Abano forecasts 40pc profit jump

Abano Healthcare chairman Trevor Janes (R) and Abano chief executive Alan Clarke (L). NZH pic

Abano Healthcare, the listed healthcare investor, said first-half profit may rise 40 per cent even in the face of a weak Australian dollar and tepid economic growth across the Tasman.

Net profit will be in a range of $3.2 million to $3.7 million in the six months ended November 30, up from $2.3 million a year earlier, chairman Trevor Janes told shareholders at their annual meeting. Revenues would be $113.6 million to $115.6 million, up from $106.1 million.

Abano got 52 per cent of earnings in offshore markets in 2014, of which 96 per cent was generated in Australia.

"Our businesses are progressing well in the first half of the 2015 year, despite the soft Australian economy and the continuing weakness of the Australian dollar against the NZ dollar, which is higher in the first half of FY15 than it was in the first half of FY14," Janes said.

The company has a "good acquisition pipeline" for dental practices, which it sees as one of is growth engines and Janes said Abano should meet its full-year target for acquisitions.

Earlier today the company announced the sale of its orthotics business to private investors as part of a strategy to exit what it calls "maintain" businesses, typically relying on public funding and falling outside Abano's growth strategy. That leaves only the pathology business as a maintain business.

Abano's 2014 results included $700,000 of costs related to the attempted takeover by rebel shareholders Peter Hutson and James Reeves. Janes said today that the 2015 results will include costs related to a special meeting requisitioned by Hutson and Reeves in June and for High Court action by Reeves subsequently to try to delay or cancel the special meeting.

Janes said that after a board review of the company's dividend policy, Abano will aim to pay annual dividends starting this year amounting to between 50 per cent and 70 per cent underlying profit. The 21 cents a share of total dividends last year amounted to 67 per cent of underlying NPAT, down from the 78 per cent payout the previous year.

Abano shares were unchanged at $7.29 and have gained 14 per cent this year.

Read the latest Abano announcement here: