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Abano posts first-half profit of $1.5m

Abano Healthcare [NZX: ABA], a specialist healthcare investor and operator, met its guidance with a jump in first-half profit as it acquired more dental practices in Australia and New Zealand.

Net profit was $1.5 million in the six months ended November 30, from $600,000 a year earlier, the Auckland-based company said in a statement. Sales rose to $107.9 million from $102 million. That's in line with its October guidance of profit between $1.3 million and $1.8 million, and sales of between $105.4 million and $107.4 million.

The shares rose 4.1% to a three-year high of $6.30 and have advanced 43% this year. The shares are rated "outperform" based on two recommendations compiled by Reuters. Abano will pay an unchanged first-half dividend of 7.3c a share.

Revenue growth would have been even higher if it hadn't changed the way it recognised sales from its Dental Partners business in Australia. These were now accounted for after dentists' commissions, the company said.

In the first half, the company acquired 19 dental practices, adding $16.9 million in annual gross revenue and bringing its total practices to 136 across Australia and New Zealand. Sales from dental rose to $80 million from $70.6 million and operating earnings climbed to $7.7 million from $5.2 million.

Revenue from its diagnostics businesses rose to $20.8 million from $19.8 million and operating earnings rose to $2.8 million from $2.6 million.

Rehabilitation sales declined to $7.1 million from $11.6 million, for an operating result of $1.4 million, down from $1.6 million. Abano Rehabilitation was sold to Bupa Care Services NZ in June.

Abano's underlying profit, excluding IFRS items, a one-time gain from the sale of the company's brain injury rehabilitation business and a review of goodwill and tax losses at its Bay International unit, rose to $2.7 million from $1.3 million.

"Our businesses have performed well over the six month period and we are now realising some of the early benefits of our accelerated dental acquisition programme and the investment into our dental and radiology businesses," managing director Alan Clarke said.

"These benefits will continue to be evident during the second half of the year and into 2014," he said.

The company said it will give full-year guidance in March.

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