ABA Abano health

[percy]

I have read a report by craigs "analysis of the hearing aid market".
Excellent.The area of greatest growth Asia.This is interesting as it is the area ABA are focussing on.
Most hearing aids are at present sold through electrical stores.As any deaf person will tell you to get the best from a hearing aid you need a plug moulded into your ear and the hearing aid computer set to suit your hearing.Surprise ABA do this while electrical stores do not. The ageing population means huge growth.This company has had outstanding performance.Asia will take time but the results will come.I seem to remember ABA was working with a major hearing aid manufacturer.

[percy]

I have just read the chairman"s and the MD's addresses to the AGM.I am sure the foundations for future growth in Australia and Asia are right.Not a lot of growth in the short term,but potential for huge growth in the longer term.Very pleasing.

[Catalyst]

Percy, I have also just read the Chairman's and MD's addresses to the AGM. My take on it was that ABA will not see much profit growth for the next 2-3 years because the Asian start-up costs will offset any growth in their other sectors. Audiology in Asia seems too much of a variable at the moment. If they can get it right and replicate the NZ audiology model then ABA will do very well but at the moment it's a wait and see for me.

[percy]

Catalyst,
Yes,will take time.The Asian market will take time.ABA model has to first prove itself in Asia before they really can ramp it up.very few deaf Asians wear hearing aids and the greatest world wide growth in hearing aids is expected to come from Asia.I expect the model will work. Then we will see huge growth.I do not know when the best time would be to buy in,or what value the shares are worth.What I do see is 1,000s or more outlets in Tawain,Hong Kong,Singapore and Malaysia being worth big dollars,and me owning part of it.This company knows what it wants to achieve,and has proven that they do what they say they will do.

[BWH]

What's going on? The shareprice has done nothing but drop over the last couple of weeks.

[blackcap]

SAM selling out?

[percy]

There are a lot of sellers and few buyers.Is in a down trend .The last report I read said it would be a long time before Asain hearing clinics were profitable.

[darksentinel]

Thank you Phaedrus et al for teaching me to (sometimes) recognise a downwards trendline break and sell at a profit!

[Phaedrus]

It is good that you are finding TA to be useful, DS - there certainly was a nice clear end to that spectacular uptrend, wasn't there!

ABA was down another 4% today.

The chart clearly shows when the "big money" got out as evinced by the marked "step" in the OBV and the big volume spike. Didn't they do well?
Note how even a simple Trailing Stop (usually the last indicator to fire) got you out well before the downtrend really hit its stride.

"Buy and Hold" sucks eh? - even with "good" stocks.

http://i602.photobucket.com/albums/tt102/PhaedrusPB/ABA215.gif

[Arbitrage]

If it is "smart money" getting out, what does this say about Kingfish Ltd? 4% of its portfolio is ABA which they have held for quite some time.

[Phaedrus]

Perhaps it gives us a clue as to how/why Kingfisher fails to outperform NZ market Indices.

Their fortunes are washing in and out with the tidal ebb and flow of the market.

That's exactly what happens when you "buy and hold".

[ratkin]

Before rubbishing buy and hold why not draw a ten year chart , then tell us its been a poor investment? Buy and hold is a long term strategy , therefore a long term chart would be needed to judge the success of an investment. Dont forget to include the dividends , Plus the 25% share cancellation and return to shareholders at 5.23 in january.
Look forward to seeing it

[Phaedrus]

ABA has been a good investment and was quite a reasonable "Buy and Hold" candidate - until the uptrend ended.

They all do.

For 18 months now, "long-term" holders have been in the process of giving their profits back to the market.

[Lego_Man]

Who here actually buys and holds for 10 years?

[Arbitrage]

Me and Warren Buffett.

[ratkin]

Probably more than you imagine.

Can anyone here beat 1977 ? My father bought me some tesco shares as a reward for passing my "o" levels
He chose Tesco for me because i was going out with one of the tesco checkout girls at the time. I still hold them now.

Thank goodness she didnt work in Ratners :)

[Lego_Man]

Isnt Buffett's average holding period 2-3 years? Which would align nicely with Mr P's "medium-long term uptrend" ideas.

[Phaedrus]

Who here actually buys and holds for 10 years?


Me and Warren Buffett.'Fraid not Arb - maybe just you and Ratkin!

Measured over 26 years, Buffett's average holding time of an investment is only one year, with only 20% of the stocks being held more than two years. Nearly a third (30%) were sold in less than six months.

[POSSUM THE CAT]

Still have some I bought in 1987

[Arbitrage]

Buffett started buying Coca Cola shares in 1988. Apparently one of his most lucrative holdings which he still has today.

[Arbitrage]

However I still hold a miniscule quantity of Bridgevale Mining shares I bought in the dark ages which became Bridgecorp which became dust. A good example of not buying to hold however when the brokerage is greater than the sale price it makes things difficult to unload. Then along comes receivership...

[ratkin]

Biggest problem i find with buy and hold is the good companies being sold off. Often way too cheaply.
Im still peeved off that Frucor was allowed to go at a ridiculous price . Would of no doubt still owned some today
if people were not so short sighted as to give the company away. Still see plenty of V cans lying around the place.

[Phaedrus]

Buffett was doing really well out of Coca Cola - but then the uptrend ended. They all do.
KO must surely have been one of his worst performing investments over the last 12 years.
Ah, the joys and rewards of a "Buy and Hold" approach eh!

http://i602.photobucket.com/albums/tt102/PhaedrusPB/KO216.gif

I won't deface the chart with sordid technical indicators - suffice to say that the most primitive TA would have got you and I (well, me at least) out of KO way back in 1998.

[ratkin]

I see you not defacing it with dividend payments either , im sure they grew rather substantial after holding for thirty years, especially if reinvested


http://www.dividend.com/historical/stock.php?symbol=KO

[blackcap]

Im with you on this one Ratkin... charts can be made to show what you want them. If you bought Coca Cola in 1981 at $2 or whatever it was even if holding now you have done well.....

[ratkin]

Coca cola not that unusual either , go back and look at the fortune 500 archives for the 70s and 80s and you will
see many of todays top companies . If you had randomly picked ten from the top 100 and just held them i suspect
you would of done very well indeed, especially if concentrating on the popular brands of the time.
And even the ones that went bad such as Kodak , it would of been very easy to see the effect digital cameras would
have allowing plenty of time for an exit on fundamental grounds.

Heres a list of anyones curious.
http://money.cnn.com/magazines/fortune/fortune500_archive/full/1980/



Of course i wouldnt put abano healthcare in that category !!

[Phaedrus]

I'm sure dividends grew rather substantial after holding for thirty years, especially if reinvested....You would want to reinvest them in some other stock though - one that was going UP!

It is really surprising how small a dividend yield it takes to influence some people. Over the time that KO has been trendless, dividend yield has averaged out at about 2.08% pa. Call me unreasonable, demanding, avaricious, or unrealistic, but I expect my investments to provide an annual return far, far higher than a mere 2%! Why would you settle for such a derisory sum?

