Abano Healthcare Six Month Report to Shareholders 2011

Transcription

1 ABANO HEALTHCARE INTERIM REPORT PAGE 1 Abano Healthcare Six Month Report to Shareholders 2011 For the six month period to 30 November

2 The Hearing Care Professionals ABANO HEALTHCARE INTERIM REPORT - PAGE 1 regions of business AUDIOLOGY DIAGNOSTICS DENTAL REHABILITATION TAIWAN HONG KONG MALAYSIA SINGAPORE AUSTRALIA AUSTRALIA NEW ZEALAND NEW ZEALAND NEW ZEALAND CONTENTS Summary of Activity 2 Financial Results 3 Chairman and Managing Director s Report 5 I n t e r i m F i n a n c i a l S tat e m e n t s Consolidated Income Statement 10 Statement of Comprehensive Income 10 Consolidated Balance Sheet 12 Consolidated Statement of Cashflows 13 Consolidated Statement of Changes in Equity 14 Notes to the Interim Financial Statements 16

3 PAGE 2 - ABANO HEALTHCARE INTERIM REPORT 2011 ABANO HEALTHCARE INTERIM REPORT PAGE 3 SIX MONTH HIGHLIGHTS to 30 november FINANCIAL RESULTS Generated revenue of $86.7 million, an EBITDA of $9.4 million and Operating NPAT of $2.2 million Excluding the audiology joint venture, revenues from the continuing operations of dental, diagnostics and rehabilitation increased by 16 percent over the same period last year Underlying earnings, excluding recent IFRS changes, produced an EBITDA of $9.9 million and NPAT of $2.8 million Earnings Per Share from continuing operations were up 29 percent on last year from 8.15 cents per share to cents per share Lumino The Dentists acquired four dental practices in NZ, taking the network to 54 practices across the country Dental Partners acquired seven new dental practices, growing to 33 practices in Australia Announced planned entry into Taiwanese audiology market Announced investment into leading edge PET/CT scanning service at Ascot Radiology in Auckland Moved regional management offices for audiology in Australia to Sydney and in Asia to Hong Kong and strengthened the management teams Six months ENDED 30 November ($M) Six months ENDED 30 November ($M) Revenues EBITDA Net profit after tax (statutory profit) Less: net gain on sale of Bay New Zealand Add back: deferred interest expense on acquisition settlements - (76.6) Add back: acquisition costs Underlying profit after tax Earnings per share from continuing operations cents per share 8.15 cents per share Interim dividend - operating 7.3 cents per share 7.3 cents per share Special dividend following sale of Bay New Zealand* cents per share * Special early interim dividend paid in December following settlement of the sale of Abano s New Zealand audiology business was a total of 52 cents per share, including the six month operating dividend of 7.3 cents per share. Following period end Settled the sale of shareholding in National Hearing Care in December, for one off gain on sale of approximately $12 million Returned $27.3 million to shareholders by way of a compulsory, pro rata 1 in 4 cancellation of shares, reducing the number of shares on issue from 20.9 million to 15.7 million Paid an interim dividend of 7.3 cents per share Acquired two dental practices in Australia Settled Taiwanese audiology investment in December Secured a $75 million extension for the Aotea Pathology contract with Capital and Coast and Hutt Valley DHBs for a further three years to November 2014 Alison Paterson named Chairman of the Year in the Deloitte/Management Magazine Top 200 Awards For the six months to 30 November, Abano reported Revenues of $86.7 million. Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) of $9.4 million and Operating Net Profit After Tax (Operating NPAT) of $2.2 million. Results for the interim period were down on the previous year s first six month results, which included earnings from the Bay Audiology business in New Zealand that was sold in November for $157.8 million. Excluding the recent IFRS changes, underlying earnings provided an EBITDA of $9.9 million and a NPAT of $2.8 million. Abano s continuing operations in the dental, diagnostic and rehabilitation sectors (excluding audiology due to the changes in ownership structure and sale) showed revenue growth of 16 percent, from $74.8 million in the first six months of the previous period to $86.7 million in the first six months of the current financial year. The six month result includes an equity accounted contribution from Abano s jointly held shareholding in NHC Group Pty Limited which was sold during the period, with settlement achieved after the period end on 10 December.

