Archive | Abano

Propbd on Q F3Oct14 – FMA questions bid collusion, east-west strategy questioned, residential average bounces

FMA pursues Archer & Hutsons over alleged disclosure breaches
Selwood questions east-west connection strategy
Barfoots’ average sale price bounces as $1 million-plus sales rise

3.25pm:
FMA pursues Archer & Hutsons over alleged disclosure breaches

The Financial Markets Authority has filed & served civil proceedings against Australian private equity group Archer Capital Pty Ltd and Healthcare Industry Ltd (Anya & Peter Hutson) for alleged breaches of the substantial shareholder disclosure obligations contained in the Securities Markets Act in relation to shares in Abano Healthcare Group Ltd.

Archer & Healthcare Industry filed substantial shareholder notices on 16 September 2013 in relation to substantial holdings in Abano. The authority alleges an agreement, arrangement or understanding to act in concert in relation to Abano shares existed between the parties before that date, and therefore the notices should have been filed earlier.

The authority is seeking declarations of contravention & pecuniary penalties.  The maximum pecuniary penalty for a contravention of the event disclosure provisions of the act is $1 million.

Archer failed in a 2013 bid to take over Abano. The Hutsons, who own an audiology business in partnership with Abano, joined Archer in the takeover bid and, this year, tried unsuccessfully to unseat Abano chairman Trevor Janes. Mr Hutson was an Abano director but resigned after the takeover bid was withdrawn.

Selwood questions east-west connection strategy

NZ Council for Infrastructure Development chief executive Stephen Selwood said today the joint NZ Transport Agency-Auckland Transport east-west connection project would address urgent Penrose-Onehunga freight needs but a long-term solution required far more than that, and the strategy outlined yesterday through 6 options put out for feedback was unclear.

Mr Selwood said it was a critical corridor which also needed to cater for planned residential intensification and growth from the eastern suburbs to the airport. But he but commented: “Too often major projects in New Zealand are developed in a piecemeal fashion and modified & reduced to satisfy environmental & local interests without adequate consideration of strategic implications or the relative cost of lost accessibility & reduced economic efficiency.”

Earlier story today: East-west “connections” feedback sought – with no closing date

Barfoots’ average sale price bounces as $1 million-plus sales rise

Barfoot & Thompson’s average residential sale price fell $7,500 in August, then rose $27,000 in September. At $738,876, was $13,000 up on the previous high, recorded in March.

The big change came from a sharp rise in $1 million-plus sales, up from 149 (16.4% of the agency’s 909 sales) in August to 164 (17.1% of 959).

Sales for less than $500,000 accounted for 30.1% of all sales in September, down from 33.4% in August.

In contrast to the average price, the agency’s median (excluding the outliers) was on par with the medians of the previous 4 months at $635,000.

Managing director Peter Thompson expects a post-election lift as normal spring trading resumes: “New listings, at 1314 for the month, were already starting to build and were up 16.4% on listings during August and only 5.9% down on July’s 1396 new listings.”

Attribution: FMA, NZCID, Barfoot.

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Abano cuts loss as it changes course

Published: 31 July 2005


Abano Healthcare Group Ltd still made a loss in the May 2005 year, but a smaller one than in 2004.



It reduced the loss from $452,000 in 2004 to $38,000 on a 2.9% rise in operating revenue, to $66.7 million. Pretax, it went from a $427,000 loss to a $299,000 profit. Ebitda rose from $6.8 million to $7.6 million. Earnings/share went from a negative 0.22c to a negative 0.16c.  Abano’s board & management began looking late last year at changing the group’s business portfolio to generate a higher return on invested capital. It acquired new businesses and decided in May to sell ElderCare NZ Ltd to Macquarie Bank Ltd.It strengthened the capital structure with a placement to RECT Funds Management Ltd, the Rotorua Energy Charitable Trust’s investment arm, undertook a 1:10 share consolidation and cut debt from $36.4 million to $34 million.Abano now has businesses in 3 sectors – rehabilitation, diagnostics & dental. It will add audiology in October when it acquires 70% of Bay Audiology.


