Abano Healthcare reiterates profit growth forecast

Tuesday 25th November 2008

Abano Healthcare Group, the healthcare investor that was pursued by two suitors last year, reiterated its forecast for full-year profit growth and said it has ample long-term funding in place.

Profit may rise to NZ$10-NZ$12 million in the year ending March 31, from NZ$7.8 million last year, the company said in a statement. There are risks to achieving the target should economic activity weaken further, it said.

"The extent of the current economic downturn is unprecedented and it represents a material risk factor for all New Zealand businesses,' said chair Alison Paterson. Healthcare "is reasonably protected from economic conditions" though there may be a drop off in discretionary spending on private healthcare, she said.

The company's stock rose 1.1% to NZ$1.55 and is down only 8% in a year when the benchmark NZX 50 Index fell four times as much. Abano has acquired specialist health clinics in Australia and at home in New Zealand, where it retains long-term public healthcare contracts that will help 'insulate' the company against any downturn, the company said.

She also gave an update on the first-half results, saying all businesses "are making good progress on last year."

"Some planned acquisitions have taken longer than expected to settle; however, we have made good progress in other business areas and acquisitions," she said.

Sales probably rose to NZ$85-NZ$86 million in the six months ending Nov. 30, from NZ$59.6 million a year earlier. Net profit rose to NZ$4.0-$4.3 million, from NZ$3.8 million.

By Jonathan Underhill

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