Takeover target Abano Healthcare has upgraded its expected profitability guidance for its full-year result, underpinned by growth in its Australian division of dental practices.
Abano's after-tax profit is expected to be up by more than 27% for its year ending May.
That is in line with management forecasts provided in the Grant Samuel independent report in December, prompted by the hostile but unsuccessful takeover bid by a dissident, majority, shareholder group Healthcare Partners.
Abano shares hit a year-high of $9.30, up 2.2% following the announcement, up almost 25% from a low of $7.45 in mid-July.
In the course of its unsuccessful takeover play, Healthcare Partners, which already had a 19% stake in Abano, had $700,000 in dividends withheld by Abano, which was allowed under the takeover code, and faces court proceedings for a further $566,000 claimed in costs by Abano.
Abano chairman Trevor Janes said that, excluding the disputed $566,000 costs, he expected gross revenue of $277million to $281million and revenue of $231million to $235million.
Earnings before interest, tax, depreciation and amortisation were expected to be $30.7million to $31.9million, while after tax profit was expected to be between $9.7million and $10.5million.
''Growth of Abano's businesses is continuing, particularly the transtasman dental group whose strategy is to grow through the acquisition of dental practices, greenfield development and organic growth,'' Mr Janes said.
Abano principally operates about 100 Lumino dentists outlets in New Zealand and a similar number of Maven practices around Australia, employing about 2000 people.
Healthcare Partners wanted to take control of the board and rein in growth strategies and reduce debt, while management remained focused on growth potential.
Excluding the sale of Abano's 50% share in audiology business Bay International and the gain from the sale, Mr Janes said underlying net profit after tax on the continuing businesses was expected to be up at least 32% on the previous financial year.
He said 25 practices had been acquired during the financial year to March and Abano expected to add more than $34million in annualised gross revenue to its dental group during full year 2017.
In addition, 18 practices had been merged into nine locations as part of Abano's strategy to realise operational efficiencies and maximise capacity across its dental networks.
Lumino is also building its third greenfield location in New Zealand with a fully digital and practice in Rangiora.