4 PAGE 4 - ABANO HEALTHCARE INTERIM REPORT 2011 ABANO HEALTHCARE INTERIM REPORT PAGE 5 FINANCIAL RESULTS continued A gain on sale of approximately $12 million In line with the last two years, the Abano will therefore be reported in the second half board confirmed its intention to maintain a of the current financial year. constant dividend payment of 21 cents per share for the 2011 financial year. Therefore, Following the sale and after carefully an interim dividend of 7.3 cents per share examining the company s financial position was paid in January The Dividend and considering immediate and planned Reinvestment Plan was suspended for growth opportunities, the board of Abano this dividend payment due to the share proposed a $27.3 million capital return cancellation and capital return. to shareholders by way of a pro-rata, compulsory 1 in 4 share cancellation. This Full year guidance will be provided around amount is approximately equal to the net March 2011, once trading over the Christmas proceeds that Abano received from the sale and summer holiday period has been of the NHC shareholding. The capital return assessed. and share cancellation took place in January 2011 and Abano now has 15.7 million shares on issue, down from 20.9 million. Earnings Per Share from continuing operations for the six month period to 30 November was up 29 percent to cents per share, compared to 8.15 cents per share in the previous year s first half period. This strong growth in earnings per share is expected to continue in the period ahead. Debt remains modest and we expect to have a debt: debt + equity ratio at the end of the 2011 financial year of approximately 30 percent. The Company currently has confirmed debt facilities of NZ$45 million in New Zealand and A$25 million in Australia, which will cover its investment plans in dentistry on both sides of the Tasman, radiology services in New Zealand and continued growth of Abano s joint venture audiology business in the Australian and Asian markets. CHAIRMAN AND MANAGING DIRECTOR S REPORT The first half of the 2011 financial year saw another period of concentrated growth and ongoing change for Abano. Of particular note was the sale of our stake in National Hearing Care and the capital return to shareholders which was completed on 20 January 2011, after our first half year end in November. Abano s growth strategy remains firmly in place with our short-term growth concentrated into dental and radiology, both of which will be primary contributors in the second six months of the 2011 financial year. In audiology, we are focused on consolidating operations and the relocation of the support offices and strengthening of the management teams in both Australia and Asia. Dental Partners in Australia acquired seven practices in the first half of the year and a further two since period-end, taking the network to 35 in total, based predominantly in Queensland, New South Wales, ACT and Victoria. Lumino The Dentists in New Zealand acquired four practices in the first six month period and now has 54 practices nationwide. Dental will be a key growth and income generator for Abano in the next three years with dental currently providing over half of the Company s consolidated reported revenue. To facilitate our dental growth, the Dental Partners head office relocated to new premises in Southport, Queensland in January This new facility will accommodate our growing support and back office team as well as provide a centralised training facility for clinicians.

