Abano Healthcare Group has posted a 2 per cent gain in first-half profit to a record, meeting guidance while announcing the exit from its remaining non-dental business with the $17 million sale of Ascot Radiology.
Profit was $6m in the six months ended November 30, from $5.9m a year earlier, the Auckland-based company said on Wednesday. Gross revenue climbed 14 per cent to $159m.
The profit was in line with the $5.4m-to-$6.2m guidance Abano gave last month and was driven by acquisition growth in the dental business, improving dental same-store sales growth and a solid performance in radiology, the company said.
It bought 10 dental practices in the first half, which it expects will generate annualised gross revenue of $18m, although the benefit of a full-year contribution won't show up until 2019 while the acquisition costs will be recorded in the current year.
The company, which operates the Lumino the Dentists chain in New Zealand and Maven Dental Group in Australia, will book a one-time gain of about $2.1m after costs on the Ascot sale after agreeing to sell its 71 per cent stake to the radiologists who own the remainder of the business.
"The sale will complete Abano's transition into a single focus dental group and sale proceeds will be used to fund the continuing growth of the dental group," it said.
"Dental margins for the full year are expected to be in line with the previous financial year, despite the increased investments being made into marketing, technology and branding and the same store revenue performance in Australia."
Overall, same-stores sales fell 1.6 percent in the first half, an improvement on the year-earlier drop of 5.8 per cent.
Its shares last traded at $10 and have gained 26 per cent in the past year.