ABA
25/11/2014 13:04
FORECAST
PRICE SENSITIVE
REL: 1304 HRS Abano Healthcare Group Limited
FORECAST: ABA: Abano Annual Meeting Summary and Voting
IMPROVING RETURNS FORECAST AS ABANO CONTINUES TO GROW
Abano's long term growth strategy remains in place with improving returns
driving increases in the Company's revenue and profit, said Chairman Trevor
Janes at the Abano annual meeting in Auckland today.
Trevor Janes and Chief Operating Officer, Richard Keys, provided shareholders
with an update on Abano's business performance.
Business highlights included the continuing growth of Abano's trans-Tasman
dental group, which has expanded to 163 practices, with 10 acquisitions in
the year to date, and is now generating more than $220 million in annualised
gross revenues. Abano's Australian audiology group is also delivering an
improving performance and has now achieved break even at EBITDA.
The Company's Auckland-based radiology business has seen demand strengthening
for its high end scanning technology, as management focus on growing
referrals. Meanwhile, Aotea Pathology, which has provided community pathology
services in Wellington for over 80 years, is involved in an RFP process for
the renewal of its contract which currently expires in October 2015. If
successful, this will ensure the continuation of the business and there will
be no impairment to its $11 million book value.
As announced prior to the meeting, the Company's orthotics business is being
divested. Settlement is expected at the end of January 2015 and the proceeds
from the sale will be applied to the reduction of debt and ultimately be
reinvested into Abano's growth businesses, in particular dental.
Performance in the first half of the year is forecast to deliver improving
revenue and profitability for the six months to 30 November 2014, over the
same period last year.
This improved result is expected despite the ongoing softness of the
Australian economy and a continuing weakness of the Australian dollar against
the NZ dollar, which has fallen a further 5% compared to the same period past
year. In addition, costs of over $350,000 associated with the special
meeting requisitioned by interests associated by Mr Hutson and Mr Reeves and
the subsequent High Court action will be included in the first half.
The timing of settlements for dental acquisitions will also impact on the
half year result. While dental practice acquisitions are ahead of plan in
New Zealand, they are below plan in Australia in the period up to November
2014, due to a variety of factors including timing delays in vendor
requirements. However, the Abano dental group has a good acquisition
pipeline and it is on track to achieve its full year acquisition target.
Therefore, for the first half, revenue is expected to be $113.6 to $115.6
million (HY14: $106.1m) and gross revenues are expected to be $151.1 to $
153.1 million (HY14: $136.2m).
EBITDA is forecast for $14.1 to $15.1 million (HY14: $13.9m) with underlying
EBITDA of $14.7 to $15.7 million (HY14: $14.8m).
Net Profit After Tax is expected to be ahead of the previous year's first
half by over 40%, at between $3.2 to $3.7 million (HY14: $2.3m), with
underlying NPAT3 of between $3.6 to $4.1 million, up over 20% on the same
period last year (HY14: $3.0m).
Following the steady and continuing growth of the Abano group seen over the
last few years, the directors have announced a new dividend policy for the
2015 financial year, where subject to relevant factors at the time, including
working capital and growth, the annual dividend paid will be between 50-70%
of Underlying Net Profit After Tax.
Trevor Janes said: "Abano's growth strategy remains firmly in place, with
milestones being achieved on a regular basis as we build valuable and
sustainable, long term businesses, particularly in dental.
"We believe that this dividend policy provides an attractive investment
balance between a growth and a yield stock, while along with the dividend
reinvestment plan, will maintain a prudent capital structure for the
continued growth of the Company."
Also at today's meeting, Abano's CEO and Managing Director, Alan Clarke,
advised shareholders of his planned retirement in 12 months' time, following
the 2015 annual meeting.
Trevor Janes commented: "Alan has been integral to our Company's success and
his early vision of a multi-sector, healthcare organisation operating in the
private sector, has been realised. During his tenure, Abano has evolved from
a loss making cluster of aged care facilities with huge debt, to a Kiwi
success story with more than 2,200 staff working in locations across New
Zealand, Australia and South East Asia, and delivering our healthcare
services to thousands of people every day."
Shareholders passed all resolutions at the 2015 Abano Annual Meeting. Details
of the voting are in the attached company announcement.
ENDS
End CA:00258069 For:ABA Type:FORECAST Time:2014-11-25 13:04:08