[h2so4]

You would want to reinvest them in some other stock though - one that was going UP!

It is really surprising how small a dividend yield it takes to influence some people. Over the time that KO has been trendless, dividend yield has averaged out at about 2.08% pa. Call me unreasonable, demanding, avaricious, or unrealistic, but I expect my investments to provide an annual return far, far higher than a mere 2%! Why would you settle for such a derisory sum?

I agree, but the massive growth achieved from the previous 17 years using buy and hold has been well and truly paid for. So any further growth thru a trendless share price plus a 2% divi would just adds to ones wealth. I'd be happy holding KO 20+ years.:)

[Lego_Man]

Yes, but you would compare your dividend yield to the current value of your investment.

So it would be irrelevant what your investment has done up to now, when you are talking about ongoing yield gain.

I almost tear my hair out when i hear people talk about their "yield to purchase price."

For example you had Coke shares worth 5000, they have now grown to 10,000. Current dividend yield is 2%. You can get 6% in the bank.

Why is it relevant what you paid for the shares initially? We are talking about future returns. All youre doing by holding at that point is giving your gains back to the market (relatively speaking) by compounding at an inferior rate than even the risk free rate.

[percy]

I just love talking to old guys,who tell me they are getting 50% divie yeild on this 65% on that,and 95% yield on the other.Good on them.If they had just put the money at the bank at 3 ,4 or 5%.in fact they have earned the right to talk like that,rather than those who chased high yields and lost the lot.So what their 50% yield is only 2% on todays purchase price.

[h2so4]

Yes, but you would compare your dividend yield to the current value of your investment.

So it would be irrelevant what your investment has done up to now, when you are talking about ongoing yield gain.

I almost tear my hair out when i hear people talk about their "yield to purchase price."

For example you had Coke shares worth 5000, they have now grown to 10,000. Current dividend yield is 2%. You can get 6% in the bank.

Why is it relevant what you paid for the shares initially? We are talking about future returns. All youre doing by holding at that point is giving your gains back to the market (relatively speaking) by compounding at an inferior rate than even the risk free rate.

Back in 1988 Wall Street was tearing its hair out when Buffett purchased more than $1b of KO.

Are you suggesting that Buffett should quit his shareholding and put the money in the bank to earn 6%?

I think there are other reasons why Buffett continues to hold apart from the $250m dividend.

[Lego_Man]

Back in 1988 Wall Street was tearing its hair out when Buffett purchased more than $1b of KO.

Are you suggesting that Buffett should quit his shareholding and put the money in the bank to earn 6%?

I think there are other reasons why Buffett continues to hold apart from the $250m dividend.

That's fine as long the dividend isnt used as continued sole justification for holding. Yield can only be based on current value, anything else is illogical.

If you arent expecting capital growth, and are saying a 2% return in future is OK because you've made money on the stock in the past - that's where i think the error is.

[h2so4]

That's fine as long the dividend isnt used as continued sole justification for holding. Yield can only be based on current value, anything else is illogical.

If you arent expecting capital growth, and are saying a 2% return in future is OK because you've made money on the stock in the past - that's where i think the error is.

I think what I am saying is that in 1988 Buffett paid for 20 years growth and now the 2% dividend is just a bonus. A bit like selling shares to free carry the rest, except he hasn't sold any.

[Lego_Man]

I think what I am saying is that in 1988 Buffett paid for 20 years growth and now the 2% dividend is just a bonus. A bit like selling shares to free carry the rest, except he hasn't sold any.

If that's his justification though, then he is wasting potential return by deploying capital in an asset that is earning sub-optimal returns. What has happened in the past shouldnt matter, you should invest in what will give the highest expected return in the future (adjusted for risk).

When you buy a share at a point in time, the past chart is only looked at as a guide. Who cares if the stock has doubled in the last five years, except insofar as it will adjust your projection of where it will go in the next 5 years?

[ratkin]

The dividend yield is actually 2.8%
Maybe Buffet not as hung up on the shareprice as you guys. Its quite possible the company is increasing in value even though the price is stagnant.
53% of profits are paid in dividends the rest are hopefully usefully emplyed increasing company worth, so buffett
probably more thn happy to hold.
Their main product a bit last century though , was a time everyone drank gallons of the stuff, now it all energy drinks

[h2so4]

The dividend yield is actually 2.8%
Maybe Buffet not as hung up on the shareprice as you guys. Its quite possible the company is increasing in value even though the price is stagnant.
53% of profits are paid in dividends the rest are hopefully usefully emplyed increasing company worth, so buffett
probably more thn happy to hold.
Their main product a bit last century though , was a time everyone drank gallons of the stuff, now it all energy drinks

Very possible:) Shareholder equity grew from $9.3b in 2000 to $24.8b in 2009.

[percy]

Well the additional A$30mil banking facility will speed up the dental growth in Aussie.
"WE ARE WELL POSITIONED to take advantage of this ENORMOUS market and the opportunities it offers for profitable growth."

[percy]

Share price up a bit since late May. Now at $4.70 today, which is nicer than $4.20 back then. DISC: Long on ABA

Of interest - Forsyth Barr have upgraded Abano from "Accumulate" to "Buy".

From their research released today:





Earnings Impact: Increase FY14 EBITDA forecasts by +9.4%.
Valuation Impact: Upgrade from $6.35 to $6.65.
Recommendation: Upgrade from ACCUMULATE to BUY.

Investment View

ABA is a growth company focused on the aggressiveexpansion of its dental networks through acquisitions inAustralia and New Zealand and ongoing investment in itsNew Zealand based Radiology businesses. Bay Internationalis in its formative stages developing audiology networks inAustralia and Asia and offers considerable growth prospectsbearing in mind the very successful development of theNew Zealand audiology business which was subsequentlydivested. As evidenced by the FY12 result we believe coreearnings momentum is gathering pace and we have upgradedour recommendation from ACCUMULATE to BUY.








I have been looking to add to my holding on any weakness.Has not happened, SP just steadily keeps going up.

[percy]

http://www.nbr.co.nz/article/nib-holdings-names-abanos-alan-clarke-chair-tower-medical-unit-bd-137294

I wonder if Alan Clarke's appointment heralds an opportunity for Abano to buy the Tower medical insurance business. Abano are acquirers, Tower are selling off divisions.....

I srry but I am not as long sighted as you.!!!
Never-the-less it put Clarke [ABA] in a great to know what NIB require from a health supplier [aba].
Am I allowed a "well positioned"?.

[percy]

Silly me. NIB only picked Tower Medical up the other month.

Perhaps it might just mean a closer relationship with Abano's radiology and orthotics division (Occam's Razor and all that). Preferential pricing for Tower Medical clients. That sort of thing.

That is more of what I was thinking,also should NIB want some other services I am sure Clarke will tell them "I can help you there".

[percy]

Well I hope the company and SP continues to do well.

In addition to capital gain of about 66% over three years I've had normal dividends, a special dividend and a big share buy back.

