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ABANO HEALTHCARE GROUP: INTERIM RESULTS TO 30 NOVEMBER 2011

Abano Healthcare Group has today announced its interim results for the six months to 30 November 2011. The results are based on unaudited management accounts, and are in line with guidance. They show Revenues of $102.0 million, Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) of $11.7 million and a Net Profit After Tax (NPAT) of $0.6 million. Excluding the recent changes as required under the International Financial Reporting Standards (IFRS), underlying EBITDA was $12.5 million, resulting in an underlying NPAT of $1.3 million.

Abano experienced strong growth compared with the same period last year, with Revenue and EBITDA up 18% and 14% respectively. However, NPAT was down on the same period, reflecting the loss of the investment income from National Hearing Care which was sold in December 2010, an increased depreciation charge from accelerated investment in IT infrastructure, and new facility fees associated with an additional debt facility in Australia.

Revenue and EBITDA will continue to grow strongly through the second six months, while NPAT will remain flat. Strong growth at NPAT is then expected into the 2013 financial year as the investments and accelerated acquisitions made in the current period generate positive earnings.

In line with the last three years, and demonstrating the Board’s confidence in the underlying growth of NPAT from Abano’s emerging dental and radiology businesses, an interim dividend of 7.3 cents per share has been declared and will be paid on 27 January 2012.

	Six months ended 30 November 2011 ($m)	Six months ended 30 November 2010 ($m)
Revenues	$102.0	$86.7
EBITDA	$11.7	$10.3
Add back acquisition costs	$0.8	$0.5
Underlying EBITDA*	$12.5	$10.8
Net Profit After Tax	$0.6	$2.2
Add back acquisition costs	$0.6	$0.5
Add back fair value amortisation of deferred acquisition liabilities	$0.1	$0.1
Underlying NPAT*	$1.3	$2.8
Earnings per share	362 cents per share	10.51 cents per share
Underlying earnings per share*	829 cents per share	13.51 cents per share
Interim dividend	73 cents per share	73 cents per share

The results for the Bay Group are now equity accounted and therefore no longer included in the consolidated EBITDA
*Further information on underlying earnings, which is a non-GAAP financial measure and is not prepared in accordance with NZ IFRS, is available on the Abano website at www.abano.co.nz/underlyingearnings

Managing director of Abano, Alan Clarke, commented: “Abano’s growth during the period under review is very pleasing, with exceptional progress and strong earnings contributions from our Australian and New Zealand dental groups. In addition, our Radiology group saw improving demand across all modalities with good growth over last year’s results. Our Orthotic Group also grew with the new lower South Island contract, and our Pathology and Brain Injury businesses produced steady results.

“We have a focus on growth, particularly in dental where we acquired 20 dental practices with over $28 million in annualised revenues added in Australia and New Zealand in the first six month period. This investment rate is very pleasing and Dental Partners and Lumino are now seen as the partners of choice in both countries.

“Finally, we continued strengthening our audiology business platforms in Asia and Australia, with ongoing investment into IT infrastructure and the regional rollout of the Bay Audio brand and touch screen technologies. While these businesses are in an establishment phase, investment costs are expensed through the Profit and Loss, and it will be three to four more years before this business group breaks even, with profit contributions expected thereafter.

Highlights for the six months to 30 November 2011 include:

• Acquisition of 20 dental practices across New Zealand and Australia
• Official opening of new Dental Partners head office in Queensland
• Official launch of eLab, Aotea Pathology’s online test ordering system, by the Hon Tony Ryall
• Continuation of Lumino The Dentists’ highly successful national advertising campaign
• Completion of investor road show with twenty six presentations around New Zealand
• Appointment of Trevor Janes as chair and Susan Paterson as deputy chair of the Abano Board
• Appointment of Ted van Arkel to the Abano Board

Abano Chairman, Trevor Janes, said: “Abano is making good progress, however, depressed economic conditions in New Zealand and Australia have persisted into the 2012 financial year, and we have seen increasing pressure on publicly funded health contracts. In addition, there are a number of recent changes to IFRS regulations which have had and will continue to have an impact on how we report our results. In particular, the one off payments, costs and charges relating to acquisitions, which historically were capitalised, must now be expensed.

“As we have done previously, we also report on underlying earnings, which the Board believes is a more appropriate representation of Abano’s performance and useful information on the ‘normalised’ profit of the company.

“In line with our normal market guidance communications, as made over the last seven years, we will issue a full year forecast for the financial year ended 31 May 2012, in March next year, once we have assessed trading over the Christmas and summer holiday break.

“As we have previously indicated, we expect to see revenue and EBITDA increase by over 20% compared to last year and while we also expect to see strong growth in NPAT in future years, there will be a flat to decreased bottom line at NPAT in the current year after expensing investment costs as required under IFRS.

Ends

Key Dates

• Record date for dividend	12 January 2012
• Confirmation of issue price for shares under the Dividend Reinvestment Plan (DRP). Shares will be issued at a 2.5% discount on closing price	20 January 2012
• Payment date of interim dividend/Issue of shares under the DRP scheme	27 January 2012
• Release of Interim Report	Late February 2012

ENDS

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