Abano Healthcare posts record revenue amid strong acquisition programme
TRANSTASMAN dental network operator Abano Healthcare has posted record full year revenue as it continues its acquisition programme with pace, its acquisition spending up 50% on the previous year.
In the lower South Island, Abano has Lumino practices in Dunedin, Mosgiel, Invercargill, Queenstown, Wanaka, Milton, Gore and Oamaru.
For its full year to May, Abano reported record gross revenue was up 12.2% to $312.7 million, earnings before interest, tax, depreciation and amortisation (ebitda) were up 10% to $34.5 million, and aftertax profit was up 15.8% to $12.6 million.
Included in the result was a oneoff gain of $2.1 million when Abano sold its 71% stake in Aucklandbased radiology business Ascot Radiology.
About $42 million was spent on acquisitions, which followed a
successful $35 million capitalraising during the year.
Abano chairman Trevor James said the company had a ‘‘strong acquisition pipeline’’, and the $35 million capital raised during 2018 was supporting the acceler ated growth strategy.
‘‘It’s allowing the company to take advantage of the significant market opportunity, particularly in Australia. Abano has delivered a strong result for the year and is well positioned to continue with its growth strategy,’’ Mr James said.
Abano shares, which are down more than 6.5% on a year ago, were up slightly at $8.74 following the announcement, which included a final 20c dividend, taking the full year to 36c.
Forsyth Barr broker Lyn Howe said Abano’s result was ‘‘strong, and broadly in line with expectations’’.
She noted the acquisition of 19 practices, with a collective annualised revenue of $NZ40 million, was ahead of Abano’s $NZ35 million target.
She said given net debt levels were lower than a year ago, following the capital raise and Ascot Radiology sale, net debt was well below banking covenant levels ‘‘providing ample room for further acquisitions’’.
Net bank debt was around $90 million, with $42 million undrawn from banking facilities.
Craigs Investment partners broker Peter McIntyre said full year 2018 was a ‘‘big year for acquisitions’’, noting the capital expenditure on purchases rose from $28 million a year ago to $42 million.
‘‘This should help drive growth in full year 2019,’’ he said.