This company has done very well for investors. It will continue to do so I'm sure.

Well done Sparky.

[Blendy]

well done! i've put my sell order in this afternoon as well for the same reasons as you.

[percy]

I am too scared to sell.!!!!! lol.
I just love new highs.!!!! lol.

[percy]

A little disappointing that Abano has come back to $6.40 today. If there is a drawback to this company's stock, it is that liquidity is poor and visibility to investors is less now it is no longer in the NZX50.

Stocks outside of the top 50 are where the best pickings now likely lie, but also where the biggest drops could occur in a hefty correction. So I think anyway.

I find myself "well positioned" for the upturn.!!!! lol.

[percy]

I am struggling to work out why Abano has tracked back to $6.12 on the fundamentals. I think its a great company. However, the liquidity is just awful. It looks like only 1 share has been traded today at the price of $6.12. This company deserves better that this.

Management should take some steps to improve liquidity. Perhaps that means a share split.

Not looking very good on the chart,although the share price is still above the 200 day moving average..

[Blendy]

I am struggling to work out why Abano has tracked back to $6.12 on the fundamentals. I think its a great company. However, the liquidity is just awful. It looks like only 1 share has been traded today at the price of $6.12. This company deserves better that this.



Yes I agree, I can't work it out either (plus only 1 share traded looked pretty silly!). I note from my post above that I had put in my sell order recently - they didn't sell, but instead I added to my collection at 6.10 today. Which I think is a bargain.

[percy]

I had ABA on my to add to list last year,but it went for a run before I brought.I could not understand why ?
Thanks for your comments.

[winner69]

Came across an exec from abano the other day and as we both had a few minutes to burn shouted him a coffee ....and did my homework

Haven't really followed aba for a while and some points of the chat were really interesting

Like I didn't realise how much they were into dental and I didn't even realise they owned the lumino brand. Dental now 60% of revenues, they acquire and thus own the practices, all using the same back office processes etc (synergies). Regularly buying practices but the market really fragmented with not many multi practice business existing so plenty of growth opportunies

So aba really a big dentist eh. Others parts of the business chugging along quite well he said

He was quite excited about raving on about the business and how good it going to get ....really enthusiastic

He did take on board that somebody like me didn't know much about them and agreed they should raise their profile ...after all one day they wil probably need more capital

Good chap ...even if I bought the coffee

[percy]

Came across an exec from abano the other day and as we both had a few minutes to burn shouted him a coffee ....and did my homework

Haven't really followed aba for a while and some points of the chat were really interesting

Like I didn't realise how much they were into dental and I didn't even realise they owned the lumino brand. Dental now 60% of revenues, they acquire and thus own the practices, all using the same back office processes etc (synergies). Regularly buying practices but the market really fragmented with not many multi practice business existing so plenty of growth opportunies

So aba really a big dentist eh. Others parts of the business chugging along quite well he said

He was quite excited about raving on about the business and how good it going to get ....really enthusiastic

He did take on board that somebody like me didn't know much about them and agreed they should raise their profile ...after all one day they wil probably need more capital

Good chap ...even if I bought the coffee

Sounds to me it was well worth the expense.!!!
Although they fly under a lot of people's radar their record of communicating with shareholders has won them awards.
Yes mainly dentists.
Should they get the hearing part of the business right in Asia the fun could really start.[again]

[winner69]

One thing is dentist revenue is driven from private money to a large extent which lowers any dependency they have on public money in some other areas. As long as punters want to look after their teeth that's good ....and he did say the lumino tv campaign had bought in many new customers.

Audiology has demographics going for it ...ageing population who have hearing problems etc.

What's put me off in the past is that profits never seem to be what they should be and I am still non the wiser. Very capital intensive and business with relatively high operating costs that don't seem to generate much, or as much as they should

[winner69]

Often first stock screen for me is roic - does the company return its cost of capital. Ultimately the market added value of the company is the future sum of the excess returns.

Aba only achieves 5% or 8% ( depending on how you treat the loss from associates) - way below its cost of capital .... Some would say value destroying company.

Also hard to see where excessive turns ( over the cost of capital) will come from as organic growth seems a struggle and acquired growth is expensive

Lets say roic covers cost of capital ....fair value then is book value ( cause no added value being generated). At the mo aba market cap 111 mill v book value 90 mill. Seems fair enough

[winner69]

I always have had a morbid fascination with the old vision group now vision eye institute in Australia ( vei) and followed their many ups and downs ( mainly downs) over the years

Similar sort of model that never seemed to work out financially as it should ....although after many cap railings vei seems to be doing ok at the moment on the asx

[percy]

I always have had a morbid fascination with the old vision group now vision eye institute in Australia ( vei) and followed their many ups and downs ( mainly downs) over the years

Similar sort of model that never seemed to work out financially as it should ....although after many cap railings vei seems to be doing ok at the moment on the asx

Don't know what model is similar,however if they [or EBO] followed GXL model for vets in Aussie we will be in for a fun ride.
On FA I have always found ABA difficult to come up with any sort of valuation.At the beginning of last year I had them on my add to list,but they took off like a rocket,before I brought any more.
I appreciate Sparky's valuations and trust you will do more work on them Winner69.

[winner69]

Next time bored I'll have a look at my old files and bring them up to date

[bonne vie]

Winner, great feedback. Yes, an excellent company. It's the stock I'm more worried about due to liquidity, though I see it's back up to $6. Nice for those who bought in at $5.60 on recent weakness.
Winner, great feedback. Yes, an excellent company. It's the stock I'm more worried about due to liquidity, though I see it's back up to $6. Nice for those who bought in at $5.60 on recent weakness.

A company I also had on my radar to buy - so thank you Sparky for your comments re "why dropping" on the 2/5/13 which identified this opportunity at $5.56 fo me, wish I had bought more. But was happy in lieu with adding to my initial DIL stock (purchased 03/2013 $5.25) same day as it dipped to $6.85. Agree with sentiment read several times on forum re shares in general - to be cautious at current buying levels. Wish I had had the time I now find I have back in 2008 when I bought a modest portfolio to have found and learned from the forum - patience, identify and don't be afraid to hold cash. Thanks also to Winner for taking the opportunity to do some research.

[winner69]

The thing that puzzles me that even though spending $75m on buying things operating cash flows have remained pretty flat

While revenues have grown impressively from $124m in 2009 to $207m in 2012 (from the acquisitions) Operating cash Flow is still around the $20m (see chart) .... spending heaps to drive the top line but not converting any of the revenues growth into cash just seem to make sense

Can you Abano experts tell me why

[Sauce]

Hi Winner69

I am no Abano expert, but I get revenues of 187.2m for 2009. It was 124m in the year before that (2008).

I think that discrepancy would go some way to explaining things? But regardless of that their ebitda margins appear to have halved from 16% in 2009, to 8% in 2011.

Cheers

Sauce

[winner69]

Hi Winner69

I am no Abano expert, but I get revenues of 187.2m for 2009. It was 124m in the year before that (2008).