5 PAGE 6 - ABANO HEALTHCARE INTERIM REPORT 2011 ABANO HEALTHCARE INTERIM REPORT PAGE 7 CHAIRMAN & MANAGING DIRECTOR S REPORT continued Planned annual dental growth is for between 8 and 10 new practices in New Zealand and between 15 and 20 practices in Australia and both businesses are on track to achieve those targets in the current financial year. Bay International, Abano s joint venture, equity accounted audiology operations in Australia and Asia, also grew in the first six month period and most recently announced its entry into Taiwan through the acquisition of a small audiology chain. This investment will help build the audiology management team s understanding of how to operate in this very large, traditional Chinese market. Audiology in Australia and Asia will continue to grow primarily through greenfield developments and therefore this investment is expensed through the Profit and Loss account and not capitalised through the balance sheet. As a consequence and as previously advised, we expect investment losses in the near term to continue and we do not expect any significant profit contribution from audiology for at least three to five more years. Audiology revenues are not consolidated as it is a 50 percent held joint venture. We also made the decision to accelerate the relocation of our regional audiology support offices. Firstly, from Singapore to Hong Kong to allow us to have a refreshed senior team closer to the Chinese markets of Taiwan and Hong Kong and secondly, from Brisbane to Sydney, to be closer to the New South Wales and Victoria markets. These changes have had a one-off cost which will be accounted for in the second half of the 2011 financial year, but the investment will position us well for long term growth. At the annual meeting in November, we announced we would be proceeding with investment into a $5 million PET/CT scanning service at Ascot Radiology in Auckland. This is the leading diagnostic tool in identifying and fighting cancer and is used to determine and monitor appropriate treatment and patient response. Ascot Radiology will be the second centre in Auckland to offer PET/CT scanning and one of only a handful in the country. The General Electric scanner and technology to be installed at Ascot will have several unique features not currently offered in Auckland, not the least of which is an ability to reduce the radiation dose of each study. Usually, to obtain greater clarity in PET/CT images, a reasonably high level of radiation dose is required. However, the Ascot PET/CT scanner combines new technology with leading edge equipment to ensure excellent quality images at a significantly lower radiation dose. Any reduction in radiation dose is of benefit to patients, particularly those who may have already had high exposure to radiation during cancer treatment. Access to PET/CT scanning in New Zealand is well behind other first world countries. One reason for this has been the necessity to import the isotopes required from Australia. However, with a New Zealand-based supply source becoming available early in 2011, we see the demand for this new modality growing strongly in the year ahead. Finally, we were delighted to announce that agreement was reached just prior to Christmas with the Wellington and Hutt Valley DHBs for a three year extension to the existing community pathology contract held by Aotea Pathology. With the existing five year contract due to expire in October 2011, this three year, $75 million extension now means this contract will expire in October 2014 and provides some certainty and midterm stability for both employees and the communities who use these vital services. We will be working closely with the DHBs and Government to find a long term stable solution for this business which will see it continue its 78 year history of providing a professional, high quality and seamless medical service for the wider Wellington and Hutt Valley communities. The community pathology contract extension also reflects the recent change in Government policy, where from 1 November 2011 onwards, private patients will no longer be charged for tests ordered by private specialists. From 1 November 2011, these will again be funded by the DHBs. OUTLOOK Economic and trading conditions remained challenging during the first half of the year and consumer and business confidence is still soft going into the second half. While healthcare is relatively protected from economic downturns, many areas of our Group are still dependent on discretionary healthcare spending and both the Australian and New Zealand economies remain sluggish. We were very thankful that our South Island dental surgeries and our Orthotic South Island business in Christchurch were all unaffected by the earthquakes and ongoing after shocks. However, the January 2011 floods in Australia have affected a small number of dental and audiology clinics. We are relieved that no staff were directly affected and all our facilities are intact. Because of the enormous disruption to many communities in the area, trading in January and February will be affected for these clinics. Our thoughts are with all the families and communities who have been impacted by these natural disasters. In New Zealand, ACC policy changes implemented in early continued to impact in several businesses. We have yet to see any substantial improvement in referrals, particularly in our brain injury rehabilitation business which is almost totally funded by ACC and Ministry of Health contracts. Radiology was also affected through cancelled MRI and CT studies by Orthopaedic specialist referrals which were declined by ACC.

6 PAGE 8 - ABANO HEALTHCARE INTERIM REPORT 2011 ABANO HEALTHCARE INTERIM REPORT PAGE 9 CHAIRMAN & MANAGING DIRECTOR S REPORT continued We have seen a slow improvement in recent weeks and we are watching closely. Abano has an experienced management team, strong operating cashflows and funding facilities in place for continued investment and growth. While the headline performance is below last year given the sale of Bay Audiology s New Zealand operations, our continuing operations for the six month period grew by 29 percent compared to the same period last year, as seen by our EPS performance. We have many attractive opportunities in New Zealand, Australia and Asia in core businesses we know well and we continue to review new, compatible investment opportunities. Abano Healthcare Interim Financial Statements For the six month period to 30 November Our proven Co-Invest and Build model remains a central pillar of our growth strategy and we will continue to be a leading healthcare investor and clinicians partner of choice in the Australasian region. Although the legacy of the global economic crisis continues to be felt, the Abano board is confident that the Abano Group will continue with its track record of growth and performance, delivering value to our shareholders. Alison Paterson Chairman Alan Clarke Managing Director

