Abano Healthcare shares rose 10 per cent as the medical investor considers "various expressions of interest" as the Australian dental sector faces consolidation.
The stock climbed 35 cents to $3.85 in early trading, but has almost halved in value from the start of the year. Abano downgraded its annual earnings outlook in March due to challenging conditions across the Tasman and halted its acquisition of new dental practices there.
The company today reaffirmed that it isn't buying new practices in Australia, and will focus investment in New Zealand to grow its existing Lumino brand.
"Consolidation activity in the dental sector in Australia is ongoing. Abano has received various expressions of interest, which may offer strategic opportunities and value to shareholders," the company said.
"The board will evaluate these and the company's participation, as part of its ongoing review of strategy, asset mix and capital structure. There is no certainty that any expression of interest will lead to a proposal for shareholders to consider or to any transaction, either in respect of Abano itself or the company's businesses."
Abano is no stranger to merger and acquisition activity, fending off multiple attempts by former director and cornerstone shareholder Peter Hutson between 2013 and 2017, and early takeover bids by Crescent Capital in 2008 and the Christchurch-based Stewart family the year before.
Through that period, it built up and on-sold an audiology business and pared back its focus to the trans-Tasman dental sector, where it aspires to be the largest private provider in an $11 billion market that is currently fragmented.
The company today said preliminary earnings before interest, tax, depreciation and amortisation were $32.7 million in the year ended May 31, in line with the $32.4 million reported a year earlier and its March guidance for ebitda of $33 million.
Net profit was $10.1 million, including a $1 million writeback of an acquisition's earn-out, but before goodwill has been reviewed. Abano forecast profit of $9 million before reviewing goodwill, and reported $10.3 million a year earlier.
The board expects to declare a final dividend of 8 cents per share, taking the annual return to 24 cents. Abano paid 36 cents per share in annual dividends last year. Abano said it is working to improve the performance of its Maven-branded practices in Australia.
"This includes increasing clinical days by recruiting additional dentists to fill existing and future chair capacity, particularly in Australia. Underpinning all activity is the continuing commitment to delivering high-quality clinical care and an excellent patient experience," it said.