I think that discrepancy would go some way to explaining things? But regardless of that their ebitda margins appear to have halved from 16% in 2009, to 8% in 2011.

Cheers

Sauce

I should have said so but I was using the revenues in the cash flow statement ....interesting they are different from the p&l revenues eh .....might have a look at that

Yes margins don't look too flash compared to the past

[percy]

Hi Winner69

I am no Abano expert, but I get revenues of 187.2m for 2009. It was 124m in the year before that (2008).

I think that discrepancy would go some way to explaining things? But regardless of that their ebitda margins appear to have halved from 16% in 2009, to 8% in 2011.

Cheers

Sauce

Sale of Bay Audio may account for it.The hearing aid business worked on huge margins and made huge profits.
Dental,and other parts do not have same sort of profits.Good earners,but modest profits.
Should they get the hearing aid business "model" working in Asia we will see the huge profits again,but is proving to be taking longer and is not so easy.Taiwan is starting to work,but don't think Hong Kong is, and not sure about Singapore.But well worth going for.I think they are getting a lot of support from hearing aid manufacturer Seimens.

[winner69]

Sale of Bay Audio may account for it.The hearing aid business worked on huge margins and made huge profits.
Dental,and other parts do not have same sort of profits.Good earners,but modest profits.
Should they get the hearing aid business "model" working in Asia we will see the huge profits again,but is proving to be taking longer and is not so easy.Taiwan is starting to work,but don't think Hong Kong is, and not sure about Singapore.But well worth going for.I think they are getting a lot of support from hearing aid manufacturer Seimens.

Interesting

There is an interview on Radio Live with CEO .... near the end he his asked what are the priorities and Asia is only 3rd or 4th

http://www.radiolive.co.nz/Abano-Healthcare-looking-at-expanding-its-Dentist-brand-in-New-Zealand/tabid/506/articleID/35142/Default.aspx

[Sauce]

Hi Winner

Statement of Cashflows from 2009 has reciepts from customers of $184m.

Where are you taking your cashflow information from? Only place I can find a figure of 124m from is 2008 revenues (and cashflow that year was 114m)

Cheers

Sauce

[winner69]

Hi Winner

Statement of Cashflows from 2009 has reciepts from customers of $184m.

Where are you taking your cashflow information from? Only place I can find a figure of 124m from is 2008 revenues (and cashflow that year was 114m)

Cheers

Sauce

But when you go to the 2010 Cash Flow Statement it says $124,448m for 2009. There is a line under investing cashflows that has a large number for discontinued operations. I read this as them restating the 2009 taking out discontinued businesses

So the numbers I have used from ABA Cash Flow Statements for 2012 and 2010 prob continuing businesses

[percy]

Interesting

There is an interview on Radio Live with CEO .... near the end he his asked what are the priorities and Asia is only 3rd or 4th

http://www.radiolive.co.nz/Abano-Healthcare-looking-at-expanding-its-Dentist-brand-in-New-Zealand/tabid/506/articleID/35142/Default.aspx
Thank you for the link.I found it most interesting.

[winner69]

Thank you for the link.I found it most interesting.

See doing homework can be fun eh

[Blendy]

90c spread between buyers and sellers!

[zigzag]

ABA to report their full year tomorrow. Mkt guidance was NPAT 2.3 - 4.8 and their measure of underlying NPAT was 4.1 - 4.6. This is all well signalled, so accompanying commentary will be the most interesting.

[Blendy]

I thought the report was pretty good - strange to see there's no buyers lining up.

[zigzag]

I thought the report was pretty good - strange to see there's no buyers lining up.

Could be that people are waiting for more detail around the SPP.

[percy]

I am pleased with the result.The capital raising at $15mil [market cap at present $99mil] is not a lot.By the time Forbar do a placement, there will not be a lot for the Share Purchase Plan for shareholders.I look forward to seeing the details,as I am keen to add to both my wife's and my own small holdings.
The audio is taking time.Yet the dentist business is very good.

[zigzag]

I am pleased with the result.The capital raising at $15mil [market cap at present $99mil] is not a lot.By the time Forbar do a placement, there will not be a lot for the Share Purchase Plan for shareholders.I look forward to seeing the details,as I am keen to add to both my wife's and my own small holdings.
The audio is taking time.Yet the dentist business is very good.

Your right. The capital raising is not a lot. Makes you wonder what the purpose is. A total guess - A boutique fund manager or two wants to get in, but as the stock is so illiquid, they cannot acquire enough shares. The SPP is just in fairness to the current shareholders.

[percy]

In Australia recently there was a take over of a huge dental group.From memory [sorry I can't remember where I read it] it was at a lot higher valuations than ABA have been paying.So ABA have been buying well.
Liquidity is poor,however the company is very well managed in the growing health sector.I have done very well with our holdings,and I expect ABA will reward us well over the next 5 to 10 years,so SP fluctuations are not a big concern.

[Blendy]

This all sounds very interesting. Presumably since they've offered a price higher than market value, which was rejected, and are now moving into takeover mode, they see this stock as well undervalued and good future potential. I await with interest to see how this unfolds.

DISC: ABA makes up a reasonable chunk of my portfolio

[Blendy]

haha, thanks! I am a little overweight in ABA so this could be the perfect opportunity to cash up some if the price gets really good... I see the buyers are lining up already! $6.11

[Blendy]

wow, buy bids are up to $6.49...

[zigzag]

It is my reading of the situation that ABA has been paying out more in dividends, than its actual profit, for the last year or two. They said that this was to keep faith with the shareholders while the company was refocussed after the sale of NZ Bay Audio business. But I think it has also served as a takeover defence i.e. it has kept the share price up, and also kept debt on the balance sheet, which made it less attractive to a potential acquirer. However as revenues have rebuilt the DPS and EPS gap has closed. So it should actually start growing ( share price wise ) again over the next 2-3 years. Now could be a good time to make a bid. ABA is my third largest holding, after HBY and DIL.

[Blendy]

I would be very happy with $6.75. Do you think it's actually likely to go much above that today?

[Blendy]

yeah, it was a rhetorical question really ;) I hardly expect anyone to know the future!

[percy]

Nice to find ourselves again "well positioned!"

[zigzag]

I wonder how they will price the SPP now. 3 million shares at $5.00 would do it for me. Would the possibility of a takeover bid alter the equation? What date/timeframe will they base the price on?

[winner69]

So Mr Hutson had another go over how weekend and got told to take a running jump.

See ABA finally answered the question Shoeshine NBR has been asking and no getting a response 'did you know about Hutson approach before July 30 when you first talked about a cap raising?.

I think the answer was a vague no

Archer / Hutson keen ......prob smarter and meaner than the ABA board ....and might go to 8 bucks eh

Current price a bit over the top on normal basis ....takeover another story

[percy]

ABA share price has been a bit over the top for along time.
Not sure whether we will be more, or is it further over the top?
Whatever, we are well positioned.!

Hutson getting the audio business for a modest amount.!! Yeah Right!!