7 PAGE 10 - ABANO HEALTHCARE INTERIM REPORT 2011 ABANO HEALTHCARE INTERIM REPORT PAGE 11 Consolidated Income Statement For the six months ended 30 November (unaudited) NOTE NOV Total NOV Discontinued Operations NOV CONTINUING OPERATIONS NOV Total NOV Discontinued Operations NOV CONTINUING OPERATIONS Revenue 86,680-86, ,331 27,518 74,813 Changes in inventories (11,384) - (11,384) (16,542) (6,650) (9,892) Patient consumables (3,773) - (3,773) (3,656) - (3,656) Employee benefits (49,006) - (49,006) (50,294) (8,591) (41,703) Depreciation and amortisation expenses (3,006) - (3,006) (3,566) (989) (2,577) Occupancy costs (5,832) - (5,832) (6,933) (2,071) (4,862) Acquisition costs (517) - (517) Other operating expenses (6,292) - (6,292) (11,946) (5,884) (6,062) Other operating income Operating profit 2 7,250-7,250 9,417 3,333 6,084 Net financing costs (1,162) - (1,162) (4,394) (2,643) (1,751) Fair value amortisation on deferred acquisition (121) - (121) (493) (493) - consideration Gain on sale of subsidiary/business ,714 77,714 - Share of profit/(loss) of associates and jointly (892) - (892) (27) 115 (142) controlled entities Profit before income tax 5,145-5,145 82,217 78,026 4,191 Income tax expense (1,930) - (1,930) (1,296) (164) (1,132) Profit for the period 3,215-3,215 80,921 77,862 3,059 Attributable to: Minority interest share of profit/(loss) 1,018-1, (204) 1,164 Equity holders of the Company share of profit 2,197-2,197 79,961 78,066 1,895 Profit for the period 3,215-3,215 80,921 77,862 3,059 CENTS CENTS Earnings per share (from continuing operations) Earnings per share (from discontinued operations) Earnings per share (total) CONSOLIDATED Statement of comprehensive income For the six months ended 30 November (unaudited) NOV NOV Profit for the period 3,215 80,921 Other comprehensive income Cash flow hedges, net of tax 159 1,855 Exchange differences on translating foreign operations (663) 308 Total comprehensive income for the period 2,711 83,084 Total comprehensive income attributable to: Equity holders of the Company 1,693 82,124 Minority interests 1, ,711 83,084

8 PAGE 12 - ABANO HEALTHCARE INTERIM REPORT 2011 ABANO HEALTHCARE INTERIM REPORT PAGE 13 Consolidated BALANCE SHEET As at 30 November (unaudited) ASSETS Note NOV NOV MAY Non-current assets Property, plant and equipment 3 28,802 26,465 26,581 Intangible assets 88,094 77,109 80,733 Investments in associates and jointly controlled entities 7,737 25,858 24,723 Derivative financial instruments Non-current receivables 9,579 3,386 5,093 Deferred tax assets 984 1, Total non-current assets 135, , ,014 Current assets Cash and cash equivalents 6,620 32,571 5,493 Trade and other receivables 10,595 11,657 11,861 Inventories 5,473 4,585 5,025 Current income tax assets 3,011-1,513 Assets held for sale 16, Derivative financial instruments Total current assets 42,020 48,813 23,892 Total assets 177, , ,906 EQUITY Share capital 41,375 55,223 41,348 Retained earnings 67,538 71,054 68,237 Cash flow hedge reserve Foreign currency translation reserve (755) (420) (92) Total equity attributable to equity holders of the parent 108, , ,493 Minority interest 2,242 3,009 3,897 Total equity 110, , ,390 LIABILITIES Non-current liabilities Borrowings 6 33,186 14,878 19,415 Trade and other payables 3,932 4,791 4,519 Deferred tax liabilities Deferred acquisition consideration 4,806 3,499 2,792 Total non-current liabilities 42,384 23,502 27,131 Current liabilities Borrowings 2,543 1, Derivative financial instruments Deferred acquisition consideration 1,097 1,875 2,951 Current income tax liabilities 2, ,375 Trade and other payables 18,029 26,927 16,510 Total current liabilities 24,273 30,717 21,385 Total liabilities 66,657 54,219 48,516 TOTAL EQUITY AND LIABILITIES 177, , ,906 Net assets per share $5.29 $5.57 $5.43 Net tangible assets per share* $1.08 $2.25 $1.56 *Net assets less intangible assets Consolidated STATEMENT OF CASH FLOWS For the six months ended 30 November (unaudited) Note NOV NOV Cash flows from operating activities Receipts from customers 88,270 74,912 Payments to suppliers and employees (75,430) (66,429) Interest received Interest paid (1,133) (1,946) Income tax paid (2,310) (378) Discontinued operations - 5,636 Net cash generated from operating activities 9 9,581 12,041 Cash flows from investing activities Sale of property, plant and equipment - 52 Sale of subsidiaries/businesses ,575 Purchase of property, plant and equipment (3,183) (1,728) Purchase of subsidiaries/businesses (10,140) (4,132) Investment in associates - (26,000) Other investment income - (1,752) Dividends paid to minority interest shareholders (84) (161) Other investing cash flows (4,493) (2,375) Discontinued operations - 24,178 Net cash generated/(used) in investing activities (17,676) 91,657 Cash flows from financing activities Net proceeds from/(settlements of) borrowings 12,810 (41,723) Dividends paid (2,895) (2,869) Discontinued operations - (32,079) Net cash generated/(used) in financing activities 9,915 (76,671) Net increase in cash held 1,820 27,027 Cash at beginning of the period 5,380 4,880 Net increase in cash held 1,820 27,027 Exchange gain/(loss) on net assets held by foreign subsidiaries (663) 308 Cash at end of period 6,537 32,215 Cash comprises Cash at bank 6,620 32,571 Bank overdrafts (83) (356) 6,537 32,215

