By NZPA
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Wednesday 16th October 2002 |
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The company said at its annual meeting in Auckland today that it was on track to meet its full year forecast with revenues of $50 million.
Its ebitda (earnings before interest, tax, depreciation and amortisation) headed for more than $7.9 million -- double the level two years ago.
Chairman Jim Syme said that since the end of its financial year on May 31, the company had proposed a move into the dental market through Geddes Dental Group. Further acquisitions were also being assessed.
"There are a number of initiatives to grow the existing businesses and we will continue to seek diversification in the wider medical and healthcare sectors," he said.
Mr Syme reflected on the company's 22 percent improvement in revenues and core ebitda during the year. Revenue had increased from $25 million to over $40 million since 1999/2000.
Group debt had been reduced by $13 million in the second half after a successful rights issues, further asset sales and a placement to Alliance.
Outlining the company's potential, Mr Syme predicted that expenditure on healthcare had and would continue to grow at between 6 percent and 8 percent a year.
But the government's contribution to this growth would continue to decrease as it recognised it could not fully fund the demands of a rapidly ageing population.
Mr Syme said the government's expenditure in healthcare as a percentage of GDP -- currently 8 percent -- would have to grow to over 30 percent of GDP by 2030 if it was to try and fund its existing contribution of healthcare expenditure -- "a clear impossibility". "The implications of this are enormous . .. It means demand for our products and services will continue and grow each year from now on.
"It means the mix of funding will change and as private fee payment increases so the demand for quality of service and professionalism will increase."
Mr Syme said the purchase of Geddes Dental Group would generate annual revenues of over $8.8 million per year, contributing an ebitda income of over $1.1 million each year.
He also announced a new director, Alison Paterson, a former deputy chairwoman of Health Waikato and Waitemata District Health. She is currently a director with the Reserve Bank and Metro Water and a current chairwoman of Landcorp Farming Ltd and the Electricity Complaints Commission.
Mr Syme said Eldercare was about to start reviewing short term and long term remuneration with a view to aligning the long term increment to shareholder value.
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