[Blendy]

I would have thought this news might have had a bit of an increase in sp today?

Interesting that the indicative price range was $6.97-$7.14, and that this was reduced since the last offer - I don't recall that we were given the pricing information before?

[percy]

First time I have seen price mentioned, Blendy.

[bonne vie]

Hi What are peoples thoughts on the Takeover notices of today. I haven't had a chance to digest them and have pressing arrangement to get to but appreciate thoughts.

DISC Small Holding

[percy]

Hi What are peoples thoughts on the Takeover notices of today. I haven't had a chance to digest them and have pressing arrangement to get to but appreciate thoughts.

DISC Small Holding

Just people disclosing their interests.Nothing major that I can see.
I do not think we will see anything happen until the SPP is out of the way.
I am applying for as many as I can afford for both the wife and myself.

[Snow Leopard]

Hi What are peoples thoughts on the Takeover notices of today. I haven't had a chance to digest them and have pressing arrangement to get to but appreciate thoughts.

DISC Small Holding

Remove Hutson from the board, use force if necessary.

Best Wishes
Paper Tiger

[percy]

Remove Hutson from the board, use force if necessary.

Best Wishes
Paper Tiger

Can't really do otherwise that I can see.

[zigzag]

Remove Hutson from the board, use force if necessary.

Best Wishes
Paper Tiger

Looks like you got your wish. But he still is the main force in the audiology business. All starting to look a bit messy.

[percy]

Well cleaned out our "rainy day fund" to take up as much as we could afford of the SPP.
And what happens? Heavy rain here after I posted our cheques.!!
Thought I had gone from "well positioned" to "poised",but ends up I have gone to "very wet."

[macduffy]

Brian Gaynor supports the Abano board in their opposition to Archer's "opportunistic bid." Makes a good case, IMO.

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11127843

[percy]

Brian Gaynor supports the Abano board in their opposition to Archer's "opportunistic bid." Makes a good case, IMO.

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11127843

Thanks for posting the link.
A very good article.
Would appear Brian Gaynor is very close to the company.
Looks as though I did the right thing by using our "rainy day" funds on the SPP.!

[macduffy]

Looks as though I did the right thing by using our "rainy day" funds on the SPP.!

Yes, I would think so. I don't hold Abano but have done well in the past from contested bids such as this is shaping up to be.

[zigzag]

What will happen to Bay International if the bid does not succeed? This is half-owned by Peter Hutson, and he would be the main driver of this business. He has effectively jumped ship. Would there be a way that they could still work together? According to Mr Gaynors column in the Herald, Abano has already put 30mill. into Bay International, and now it seems that Hutson wants to acquire Abano's share for a "nominal sum". At some stage I would love to see an independent report. I do intend to participate in the SPP, but will leave it until the end of the month. With the likes of Milford, Fishers and ACC involved there should be some interesting times ahead!

[winner69]

If the price Bupa paid for Dental Corp in Oz is the current benchmark for such businesses than ABA dental worth 12 bucks and then adding on the other bits maybe 14 bucks is a fair price?

Then again Bupa may have been the greater fool and overpaid for Dental Corp...who knows

I have never been that keen on this type of business model of buying up practices and hoping to make zillions at the end of the day. Always seem to need an endless flow of capital and the profits never seem to come through as expected. Vision Eye Institute is a great example of how disappointing it can become.

However where's there smoke there's fire. Archer seem keen, that's good. ABA board don't appear to want to roll over and die, that's good. So maybe a good fight on the cards, that's good.

So an opportunity to have a bit of fun. Archer might have to go to 10 bucks plus to get what they want, especially if they see real value from an under performing business eh. I am happy to sell out 10 bucks plus or hopefully 12 bucks. Sorry Brian but I don't want to be a long term holder, just speculating so don't call me weak please Mr Gaynor.

Interesting times ...pity it's so hard to add a decent chunk to current holding

[percy]

If the price Bupa paid for Dental Corp in Oz is the current benchmark for such businesses than ABA dental worth 12 bucks and then adding on the other bits maybe 14 bucks is a fair price?

Then again Bupa may have been the greater fool and overpaid for Dental Corp...who knows

I have never been that keen on this type of business model of buying up practices and hoping to make zillions at the end of the day. Always seem to need an endless flow of capital and the profits never seem to come through as expected. Vision Eye Institute is a great example of how disappointing it can become.

However where's there smoke there's fire. Archer seem keen, that's good. ABA board don't appear to want to roll over and die, that's good. So maybe a good fight on the cards, that's good.

So an opportunity to have a bit of fun. Archer might have to go to 10 bucks plus to get what they want, especially if they see real value from an under performing business eh. I am happy to sell out 10 bucks plus. Sorry Brian but I don't want to be a long term holder, just speculating so don't call me weak please Mr Gaynor.

Interesting times ...pity it's so hard to add a decent chunk to current holding

Our friends GXL certainly are proving the model is very profitable with Aussie Vets.
Bupa are seeing the model as very profitable too.
We are "well positioned."I prefer your values more than mine.I was thinking $8.50 to $9.50.JeeWhiz,I love being wrong!!!
Zigzag.Hutson still work to make Bay Audio work.He will end up with 50% [as per now] or 100% should the takeover proceed.

[winner69]

So ABA disclosure not the best ......the Forbar banking people don't talk to the Forbar traders ....and a couple of guys shares get sold without them knowing ,,,,,and then everybody find out about the Archer deals ....and the poor dudes miss out on a buck a share.

Good story ....but that's how the game works eh ....those two shareholder just weren't part of the game


http://www.stuff.co.nz/dominion-post/business/9217287/Abano-bid-leads-to-query

[zigzag]

Actually there is supposed to be a separation or "Chinese wall" between the investment banking side of the Forbar and the trading side. It would seem these guys just got caught out by bad timing.

[percy]

[QUOTE=winner69;428871]If the price Bupa paid for Dental Corp in Oz is the current benchmark for such businesses than ABA dental worth 12 bucks and then adding on the other bits maybe 14 bucks is a fair price?

This morning's Tim Hunter article in The sunday Star Times headed "Playing hard to get" confirms your thoughts/figures.
As a long term shareholder I will be in no hurry to accept any less.

[winner69]

Actually there is supposed to be a separation or "Chinese wall" between the investment banking side of the Forbar and the trading side. It would seem these guys just got caught out by bad timing.

We know that and they work eh ....these walls

Seems like a misunderstanding ...the guys didn't know they were selling there shares
http://www.stuff.co.nz/dominion-post/business/9217287/Abano-bid-leads-to-query

[percy]

Well the SPP got all our wallets out.Required $9.25mil received $23.8mil applications. 250% oversubscribed.
So looks as though we get approx. 39% of what we applied for. I am happy with that.
[65.5 shares per $1,000 applied for]

[zigzag]

Well the SPP got all our wallets out.Required $9.25mil received $23.8mil applications. 250% oversubscribed.
So looks as though we get approx. 39% of what we applied for. I am happy with that.
[65.5 shares per $1,000 applied for]

Percy. I think it is scaled in proportion to the number of shares each person owns.