Website: Abano


 


25 May 2005: Abano sells ElderCare to Macquarie


29 January 2005: Abano cuts loss, asks Clavell Capital to look at aged-care options


2 December 2004: Rotorua energy trust raises Abano Healthcare stake to 15%


2 November 2004: Abano finalises first placement stage, adds to acquisitions programme


 


If you want to comment on this story, write to the BD Central Discussion forum or send an email to [email protected].

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Abano sells ElderCare to Macquarie

Published: 24 May 2005


Abano Healthcare Group Ltd has conditionally sold ElderCare NZ Ltd to Macquarie Bank Ltd. Macquarie will pay $63.5 million for ElderCare’s equity & the related intercompany loan from Abano.Settlement is expected to occur by the end of July, following satisfaction of conditions, including approval of the sale by Abano’s shareholders at a special meeting to be held on 27 June, and the approval of the Overseas Investment Commission. Abano Healthcare’s board has been conducting a strategic review for 5 months of the aged-care sector, the market environment & the ElderCare business.It considered 3 options for the aged-care business – growth through acquisition & expansion, release of capital in the land & buildings through sale & subsequent leaseback, and the sale of part or all of the aged-care portfolio.Chairman Jim Syme said ElderCare had been a cornerstone business for the group, providing a platform for its evolution into the wider medical & healthcare markets.”However, we believe the future of the aged-care industry in New Zealand lies with substantial organisations who have a lower cost of capital and who are able to spread administrative costs and achieve the required economies of scale.”The aged-care sector is very capital-intensive and we would be required to spend significant amounts to maintain & upgrade existing homes and acquire additional facilities. The board does not believe we would obtain the margins necessary to achieve our required return on capital.”Mr Syme said a number of industry & investment organisations submitted offers for ElderCare. “We believe this decision provides the most positive outcome for the future of ElderCare, its staff & residents, all of whom will benefit from funding & support from Macquarie, which is a successful & established organisation with an appropriate capital structure, a long-term view and a commitment to continuing our established quality of care.”


Macquarie now in aged care in Canada, Australia, NZMacquarie has bought ElderCare as a vehicle to enter the New Zealand aged-care market. Mr Syme said it intended to retain the business as a long-term investment opportunity with no changes to operations, management structures or staffing planned. Macquarie has also recently acquired Canada’s largest aged-care provider, Leisureworld, and, through its investment in Retirement Care Australia, a portfolio of Australian aged-care facilities from the Salvation Army.Mr Syme said the sale would allow Abano to achieve a higher return on invested capital across the group and would facilitate its ability to invest in less capital-intensive & more profitable healthcare & medical service businesses, as well as providing capital funds for the expansion of existing businesses.”The sale will result in a capital profit of about $10.5 million and we have decided to return a portion of this profit to shareholders in coming months. We are satisfied that this will not affect the group’s ability to take advantage of a number of attractive investment opportunities currently under negotiation, with announcements on progress to be made shortly.”The sale is expected to enhance the group’s profitability from 2005-06 onwards, with an expected increase in our return on invested capital. With this in mind, the board believes there will be the ability to initiate an annual dividend programme by the end of the 2006 financial year.”


Earnings guidance


Abano also provided market guidance today for results for the May 2005 year.Managing director Alan Clarke said the group made steady progress after a soft start. It’s looking at $65-66 million revenue, ebitda of $7.2-7.5 million and a small net loss after tax.


Earlier stories:


29 January 0205: Abano cuts loss, asks Clavell Capital to look at aged-care options


2 December 2004: Rotorua energy trust raises Abano Healthcare stake to 15%


2 November 2004: Abano finalises first placement stage, adds to acquisitions programme


 


If you want to comment on this story, write to the BD Central Discussion forum or send an email to [email protected].


 

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Abano cuts loss, asks Clavell Capital to look at aged-care options



Published: 29 January 2005


Listed healthcare & medical services provider Abano Healthcare Group Ltd improved its net result markedly in the November half, but didn’t quite make it into the black. 



