Abano sees growing need for private healthcare

Increased focus on private paying customers and a stronger portfolio have helped Abano Healthcare lift its net profit to $14.7 million in the year to the end of May.

That reflects a one-off gain of $13.1 million from the sale of the ElderCare business in July last year.

Operating net profit after tax generated from normal business operations was $1.6 million. That compared with a profit, restated for International Financial Reporting Standards, of $1 million for the year before.

Abano chairman Jim Syme said yesterday that the company expected privately funded healthcare to become an essential and preferred option for many as increasing demand was placed on the Government's health budget.

Of a medical services market worth more than $16 billion, about $4 billion was generated through private payment.

"We believe this private payment component will continue to grow and, in five years, we see Abano as a major investor and operator in this expanding niche area of the healthcare market."

Syme said Abano was focused on increasing the balance of private to public funding providers in its portfolio.

Acquisitions in the past year had increased annualised private revenue from 33 to 42 per cent.

During the year Abano bought 70 per cent of Bay Audiology and 70 per cent of the Orthotic Centre. Six dental practices were also added to the Lumino Care Dental network.

A one-off cash return of $10 million was made last August through a voluntary share buyback and cancellation programme after the ElderCare sale.

A 1:10 share consolidation was then done, and bank debt was reduced from $33.1 million in may last year to $9.8 million in May this year, resulting in a drop in interest costs.

Operational earnings before interest tax depreciation and amortisation per share improved by 5 per cent to 29.1c a share.

- NZPA