand, as well as improving
demand in radiology in New Zealand as our investment into
new technologies starts to deliver results. Our joint
venture audiology networks in Australia and Asia continue
to show improvement, but are still incurring development
losses and it will be three to four years before this
business group breaks even. Finally, our pathology, brain
injury and orthotics businesses in New Zealand are all
producing steady results."
In a new initiative that was announced in February 2012,
Abano's radiology sector will expand with the development
of a purpose built $4 million specialist radiology clinic
in the AUT Millennium Campus, on Auckland's North Shore.
Opening in the new financial year, this clinic will offer
Australasia's first GE second generation wide-bore 3T
Magnetic Resonance Imaging (MRI) scanner, as well as
providing specialist obstetric ultrasound services, Plain
Film, Ultrasound and Mammography modalities.
Chairman of Abano, Trevor Janes commented: "While both the
Australian and New Zealand economies remain flat, Abano is
seeing a return of organic growth, underlining the relative
resilience of healthcare spending in both markets.
Our new AUT Millennium radiology investment, while
incurring set up costs in the 2012 financial year, will
provide an additional source of income in the 2013
financial year and onwards.
"The Board will continue to report Underlying Earnings,
which excludes acquisition and IFRS charges and therefore
will provide our shareholders with a "like for like"
comparison with previous years' performance. We
believe that this is a more appropriate representation of
Abano's performance and provides useful information on the
'normalised' profit of the company."
There are a number of recent changes under IFRS regulation
which have had and will continue to have a significant
impact on how Abano reports its results. The main impact of
these changes is with respect to payments, costs and
charges relating to acquisitions. Historically, most of
these costs were capitalised whereas now under IFRS they
must now be expensed. As Abano has an acquisition
growth strategy, the number of acquisitions made will
continue to increase, which means the one off costs and
charges incurred in these acquisitions will negatively
impact the reported NPAT performance going forward.
Trevor Janes commented: "We expect to see the current
growth in revenue and EBITDA continue into the 2013
financial year and beyond, with an improving bottom line
NPAT performance as our investments and accelerated
acquisitions contribute positive earnings."
The Abano board has reconfirmed its expectation to maintain
the 2012 dividend at 21 cents per share.
i:EBITDA excludes profit/losses generated by Bay
International, in which Abano holds a 50%
shareholding. The results for the Bay Group are now
equity accounted and therefore no longer included in the
consolidated EBITDA. FY11 EBITDA has been restated to
provide a like for like comparison.
ii: Further information on underlying earnings, which is a
non-GAAP financial measure and is not prepared in
accordance with NZ IFRS, is available on the Abano website