Abano’s chairman, Jim Syme, also announced on Friday that Clavell Capital Ltd (David Belcher & Carl Peterson) had been appointed to look at strategic opportunities for Abano’s aged-care sector.


The company’s deficit for the half year fell 86%, from $312,000 in 2003 to $45,000 on operating revenue down 1.9% to $33 million.


The company won’t be paying an interim dividend.


The pretax surplus fell 39% to $434,000. After tax, minorities & extraordinaries, Abano had a $45,000 deficit. Earnings/share fell from 16c to 2c. Ebitda fell from $4.5 million to $4 million.


Bank debt was cut by $5 million to $30.2 million after RECT Funds Management paid $5.23 million for 15.5% of the company. During the first half, Abano put a number of strategic initiatives in place to improve & advance its long-term capital structure & performance. These initiatives included:

signing agreements to buy 3 new businesses, with discussions progressing on the purchase of a 4th
investment in 2 of the group’s key aged-care facilities
RECT Funds Management’s purchase of 15.5% of the company, and
a 1:10 share consolidation, effective from 14 December 2004.

The biggest change for Abano, though, was the selldown by Cullen Investments Ltd & other parties associated with Eric Watson, from 55.09% to 18.5%. The first new acquisition, 100% of Victoria Ave Dental Centre, settled on 1 December. The next 2, 100% of Auckland Dental Group & 40% of Ascot Radiology (with an option to acquire a further 40%) are due to settle on Tuesday 1 February. Managing director Alan Clarke, said first-half revenue reflected an improved performance from Abano Aged Care, due in part to the new 18-bed extension at Whitianga, and steady returns from the other 3 sectors – Diagnostics, Dental and Rehabilitation. He said Abano should improve its financial results as the new businesses settle.


Chairman Jim Syme said the Clavell Capital appointment was “part of our standard review of each of the company’s operating sectors”. Clavell would look at “expansion & acquisition, release of the capital in the land & building assets, or sale of part or all  of the aged-care portfolio.”


Earlier stories:


2 December 2004: Rotorua energy trust raises Abano Healthcare stake to 15%


2 November 2004: Abano finalises first placement stage, adds to acquisitions programme


 


If you want to comment on this story, write to the BD Central Discussion forum or send an email to [email protected].

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Rotorua energy trust raises Abano Healthcare stake to 15%

RECT Funds Management Ltd, the Rotorua Energy Charitable Trust’s investment arm, has taken up its 2nd placement of new shares in Abano Healthcare Group Ltd.


The placements follow major shareholder Cullen Investments Ltd’s decision to sell down from 35% to 19.9%.


The Rotorua trust bought 10% of Abano for $2.86 million in the first placement on 2 November, and 7.5% for $2.3 million in the 2nd, at 13c/share.


Abano’s annual meeting on 29 November ratified the first transaction and, after shareholders agreed to a constitutional change allowing placement of up to 15% of the company’s stock, the 2nd transaction went unconditional.Abano operates in 4 sectors – aged care, rehabilitation, diagnostics & dental. Subsidiary entities include Burtons Healthcare, Health Partners, Ranworth Healthcare, Medical Laboratory Wellington, Nelson Diagnostic Laboratories, ElderCare NZ & Geddes Dental Group.

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Abano finalises first placement stage, adds to acquisitions programme

Abano Healthcare Group Ltd finalised the first stage of its placement of new capital today, and also entered an option agreement to buy Calan Healthcare Properties Trust’s 20% of Ascot Radiology Ltd, giving it 100% of Ascot.


2 years ago both Abano & Calan were bogged down by heavy capital investment & inadequate cashflow, and both have worked on turning themselves round.


Calan has concentrated on developing its Epworth Eastern Hospital in Melbourne while it’s tried to sell off its Waitemata Private site next to North Shore Hospital (the sale is now set for this Friday, 5 November, after the appeal period on the resource consent), its Artemis Medical Centre site (sale fell through in July) and Ascot assets.


Abano, incorporated in 1961 as the NZ Petroleum Co Ltd, was turned into Eldercare NZ Ltd in 1999, with a change in name to Abano, & direction change, in August 2003. It’s been backed by Cullen Investments Ltd (Eric Watson).


