Abano lifts first half profit 51% on higher revenue, turnaround

Abano Healthcare [NZX:ABA] boosted first-half profit 51% on increased revenue from its dominant dental business and a turnaround at its unprofitable audiology businesses.

Net profit after minorities rose to $3.5 million, or 16.89c per share, in the six months ended November 30 from $2.3 million, or 12.56c, a year earlier, the Auckland-based company says in a statement. Earnings before interest, tax, depreciation and amortisation (ebitda) advanced 7% to $13.9 million on an 8% lift in revenue to $114.9 million.

"The stronger results were mainly driven by growing revenues and improvements in same-store ebitda across Abano's dental group and an increase in revenues and reduction in losses from Abano's joint venture audiology business," it says.

Last month Abano sold its orthotics business as it seeks to reduce its reliance on public funding, and is expected to incur a loss of some $400,000.

The board declared an interim dividend of 10c per share, up from 7.3c a year earlier, payable on January 23 with a January 22 record date.

Abano says it has faced extra costs of some $350,000 in the period to cover the special shareholders' meeting and High Court action taken by shareholders Peter Hutson and James Reeves, who sought to spill the board after their aborted takeover bid.

The company's dominant dental unit lifted gross revenue 12% to $105.7 million, for an 18% increase in ebitda to $11.9 million. Its diagnostics segment increased revenue 4.2% to $22.1 million for an 8.3% gain in earnings to $3.9 million.

The audiology unit turned to an ebitda profit of 602,000 from a loss of $2.3 million, on 30% jump in sales to $19.6 million. The rehabilitation segment's revenue was largely flat at $5.9 million for an 8.3% dip in earnings to $1.1 million.

Abano's Aotea Pathology unit has tendered for district health board work in the Wellington, Hutt Valley and Wairarapa regions but warns it if isn't successful it will need to write of $11 million from the business.

The shares last traded at $7.40 and have gained 16% this year.


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