[percy]

Bugger!!!! but thanks.!!!!

[noodles]

Does anybody have any guess how many shares you need to own to get the full $15K?

[winner69]

Tim Hunter had another story in today's paper

Think he was saying if Hutson gets his way the Takeovers Code may come into play ....no shareholder meant to get any more than the others ..... Hutson remains a shareholder of abandon (probably) and gets some parts of business for free (almost)

Seems like Hutson initiated all this ....begs the question how serious are Archer? Or just hoping to get something cheap? If that is case I don't fancy their chances

Whatever seems like ABA will keep coming back to shareholders for cash for some time ....I don't like that idea much

[percy]

I read the article and took a different meaning from it.
Abano have very profitable growing businesses that can support the Asian developing hearing business.Abano will only come back to shareholders for more money to expand profitable dentist business and perhaps pathology.
Yet Hutson, appears to have the problem supporting his 50% contribution to the Asian hearing business.I am sorry he has a problem.Kind of Archer to come to his aid,but that aid does not help me as an Abano shareholder!
In the meantime Abano's dental business continues to expand and generate greater profits.
I still believe the Asian hearing [audio] business will be a fantastic business.
Ageing population,the fact that at present few deaf Asians wear a properly fitted [ear mould] means the potential is HUGE.
Abano are correct to invest in this audio business.

[zigzag]

Percy - If as you say Hutson is having problems financing his half of Bay Audio, then why would he want the whole lot, and twice the ongoing costs? Sometimes these kind of businesses are best developed privately, away from the glare of the market and shareholders expecting quick returns. Abano has sunk a lot of shareholder funds into this business, and break even is still a way off. I also wonder just how deep are Archers pockets, as I think they will have to improve their offer before they start getting any traction.

[zigzag]

Bugger!!!! but thanks.!!!!

The SPP was massively oversubscribed, but of Abano's roughly 2300 shareholders, around 2000 have less than 5000 shares. So, depending on how big your holding is, you could still get more than you think. All will be revealed on Tuesday I believe. I sent in $10,000 and wouldn't mind getting a decent swag of it, but don't really want to top up at current prices on market.

[percy]

The SPP was massively oversubscribed, but of Abano's roughly 2300 shareholders, around 2000 have less than 5000 shares. So, depending on how big your holding is, you could still get more than you think. All will be revealed on Tuesday I believe. I sent in $10,000 and wouldn't mind getting a decent swag of it, but don't really want to top up at current prices on market.

I feel the same.
Wife and I both applied for $5,000 each.

[percy]

Percy - If as you say Hutson is having problems financing his half of Bay Audio, then why would he want the whole lot, and twice the ongoing costs? Sometimes these kind of businesses are best developed privately, away from the glare of the market and shareholders expecting quick returns. Abano has sunk a lot of shareholder funds into this business, and break even is still a way off. I also wonder just how deep are Archers pockets, as I think they will have to improve their offer before they start getting any traction.

"For the time being Bay requires ongoing funding from its shareholders whose support takes the form of loans.""Abano's accounts show its lending totalled $20m at balance date."
Maybe Hutson thinks Archer will write-off these loans?
"Abano said Bay was progressing towards break even at operating earnings level in 2016"
So Hutson would not need to support Bay for too long.He would then have 100% of a substantial fantastic business,with huge growth prospects.!!!

[percy]

So the fun starts,.
Abano have asked Hutson to name the price he would buy/sell Bay.
Abano then have the right to either buy/sell it from/to Hutson.
Bring it on.!!!!!

[percy]

Well the SPP got all our wallets out.Required $9.25mil received $23.8mil applications. 250% oversubscribed.
So looks as though we get approx. 39% of what we applied for. I am happy with that.
[65.5 shares per $1,000 applied for]

Have just checked my holding.Received 285 shares.Applied for $5000 worth.So about 33.9%.

[noodles]

Have just checked my holding.Received 285 shares.Applied for $5000 worth.So about 33.9%.

I applied for $15000, got 409 shares. Disappointing

[percy]

I applied for $15000, got 409 shares. Disappointing

Yes ,you did not receive many.
My wife received the same amount as me,so in our case it paid to have separate holdings.
$10,000 combined = 285 x 2 = 570.

[zigzag]

I got my full quota. i.e. I sent in $10000.00 and got 1681 shares. I must be better looking than you lot. I was actually not expecting to get this many, as I had already spent my refund. (in my mind that is)

[noodles]

I got my full quota. i.e. I sent in $10000.00 and got 1681 shares. I must be better looking than you lot. I was actually not expecting to get this many, as I had already spent my refund. (in my mind that is)

In theory, you would have been holding more shares on the record date.

[BWH]

I also sent in $10,000 and got 1681 shares. How do they decide who gets scaled and who doesn't?

[zigzag]

I also sent in $10,000 and got 1681 shares. How do they decide who gets scaled and who doesn't?

Clause 8 on page 9 of the SPP document explains the scaling method. Did I understand it? Not really, and decided not to waste my time trying to.

[Snow Leopard]

Good to see the board continuing with the rhetoric (http://stocknessmonster.com/news-item?S=ABA&E=NZSE&N=242477).


Best Wishes
Paper Tiger

[winner69]

All quiet on the battlefield it seems ....even the snipers seem to have gone to ground

Wish they would pull finger and sort things out fast ....does archer really want it? / what I'd hustler or whatever his name up to?

Patience winner ... The event is still playing out ....your rewards wil come soon.

That's what I keep telling myself ...but please please some action please

[percy]

First time [that I can remember] that I have received a Freepost return envelope for my proxy/voting form.
Looks as though they are expecting a lively agm.!!

[noodles]

All quiet on the battlefield it seems ....even the snipers seem to have gone to ground

Wish they would pull finger and sort things out fast ....does archer really want it? / what I'd hustler or whatever his name up to?

Patience winner ... The event is still playing out ....your rewards wil come soon.

That's what I keep telling myself ...but please please some action please
Someone has put a massive(500000) sell order on the market at $8.50. Is this a signal to the sniper's of what they would have to pay? Seems a little pointless putting the order on the market otherwise.

[percy]

Would love to see them snapped up.
That would focus the market's attention.!!

[winner69]

so an independent valuation report presented to the agm to take away the focus from a earnings downgrade

and now the paper says archer no longer interested
http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11164274

and now a problem how to unwind a position without stuffing the market up ... event ridden reason for buying gone so out the door they go

[percy]

Thanks for the heads up.
I am no longer an ABA shareholder.

[Blendy]

I'm not entirely sure I understand the reason for the current battering? (to be fair, I haven't followed this thread for a couple of months)

Am I correct in a very basic summarisation that someone wanted a full takeover, but ABA said no, got a valuation that seems pretty amazing, and now the takeover guy has pulled out? Is the drop in price due to an expected rise in price should the takeover go ahead, but now that it's off the table? Shouldn't the independent valuation still stand as a price guide?