9 PAGE 14 - ABANO HEALTHCARE INTERIM REPORT 2011 ABANO HEALTHCARE INTERIM REPORT PAGE 15 Consolidated Statement of changes in equity For the six months ended 30 November (unaudited) SHARE CAPITAL TREASURY SHARES FOREIGN EXCHANGE TRANSLATION RESERVE CASH FLOW HEDGE RESERVE RETAINED EARNINGS TOTAL MINORITY INTEREST Balance at 1 June 56,115 (918) (728) (1,336) 6,165 59,298 3,193 62,491 total equity Comprehensive income Profit for the period 79,961 79, ,921 Other comprehensive income Cash flow hedges: Fair value gains 2,650 2,650 2,650 Tax benefit on fair value gains (795) (795) (795) Foreign exchange translation reserve Total other comprehensive income ,855-2,163-2,163 Total comprehensive income ,855 79,961 82, ,084 Transactions with owners Dividends paid (15,069) (15,069) (1,563) (16,632) Share options expense Minority share of losses transferred to comprehensive interest on sale of Bay Audiology Total transactions with owners (15,069) (15,043) (1,144) (16,187) Balance at 30 November 56,141 (918) (420) , ,379 3, ,388 Balance at 1 June 41,865 (517) (92) - 68, ,493 3, ,390 Comprehensive income Profit for the period 2,197 2,197 1,018 3,215 Other comprehensive income Cash flow hedges: Fair value gains Tax benefit on fair value gains (68) (68) (68) Foreign exchange translation reserve (663) (663) (663) Total other comprehensive income - - (663) (504) - (504) Total comprehensive income - - (663) 159 2,197 1,693 1,018 2,711 Transactions with owners Dividends paid (2,896) (2,896) (2,673) (5,569) Share options expense Total transactions with owners (2,896) (2,869) (2,673) (5,542) Balance at 30 November 41,892 (517) (755) , ,317 2, ,559