Cullen said on 29 October it would sell 35% of Abano, leaving it with 19.9% after the placement of new shares to RECT Funds Management (the Rotorua Energy Charitable Trust’s investment arm).


The Cullen selldown was completed quickly, and the Rotorua trust completed purchase of its first 10% during a halt in trading of Abano shares, which ran from 28 October until 1 November. RECT Funds Management is to buy another 7% of Abano stock after Abano’s annual meeting on Monday 29 November.


RECT Funds Management will end up with 15% of Abano through these placements, for a minimum investment of $5.2 million.


Meanwhile, Abano has embarked on an acquisition & development programme, signing conditional agreements to buy 2 enterprises, a substantial agreement for a 3rd, and a decision to increase the value of its aged-care business through integrated care developments at 2 of its facilities.


The acquisitions:

40% of Ascot Radiology in February 2005, with an option to take another 40% by May 2007

Abano is developing discussions to acquire 80% of a 2nd radiology practice, planned for completion in early 2005. Both businesses will form a part of Abano Diagnostics and will complement the community pathology laboratory testing businesses already owned by the group

conditional agreement to buy 100% of Auckland Dental Group, with settlement planned for early 2005.

The place of Calan’s Ascot stake:The option agreement gives Abano the right to acquire Calan’s interest in Ascot Radiology in April 2007 for a price determined by reference to an earnout formula, which is linked to the practice’s profitability. The sale price (depending on actual profitability achieved) could range from $500,000 to in excess of $1 million. Should the profitability not achieve a pre-agreed level, either party has the right to terminate the option agreement. Based on Ascot Radiology’s current management forecast for the year to March 2007, the sale price for the trust would be $1 million. The current book value of this investment is $100,000.


Abano Healthcare currently operates 7 businesses across 4 sectors – aged care, dental, diagnostics & rehabilitation.Internal development:Abano also announced plans to undertake an integrated apartment development at the ElderCare waterfront aged-care facility in Whitianga, and to extend the care facilities at Gracelands retirement village & nursing home in Hastings by 14 beds. The company said these initiatives would cost it $3.5 million by next February, and an estimated $6 million more would be required in the next 3 years. It will opay for the acquisitions in cash, using the RECT placement money.


Future operationsAbano said all the new businesses would continue to operate independently within the group, but would take advantage of back-office synergies & management efficiencies.


In line with the group’s acquisition policies, the 3 new businesses are projected to generate a return on total funds invested of over 20% of their individual operating ebitda, and over 15% on their operating net profit after tax. The new diagnostics stream is predominantly private fee payment, with strong growth opportunities. “Radiology has been identified as an attractive sector for investment which offers additional potential for the group. As New Zealand’s population ages, the need for enhanced diagnostic & interventional services such as radiology increases,” Abano managing Alan Clarke said.


Abano entered the dental market in November 2002, when it bought Geddes Dental Group. It’s since made significant investment in software & management processes. R Clarke said the sector was now well placed to grow organically & through acquisition, offering substantial back-office synergies & savings as the network expanded. Auckland Dental Group adds a 2nd brand level to Abano Dental, with future investments in other community-based practices planned to support the development & evolution of the brand.


“Through such acquisitions, we will establish partnerships with clinicians, where our corporate & management skills complement the entrepreneur & clinical skills already successfully in place,” Mr Clarke said. The $5.5 million planned development activity in Abano Aged Care will add 21 serviced apartments to the premium waterfront Whitianga continuing care facility. They will be sold under a licence to occupy. Mr Clarke said projections indicated the investment would return in excess of 25% on the funds employed.Projected returns from the Hastings expansion & upgrade exceeded 12%.


Abano chairman Jim Syme said the company was now looking at half-year revenue of $32.5-33.5 million, ebitda of $3.7-4.3 million & net profit after tax around break-even. He said the full benefit of the acquisitions, developments & placement would come in the financial year starting June 2005.Websites:


Abano Healthcare


Rotorua Energy Charitable Trust


 

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