ABA
21/12/2015 08:51
HALFYR
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REL: 0851 HRS Abano Healthcare Group Limited
HALFYR: ABA: Abano Healthcare Group HY16 Interim Results
ABANO INTERIM RESULTS IN TOP END OF GUIDANCE
For the six months to 30 November 2015
o Abano 2016 interim results in top half of guidance
o Excluding divested businesses, NPAT and underlying NPAT were a strong
improvement on the previous half year
o Growth in existing businesses offsetting loss of earnings from businesses
divested in FY15
Abano Healthcare Group Limited (NZX:ABA) has delivered a half year result in
the top half of its guidance as it continues to drive growth in its dental,
audiology and radiology businesses.
For the six months ended 30 November 2015, Abano reported revenues of $108.0
million, EBITDA of $12.8 million and a Net Profit After Tax (NPAT) of $3.4
million. The results are based on unaudited management accounts.
Gross revenues(i) were $151.8 million, with underlying EBITDA(ii) of $13.2
million and underlying NPAT(ii) of $3.9 million.
The result reflects the sale of Abano's pathology and orthotics interests in
the second half of FY15. Despite the loss of earnings from these two
businesses, Underlying NPAT was in line with the corresponding period, and on
a like for like basis, excluding these businesses, Underlying NPAT was up 86%
on the previous first half year.
Revenue growth was mainly from the expanding dental business, with a
continuing improvement from Abano's joint venture audiology business and a
stable performance from the radiology business.
The Directors have confirmed an interim dividend payment of 10 cents per
share. This equates to 54% of Underlying Net Profit After Tax.
(See table of comparatives in release).
MANAGEMENT COMMENT
Chief executive officer, Richard Keys
The 2016 interim results reflect the ongoing growth of our dental networks
and improvements in audiology and radiology.
We are well on our way to building one of the largest dental organisations in
the region, with two well-resourced and growing dental networks, totalling
181 dental practices and generating in excess of $245 million in gross
annualised revenues. In the first half of the year, we acquired nine dental
practices which are expected to provide approximately $15 million in
additional annualised gross revenue.
We are continuing to build the profile and reputation of our dental brands,
Lumino the Dentists in New Zealand and the newly branded Maven Dental Group
in Australia which we have commenced rolling out across our practices. We
also held several dental conferences in the first half year, which provide
our staff with the opportunity to upskill, share knowledge and meet others
from across the network.
Lumino the Dentists is New Zealand's largest dental network and it continues
to perform well, with same store growth for the six month period at 2%.
However, we are facing more challenging economic conditions in Australia,
particularly in Queensland where 41% of our practices are based. These
Queensland practices are offsetting the positive same store growth we are
achieving with our practices in all the other States, with an overall drop in
same store sales for Maven Dental Group of 3% for the six month period.
The audiology and radiology businesses also offer potential, although in much
smaller markets.
The Australian audiology joint venture is reporting good growth and we
continued our investment into expanding the Bay Audio network, with five new
greenfield stores opened in the six month period. These add incremental
profit to the business with no additional support infrastructure cost. In
line with our retail strategy, these stores are located in high traffic
retail environments, making it easier for customers to find help and support
for hearing difficulties. With the improvements over the last four years,
our same store growth is now plateauing and was 5% in the six month period.
We are moving towards a closer consolidation between our respective
businesses within each sector to share resources, knowledge and expertise.
We have recently established a new leadership structure in our dental sector,
with both dental businesses to be headed by Andy Tapper as CEO (currently CEO
Lumino) and Malcolm Lean as CFO (currently CEO Maven Dental Group). This
leadership structure reflects the significant size of our dental group,
presents the opportunity to undertake initiatives across both businesses and
allows us to take advantage of scale benefits in areas such as training,
development and procurement.
We have also put the Asia audiology network under the oversight of our
experienced Australian management team and are implementing more of the
proven Australian systems and processes into this business.
OUTLOOK
We believe our businesses offer significant and attractive investment
opportunities for us.
We are well positioned to continue growing our businesses, particularly in
the dental sector where our goal is to achieve a 10% share of the $11 billion
trans-Tasman dental market.
Our focus continues to be on expansion through dental practice acquisitions
and the opening of greenfield audiology stores as well as realising existing
opportunities for organic growth within each of our businesses.
HY16 KEY EVENTS
o Acquisition of nine dental practices providing estimated additional gross
revenues of approximately $15 million
o Opening of five new greenfield audiology stores in Australia, with a
further two stores moved from non-retail into retail locations
o Announced new Australian dental brand - Maven Dental Group - and activated
initial rollout to selected practices
o Richard Keys succeeded Alan Clarke as CEO, with Abano's Group Commercial
Manager, Rachel Walsh, appointed as CFO
o Trevor Janes re-elected chairman of the Board, and Pip Dunphy elected
deputy chairman following Susan Paterson's retirement from the Board after 10
years of service
KEY DATES
Record date for interim dividend: 11 January 2016
Confirmation of issue price of shares under DRP. Shares will be issued at a
2.5% discount on closing price: 18 January 2016
Payment date of interim dividend/Issue of shares under DRP: 22 January 2016
Release of interim report: February 2016
ENDS
(i) Gross revenue is reported within the segment note in the Financial
Statements and includes audiology revenues and Australian dental revenues
before payment of dentists' commissions.
(ii) Underlying earnings are reported for both NPAT (a GAAP compliant
measure) and EBITDA (a non-GAAP financial measure) and excludes gains/losses
arising on sale of businesses, IFRS adjustments and impairments, including
their tax effect. Both measures are reconciled back to reported NPAT. It is
the measure used within the Company to evaluate performance, establish
strategic goals and to allocate resources.
More information on gross revenue and underlying earnings, which are non-GAAP
financial measures and are not prepared in accordance with NZ IFRS, is
available on the Abano website at www.abano.co.nz/underlyingearnings.
For more information, visit www.abanohealthcare.co.nz or please call:
Richard Keys
Chief Executive Officer
Tel: +64 9 300 1413 Mob: +64 274 818368
Rachel Walsh
Chief Financial Officer
Tel: +64 9 09 300 1671 Mob: +64 21 443615
End CA:00275453 For:ABA Type:HALFYR Time:2015-12-21 08:51:24