[G on]

I think
archer sold out all their shares.

[zigzag]

I'm not entirely sure I understand the reason for the current battering? (to be fair, I haven't followed this thread for a couple of months)

Am I correct in a very basic summarisation that someone wanted a full takeover, but ABA said no, got a valuation that seems pretty amazing, and now the takeover guy has pulled out? Is the drop in price due to an expected rise in price should the takeover go ahead, but now that it's off the table? Shouldn't the independent valuation still stand as a price guide?

I believe that the independent report was for 100% control, with ability to take out certain costs. I think the price has dropped too far, but maybe some people were only there for takeover speculation, and now want out.

[zigzag]

I think
archer sold out all their shares.

So who has been buying them? No notices yet.

[percy]

So who has been buying them? No notices yet.

I don't see that they have either been brought or sold.It is just the unwinding of the "Exclusivity Deed" that was between Archer,Steamboat,Healthcare Ltd,etc.

[winner69]

I think
archer sold out all their shares.

None of those big shareholders have 'sold out'. Archer didn't actually own any to start with - only had commitments from Hutson and his associates.



Those notices today were just notification of the unwinding of all commitments and promises.

[winner69]

I believe that the independent report was for 100% control, with ability to take out certain costs. I think the price has dropped too far, but maybe some people were only there for takeover speculation, and now want out.

I would say those selling today were those in for a takeover. Not likely to happen in near future so probably getting out.

Price back to somewhere where it was before the excitement of a takeover.

Remember it dipped at the last profit downgrade .....and now another downgrade ....... ABA to remain unloved for a whole methinks

[zigzag]

I don't see that they have either been brought or sold.It is just the unwinding of the "Exclusivity Deed" that was between Archer,Steamboat,Healthcare Ltd,etc.

Aha! Thanks for the clarification Percy and Winner. All bets are off and back to square one.

[winner69]

March 25 share price was 670

Earnings guidance out on March 26 (normal npat 4.1m to 4.6m)

Bit disappointing and share price drifts down to 575 to full year announcement July 30 (npat 4.5m)

Aug 7 - hey an indicative offer and price goes to 655

A war of words between the parties and maybe a decent takeover in the offer sees price up 720 this week

Takeover off for the moment ......and a profit downgrade
And normal npat likely to be down on last year ....oops .....all those pretty slides and grant Samuel going on about growth in the forecasts and here we have ABA going backwards

So today a few bailed and price now 620 .... Looks like the loyals are hanging on the 710.

Now the excitement all over and things back to 'normal' / .'underlying' as ABA says I reckon sharp ice less than 6 bucks by Xmas. Heck punters thought it was only worth 575 in July and its making less money now

[percy]

Ratios.
NPAT $3.39mil. EPS 16.1 cents the PE is 37.33.
NPAT $4.5mil. EPS 22.5cents the PE is 27.55.
The dividend yield is a modest 3.39%.
So should NPAT come in at $4.1mil EPS would be 20cents.A PE of 20 would give a SP of $4.00.

[winner69]

Ratios.
NPAT $3.39mil. EPS 16.1 cents the PE is 37.33.
NPAT $4.5mil. EPS 22.5cents the PE is 27.55.
The dividend yield is a modest 3.39%.
So should NPAT come in at $4.1mil EPS would be 20cents.A PE of 20 would give a SP of $4.00.

Can't be right Percy ha ha

Grant Samuel says $10 bucks plus

[percy]

Certainly can't be right if Grant Samuel say $10.!!!! lol.

[percy]

Certainly can't be right if Grant Samuel say $10.!!!!

[winner69]

Certainly can't be right if Grant Samuel say $10.!!!!

Finished down at 638 ...... more to go next week

Wonder where it will finish up this time around ... I reckon first stop is about 575

[percy]

Not a pretty sight.
Thanks for posting your excellent graph/chart.

[winner69]

Thanks for the heads up.
I am no longer an ABA shareholder.

Was ABA part of your recent sell down ..... if so well done, you have done well

[percy]

Was ABA part of your recent sell down ..... if so well done, you have done well

No.I sold ABA yesterday afternoon at $7.20 after reading your post.

[Xerof]

No.I sold ABA yesterday afternoon at $7.20 after reading your post.

A remarkably smart move there percy. If I understand this right, the announcement of withdrawing the offer was first reported in the paper about 3.30pm, but no formal statement made to NZX until ~5.20pm. I reckon you were the only one to see the opportunity to sell.

where is NZX discipline, FFS?

percy, you should shout winner a drink!!

[percy]

The first I heard about Archer withdrawing their bid was Winner69's post at 4.22pm yesterday.I read the article,and rang Craigs straight away.There was a buyer at $7.20 for more shares than I had.I told Craigs I wanted my shares sold before 5pm.I received the contract notes at 4.42pm.As you pointed out no formal statement was made until 5.20pm.
I certainly owe Winner69 a drink or two [or more] !!!!!!

[winner69]

I gather that Steamboat et al went public through the media and didn't bother tell Abana

Abano did say in their announcement they have been made aware through the media and said that the statement did contain inaccuracies. Obviously not the best of friends

[Xerof]

I've just heard through the media that NZX have decided to reverse all trades in ABA made after 3.30pm on Thursday, due to unfair advantage to sellers. A tipster named as Winner 69 is being sought by the authorities. An APB has been issued to look out for a guy carrying a graph book with noughts and crosses all over it

[percy]

I can't bring myself to give a serious reply as I am laughing too hard.!!!
Was the media Campbell live?

[winner69]

Another price / value issue - general argument is that the market is often wrong.

Yesterday ABA has a PRICE of 638 but in the eyes of Grant Samuel (which the company is very pleased with) ABA has a VALUE of 830 to 1005

Who's buying this "undervalued" ABA then?

[percy]

Another price / value issue - general argument is that the market is often wrong.

Yesterday ABA has a PRICE of 638 but in the eyes of Grant Samuel (which the company is very pleased with) ABA has a VALUE of 830 to 1005

Who's buying this "undervalued" ABA then?

Grant Samuel ???

[winner69]

Grant Samuel ???


Maybe a poster on Sharetrader under a non de plume?

But he oaid big big bucks for writing long reports

[macduffy]

Well, it's been a nice little hobby of "his" for the last 25 years!

:laugh:

[winner69]

Abano shareholders ask: Where have all the profits gone?

Good story in the NBR

[winner69]

http://www.stuff.co.nz/business/industries/9504993/Abano-accused-of-overspending

[Fred114]

Close reading of recent context of Abano
http://www.stuff.co.nz/business/opinion-analysis/9945784/Hutson-embarks-on-stage-one-of-his-comeback-plan

[zigzag]

Abano shareholders ask: Where have all the profits gone?

Good story in the NBR

Abano shareholder asks - Where has my long weekend gone? What a stupid day to request an important meeting - the Friday before Queens Birthday weekend, the last long weekend before winter sets in. Maybe this is part of their plan. The less people who attend, the less to potentially vote against them.