10 PAGE 16 - ABANO HEALTHCARE INTERIM REPORT 2011 ABANO HEALTHCARE INTERIM REPORT PAGE 17 notes to the INTERIM financial statements notes to the INTERIM financial statements 1. Statement of Accounting Policies Except as described below, the accounting policies used in the preparation of the interim financial statements are consistent with those of the financial statements for the year ended 31 May. The interim financial statements are prepared in accordance with New Zealand Generally Accepted Accounting Practice (NZ GAAP). They comply with NZ IAS 34 and IAS34: Interim Financial Reporting. These interim financials statements should be read in conjunction with the annual financial statements for the year ended 31 May, which have been prepared in accordance with New Zealand equivalents to International Financial Reporting Standards. The following standards and amendments to standards are mandatory for the financial year beginning 1 June. NZ IFRS 3 (revised), Business combinations, and consequential amendments to NZ IAS 27, Consolidated and separate financial statements are effective prospectively to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after 1 July. The revised standard continues to apply the acquisition method to business combinations but with some significant changes compared with NZ IFRS 3. All payments to purchase a business are recorded at fair value at the acquisition date, with contingent payments classified as debt subsequently remeasured through the statement of comprehensive income. All acquisition related costs, previously recorded as goodwill, are now expensed. In the current financial period this resulted in acquistion costs of $0.5m being expensed in the income statement (30 November : $0.1m recorded as goodwill). There were no other material impacts resulting from the change in standards for the current financial period. 2. Segment Information Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker. The chief operating decision maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the Abano Board. Management has determined the operating segments based on the reports reviewed by the Board that are used to make strategic decisions. The reportable operating segments have been determined as Dental, Diagnostics and Rehabilitation. During the prior financial year operating segements forming the Audiology reportable segment were sold and have been disclosed as discontinued operations. Remaining jointly controlled Audiology entities are accounted for using the equity method as prescribed for investments in associates. NOV NOV Operating result for reportable segments 8,447 7,705 Unallocated corporate overheads (1,197) (1,621) Operating Profit 7,250 6,084 Net financing costs (1,162) (1,751) Fair value amortisation on deferred acquisition consideration (121) - Gain on sale of business 70 - Share of loss of associates (892) (142) Profit before income tax and discontinued operations 5,145 4,191 TOTAL DISCONTINUED OPERATIONS AUDIOLOGY TOTAL TOTAL CONTINUING OPERATIONS REHABILITATION DIAGNOSTICS DENTAL Segment revenue 11,286 10,632 19,086 19,127 56,329 45,053 86,701 74,813-27,633 86, ,446 (892) (142) - - (892) (142) Share of profit in associates Segment operating 1, ,714 3,119 4,171 3,746 8,447 7,705-2,726 8,447 10,431 results ,985 1,439 2,940 2, ,940 3,489 Depreciation and amortisation Unallocated ,006 3,566 Acquisition costs Total assets 17,385 18,226 32,303 33,365 90,005 72, , , , ,457 7,737 25,858 Investment in associates and jointly controlled entities Unallocated 29,786 33, , ,604 Total liabilities 3,091 2,173 13,269 12,379 40,581 29,115 56,941 43, ,941 43,667 Unallocated 9,716 10,552 66,657 54,219 Capital expenditure , ,893 1,287-3,498 2,893 4,785 (1) Operating results include the allocation of attributable corporate overheads. Unallocated costs are specific to the Company. (2) Adoption of NZ IFRS 3 (revised) requires acquistion costs to be expensed in the income statement. In prior years these costs were recorded as goodwill on acquisition.

