2015 Annual Report


The demand for private healthcare and medical services will continue to grow as aging populations, costly new technologies and medical advances put pressure on public healthcare services. Abano is an established NZX-listed opportunity to invest into the healthcare and medical services market.

Dental will remain our primary focus as we continue to build market share by investing into both organic and acquisition growth, as well as realising scale benefits across our substantial trans-Tasman group. We now have an established platform in place to support our ongoing expansion into the NZ$11 billion trans-Tasman dental market, with our focus on private payment for our services delivering long term patient relationships. While the market in Australia is currently soft, particularly for mid to high end treatments, we believe that the market characteristics and long term growth opportunities in both markets remain very attractive.

Dental acquisition growth has continued in the first two months of the 2016 financial year with the acquisition of four practices delivering approximately $9 million in additional annualised gross revenues. These take Abano’s trans-Tasman dental group to 177 practice locations across Australia and New Zealand, with total estimated annualised gross revenues for the dental group now in excess of $240 million.

In New Zealand, Lumino’s nationwide brand and marketing activity is an established and integral part of the business’ success and we will continue to use advertising to drive demand. We will commence the rollout of the Maven Dental brand across our Australia dental network in the next few months and expect the majority of our practices to be branded over the next two to three years.

Our moderate level of investment into audiology greenfield stores will continue and we anticipate continued improvements from our Australian audiology joint venture, with three new stores planned to open in the first half of FY16, and continuing double digit revenue growth. Bay Audio’s Asian businesses, which are now under the oversight of the Australian management team, will focus on achieving a more consistent performance and a breakeven result for FY16. We expect the audiology group to deliver a full year net profit after tax for FY16.

Our radiology business is seen as a leading provider for specialist referrers and we will continue to build relationships with these key stakeholders. This year there will be a continuing focus on improving the customer experience and we will also be investing in new leading edge mammography technology.

Over 60% of Abano’s gross revenues are now expected to be generated in Australia and while economic conditions remain relatively stable in New Zealand, the growth rate of the Australian economy is below historical trends. We have a long term investment view and the volatility of the short term economic conditions have not altered our strategy.

Abano is in excellent shape to continue its growth and the change in leadership later this year heralds a new and exciting stage in Abano’s journey. We invite you to attend our annual meeting later this year and we thank our shareholders for your continued support.

Alan Clarke, Retiring Chief Executive Officer

Richard Keys, COO/CFO and Incoming CEO