Our Performance in 2009

This year, for the first time, we are pleased to provide you with a summary Shareholder Review for the year. This document has been designed to provide you with an overview of our company and our achievements in the 2009 financial year and is a companion document for the more accounts-focussed Annual Report. A printed copy of the full Annual Report is available on request or can be viewed online at

Over the past eight years, Abano has produced strong year on year business growth with improving profitability. This has been achieved through our proven long term Co-Invest and Build strategy, where we concentrate our efforts into carefully selected healthcare sectors which are predominately privately funded and offer attractive returns and significant future growth potential.

Dental in New Zealand and Australia, Audiology in Australasia and Asia and Radiology in New Zealand have all been identified as sectors with exciting growth prospects. Abano has multiple businesses in these sectors, some nearing maturity, while others are still in their infancy in markets with considerable potential.

The Group also includes several other excellent businesses in Rehabilitation and Pathology services, as well as our New Zealand based Audiology business, which provide attractive, consistent and profitable returns but in markets with more limited growth and potential.

2009 saw our business become increasingly global with growth and expansion across Australasia and Asia in our Audiology and Dental sectors. While New Zealand remains our biggest geographical base, the Australian and Asian markets now offer considerable potential and will be a significant opportunity for Abano going forward.

We have already entered the Australian market, in both Audiology and Dental, and both these businesses now have solid business platforms in place and are well positioned for continued growth.

Asia also offers significant potential with large populations, a booming middle class and an exploding demand for high quality healthcare. Abano entered the Asian market with a small investment into several audiology businesses in Singapore and Hong Kong in late 2008. Since year end, we have also announced our entry into the Malaysian market with the acquisition of two stores in Kuala Lumpur through our world wide partnership with the Siemens Group. Our retail mall based clinics, developed in Australia using Bay’s unique touch screen self testing technology, are proving to be a success in both markets and we see strong growth potential.

2009 was also a year of unprecedented global economic turmoil. As we have stated, the business of healthcare delivery is relatively sheltered; however, growth opportunities were and will continue to be affected as consumers’ discretionary spending remains under pressure.

While Abano continues a focus on the delivery of private health services, the Group has a balanced mix of private and public revenue streams and a regional geographic presence which provides a spread of businesses in a number of economies and the ability to grow profitably in the current economic climate.

For the 2009 year, Abano continued an eight year trend of providing record returns, with revenues of $187.2 million, Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) of $31.5 million and a Net Profit After Tax (NPAT) of $9.7 million for the year ended 31 May 2009. These results are all at the top end of the company’s revised guidance.

A final dividend of 12 cents per share, with a blended imputation credit of the old and new company tax rates, has been declared for the 2009 year, and was payable in August 2009. The total dividend for the 2009 financial year was 21 cents per share, maintaining the Group’s policy of distributing 50 percent of NPAT.

We would like to sincerely thank all our staff, whose expertise, enthusiasm, professionalism and care help to make our businesses the preferred healthcare providers for the thousands of people we diagnose, care for and treat each day.

Our focus on profitable growth and our successful Co- Investment business model has seen increasing interest from healthcare professionals and clinical owners in a number of different disciplines looking to work in partnership with Abano. We are now considered the corporate partner of choice for many entrepreneurial clinicians in the private healthcare and medical services sector.

In December 2008, our business model was recognised at the country’s top business awards when Abano was presented with the Best Growth Strategy Award at the Deloitte Management Magazine Top 200 Awards.

We continue to receive strong support from our long term banking partners, ASB Bank in New Zealand and CBA Bank in Australia. These two banks provide term facilities of approximately NZ$130 million in confirmed funds to draw on and we closed the 2009 year with a net debt position of NZ $82.2 million.

The 2010 year will be one of continuing achievement for Abano, particularly for our Dental businesses on both sides of the Tasman, our Audiology networks in Australia and Asia and the Radiology operations in New Zealand. We will continue to implement our proven and successful Co-invest and Build strategy with our clinical partners, while keeping a careful eye on the global economy.

Looking forward, Abano is well positioned to maximise value from existing businesses and pursue value adding opportunities, enhancing our shareholders’ wealth.

Alison Paterson
Alison Paterson
Alan Clarke
Alan Clarke
Managing Director