11 PAGE 18 - ABANO HEALTHCARE INTERIM REPORT 2011 ABANO HEALTHCARE INTERIM REPORT PAGE 19 notes to the INTERIM financial statements notes to the INTERIM financial statements 3. Property, Plant and Equipment During the period to 30 November the Group acquired property, plant and equipment with a cost of $2,896,498 (30 November : $4,836,808). An additional $2,109,028 of property, plant and equipment was acquired as part of business acquisitions during the period (30 November : $613,813). The acquired businesses have contributed revenue and EBITDA to the Group, in the period from their acquisition date to 30 November, of $4.7m and $1.1m respectively. Management do not believe that it is possible to reasonably estimate what the revenue and profit from the business combination would have been if they had been part of the Group from the beginning of the period. 4. Acquisition of Businesses During the period to 30 November the Group acquired the following businesses for a total cash consideration of $8.7 million. All acquisitions were asset purchases with the Group obtaining 100% control. Acquisition Date Lismore Dental Practice (New South Wales) 4 Jun Evatt Dental Care (Australian Capital Territory) 16 June Hallet Cove Dental (South Australia) 7 July Windsor Chiro & Dental (New South Wales) 13 Aug 5. Disposal of Investment in Associate On 29 September the Group announced the sale of its jointly held 13% shareholding in NHC Group Pty Limited (NHC). NHC is an Australasian audiology company which acquired Bay Audiology Limited from Abano in November. As part of the Bay sale transaction, Abano and interests associated with Bay s founder, Peter Hutson, acquired the shareholding in NHC, on a 50:50 basis, for an investment of NZ$30 million. NHC was subsequently sold to Amplifon Group for a total consideration of A$460 million. The sale went unconditional in early December and settlement occurred on 10 December.The Group s share of proceeds, after repayment of NHC s enterprise debt, sale costs and closing adjustments, will be approximately NZ$28 million. John Sotis Dental Surgery (Queensland) 30 Sept Boyd Street Dental (New South Wales) 30 Sept Matthew Flinders Dental (Victoria) 30 Sept Max & Beresford (Auckland) 1 Oct The Willows Dental Centre (Tauranga) 11 Oct Beale & Radka (Invercargill) 22 Oct 6. Borrowings The Group s net bank debt as at 30 November was $26.0m. (30 November : Cash in excess of bank debt was $18m). The Group currently has facilities of $45m with ASB ($8.3m utilised) and A$25m with Commonwealth Bank of Australia (A$18.8m utilised). Wairakei Dental Centre (Christchurch) 30 Nov 7. Subsequent events Summary of the effect of the acquisitions: DENTAL Fair value of net assets acquired: Current assets 744 Current liabilities (155) Non-current assets 2,109 Goodwill on acquisition 6,032 Consideration paid 8,730 Deferred acquisition consideration 1,528 Share Buy Back Scheme On 30 November a resolution was approved at the Annual General Meeting to return $27.3m to shareholders through a complusory 1 for 4 share cancellation at $5.23 per share. The share buy back received court approval on 17 December. A record date of 12 January 2011 was announced on 21 December, with a payment date of 20 January General Information The Group is a profit-orientated limited liability entity incorporated and domiciled in New Zealand, with businesses in Australia, Singapore, Malaysia and Hong Kong. Total consideration 10,258 Goodwill on acquisition 6,032 Deferred acquisition consideration 1,528 Total goodwill recognised 7,560

12 PAGE 20 - ABANO HEALTHCARE INTERIM REPORT 2011 notes to the INTERIM financial statements DIRECTORY 9. Reconciliation of Operating Cash Flows For the six months ended 30 November (unaudited) NOV NOV Profit for the period 2,197 79,961 Non-cash items: Depreciation and amortisation 3,006 3,565 Utilisation/(recognition) of deferred tax asset (168) 1,686 Fair value amortisation on deferred acquisition consideration Fair value movement on derivatives - 1,557 Executive compensation expense Minority interest share of profit 1, Share of loss in associates and jointly controlled entities 892-4,896 8,287 Movement in working capital: Decrease in trade and other receivables ,372 Increase/(decrease) in trade and other payables 1,077 (16,895) 1,901 1,477 Items classified as investing activities: Realised loss on sale of property, plant and equipment - 2 Realised (gain) on sale of subsidiaries - (77,714) Acquisition costs Other investment income (77,684) Net cash flows from operating activities 9,581 12,041 Directors Alison Mae Paterson Chairman Appointed 16 October 2002 Trevor David Janes Deputy chairman Appointed 23 September 2005 Alan William Clarke Appointed 31 October 2001 Susan Marie Paterson Appointed 23 September 2005 Peter Lionel Hutson Appointed 25 November 2008 Danny Chan Appointed 19 December 2008 AUDIT COMMITTEE Trevor Janes (chair), Alison Paterson, Danny Chan REMUNERATION COMMITTEE Susan Paterson (chair), Alison Paterson NOMINATION COMMITTEE All board members REGISTERED OFFICE AND ADDRESS FOR SERVICE Level 16 West Plaza Building 3-7 Albert St, Auckland AUDITORS PricewaterhouseCoopers PricewaterhouseCoopers Tower 188 Quay St, Auckland BANKERS ASB Bank Limited 135 Albert St, Auckland Commonwealth Bank of Australia 240 Queen St Brisbane, Australia SOLICITORS Buddle Findlay PricewaterhouseCoopers Tower 188 Quay St, Auckland Harmos Horton Lusk Vero Centre 48 Shortland Street, Auckland SHARE REGISTRAR Computershare Investor Services Limited 159 Hurstmere Road Takapuna, Auckland Abano Healthcare Group Limited P O Box Auckland 1143 Telephone: Facsimile: enquiries@abanohealthcare.co.nz Internet:

13 Abano Healthcare Group Limited P O Box Auckland 1143 Telephone: Facsimile: enquiries@abanohealthcare.co.nz Internet: