Financial Information


Operational Performance

consolidated results

There has been a focus in all businesses on improving margins and developing higher-yielding private payment opportunities.

All sectors delivered improved operating margins and contributed positive operating profits, that generated returns on capital that exceeded our Weighted Average Cost of Capital (WACC).

Following our divestment of the capital-intensive Aged Care sector in June 2005 and with our focus on private medical and healthcare businesses, the Return on Invested Capital at EBITDA has increased from less than 5 percent in 2000 to now be 15.7 percent in 2007. This is an improvement from the 10.2 percent achieved last year and we are on track with our previous guidance for the Return on Invested Capital at EBITDA to be over 18 percent within two years. A detailed analysis of each sector can be found in the Segment Reporting note to the financial statements on page 45.


Net assets have increased by over 11 percent from $46.9 million to $52.4 million.

Net bank debt has increased from $9.9 million in 2006 to $12.3 million as at 31 May 2007, deriving a net bank debt to total asset ratio of 9.9 percent, compared with 10.2 percent in the previous year. The increase in net bank debt reflects bank funding being utilised for the acquisition and expansion opportunities taken up in the 2007 financial year. The total cost of the acquisitions was $11.2 million, and capital expenditure of $4.4 million was incurred.

Abano has a cashflow lend facility with ASB Bank Limited with significant additional funding capacity. During the next 12 months, it is expected that bank debt will increase with planned operational capital expenditure of $5.7 million, including the completion of the Aotea Pathology laboratory refurbishment and a new integrated Information Technology system for audiology.

In addition to this, bank debt will also be utilised for budgeted Dental acquisitions, Audiology greenfield start-ups and the fitout of the new radiology clinic at Ascot Central. The total capital expenditure on developments totals approximately $9.7 million, including the $2.6 million paid in June 2007 for the second 40 percent shareholding in Ascot Radiology.

With the acquisitions and developments being funded by bank debt, this will increase the net bank debt to total asset ratio from the current 9.9 percent.


Operationally, our focus for the 2008 financial year is to continue improving margins across all our businesses as we grow and integrate each acquisition, while continuing to target selected areas of the private healthcare market.

We will also be investing in information technology, human resources, leading-edge equipment and management infrastructure to ensure we continue to attract and retain excellent clinicians and provide world-class service and care.


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Richard Keys
Chief Financial Officer