Australasian dental chain Abano Healthcare is seeking a $35 million capital injection from shareholders, on the back of reporting a record $11.5 million profit for the past year.
Abano's Lumino New Zealand practices and Australian Maven Dental Group practices grew by 27 during its year to May 31, 2017, with expectations they will provide annualised gross revenues of $NZ14.8 million and $A18.3 million.
There were 126 Lumino practices and 106 Maven, with some since merged into other practices, leaving the total 205.
Reported revenue for its year to May was up 9.3% to $233.5 million, with earnings before interest and tax up 18% at $31.4 million. After-tax profit was up almost 47% to a record $11.5 million.
Lumino gross revenue for the year was $NZ120.8 million and Maven's $A133.5 million, which accounted for 94% of Abano revenue, the balance coming from Auckland radiology services.
A final partially imputed 20c dividend was declared yesterday, taking the full-year dividend to 36c, up 20% on a year ago.
Abano shares rose 1c to $9.61 following the announcement.
Abano's chairman, Trevor Janes, said investment in the growth by acquisition and development drove 2017's positive financial returns and the $35 million one-for-five shares capital raising had a focus on more Australian acquisitions.
''Abano has a history of investing into healthcare businesses which we are able to scale and grow to gain the benefits of size, reputation and branding,'' he said in a statement.
The Australian dental market was about 12 times larger than New Zealand's and a number of larger Australian practices were at present in negotiations and ''expected to settle in upcoming months'', he said.
An unsuccessful takeover attempt last year by a group of dissident Abano shareholders was in part due to Abano's aggressive acquisition plan, which the group wanted to rein in.
Mr Janes noted the 2017 result assumed there would be full recovery of $566,000 owed in costs by Healthcare Partners Holdings, from its failed partial takeover attempt.
Forsyth Barr broker Lyn Howe said Abano's result was at the top end of guidance, ahead of expectations of profit after tax.
''The [$35 million rights issue] provides Abano with funding for just over one additional year of dental acquisitions,'' she said.
She noted the acquisition of 27 practices, to deliver around $NZ34 million annualised revenue, was well ahead of Abano's stated target of around $30 million.
Abano now had a 13% share in the New Zealand market and 1.4% in Australia.
Abano's dividend reinvestment plan was suspended due to the capital raising plan.