[Joshuatree]

Abano Stands By Special Meeting Date (https://www.nzx.com/companies/ABA/announcements/251087) Getting uglier and uglier ;s/p down 40c in re 5 days.

[percy]

Pleased I sold out on 28-11-2013 at $7.20 thanks to Winner69's post that the takeover would not go ahead.
Since then I have not had reason to buy back in.
Ugly and messy!!!

[Joshuatree]

Resounding no vote today.Only re 0.78 of a % was voted in favour of Hutson and reeves resolution to remove chairman Janes. They are painted as greedy self interested parties; anyone disagree?

[percy]

Resounding no vote today.Only re 0.78 of a % was voted in favour of Hutson and reeves resolution to remove chairman Janes. They are painted as greedy self interested parties; anyone disagree?

No agree.
I think NZ Sharehoders Assn have done a lot of very good work.Not just for ABA shareholders,but showing the strength of their voice, means a better market place for us private investors.

[noodles]

An article on one of ABA competitors, 1300 Smiles. I imagine much of the content applies to ABA.

http://www.thebull.com.au/premium/a/47250-dentistry-star-filling-the-value-gap.html

[BlackPeter]

2014 financials are out and looking good - at the top end of predictions. 75% NPAT growth (admittedly based on a quite meagre 2013); total 2014 dividend - 21 cts; Expecting further growth for 2015.

https://www.nzx.com/companies/ABA/announcements/253188

Pleased I used the recent share price dip to buy some more, but annoyed that I could have bought still more and didn't, wouldn't expect after these results the $6.00 to return anytime soon again - ah well, you can't win them all ...

[BlackPeter]

ACC buying in :

https://www.nzx.com/companies/ABA/announcements/255400

Time to review my holding?;)

[zigzag]

ACC buying in :

https://www.nzx.com/companies/ABA/announcements/255400

Time to review my holding?;)
Don't you mean ACC selling down?

[BlackPeter]

Don't you mean ACC selling down?
Oops - you are right ... despite ACC now (18 Sep 2014) holding more shares than at last disclosure (13 May 2011), did the percentage of the shares they are holding drop . I've overseen the capital raising between these 2 disclosure dates (which they didn't had to disclose because it didn't change their percentage). Ah well, if ACC is selling, than there is no reason to be concerned ...


Date this disclosure made: 18 September 2014
Date last disclosure made: 13 May 2011

Substantial security holder(s) giving disclosure
Name(s): Accident Compensation Corporation (“ACC”)
Nicholas Bagnall, Paul Robertshawe, Blair Tallott, Blair Cooper, Jason Familton
Contact details: Matthew Cunliffe +64 4 816 5743 investmentscompliance@acc.co.nz

Summary of substantial holding to which disclosure relates
Class of listed voting securities: Ordinary Shares
Summary for: Accident Compensation Corporation (“ACC”)
Nicholas Bagnall, Paul Robertshawe, Blair Tallott, Blair Cooper, Jason Familton

For this disclosure,—
(a) Total number held in class: 1,150,636
(b) Total in class: 20,752,126
(c) Total percentage held in class: 5.545%

For last disclosure,—
(a) Total number held in class: 1,026,503
(b) Total in class: 15,671,992
(c) Total percentage held in class: 6.550%

Details of transactions and events giving rise to relevant event
Details of the transactions or other events requiring disclosure under the instructions to this form:
Sale of 9,251 shares for net consideration of NZD $65,616.42 on the 16th of September 2014.


I really wish they would move to a more readable format for these announcements. A simple table showing all relevant transactions would be so much easier to understand!

[zigzag]

Actually BlackPeter, it looks as though we were both guilty of skimming over the announcement, and missing the full picture. Tried to go back and look at other SSH notices, but the useless NZX only keeps these notices up for 6 months. Way to encourage smaller shareholders to the NZX. "NOT"

[BlackPeter]

anybody who could report from the annual meeting?

[percy]

I note from Craig's latest research ABA are getting very good growth from hearing in Australia.
I am left wondering for how long? as I note COSTCO have now decided hearing is a growth category.
Maybe ABA's margins will come under pressure and hearing aids will become a lot cheaper!

[BlackPeter]

Abano advises that it is pulling out of the negotiations for the Wellington region pathology services:

https://www.nzx.com/companies/ABA/announcements/260210

“Our decision to withdraw was not taken lightly. We believe that the current process would result in an
outcome that was clinically unsound and financially unsustainable, and with all risk being transferred to
the provider.”

Ouch - not sure, about the competitors, but if it is cheaper for Abano to write off $11 Million than accepting the proposed conditions from the DHP, than I am wondering who else might want to take this poisoned chalice? Another DHB screw up?

[noodles]

Abano advises that it is pulling out of the negotiations for the Wellington region pathology services:

https://www.nzx.com/companies/ABA/announcements/260210

“Our decision to withdraw was not taken lightly. We believe that the current process would result in an
outcome that was clinically unsound and financially unsustainable, and with all risk being transferred to
the provider.”

Ouch - not sure, about the competitors, but if it is cheaper for Abano to write off $11 Million than accepting the proposed conditions from the DHP, than I am wondering who else might want to take this poisoned chalice? Another DHB screw up?
Could be a bluff?

[winner69]

Could be a bluff?


Didn't they try this trick before?

[BlackPeter]

quite weak demand - and director buying (well - $20k worth of shares) ... maybe for others as well an opportunity to top up?

https://www.nzx.com/files/attachments/208292.pdf

Discl: holding (some)

[BlackPeter]

Needed recently the services of an audiologist and went first to Bay Audiology (though noticing that Bay Audiology NZ is not anymore part of ABA, Bay Australia and Asia still is). Service - o.k. Quoted prices for hearing aids - outrageous (as with many other established audiologists). Rather quiet as far as customers are concerned.

Looking at their quote - these guys must make megabucks if they sell their stuff (which they didn't in my case ... I got a couple of latest technology and very comparable hearing aids from a different NZ dispenser for less than 40% of the price Bay Audiology quoted for their products). So I guess - maybe their pseudo monopolistic behaviour trying to extort a bad informed and captive customer base does not work anymore in the internet area?

Again - I realise that ABA sold out of Bay Audiology NZ, but attitudes might not change that fast. So I am wondering, whether this company maybe missed the changing times ... could be one of the reasons for Aba's continuous SP slide?

[Rep]

Needed recently the services of an audiologist and went first to Bay Audiology (though noticing that Bay Audiology NZ is not anymore part of ABA, Bay Australia and Asia still is). Service - o.k. Quoted prices for hearing aids - outrageous (as with many other established audiologists). Rather quiet as far as customers are concerned.

Looking at their quote - these guys must make megabucks if they sell their stuff (which they didn't in my case ... I got a couple of latest technology and very comparable hearing aids from a different NZ dispenser for less than 40% of the price Bay Audiology quoted for their products). So I guess - maybe their pseudo monopolistic behaviour trying to extort a bad informed and captive customer base does not work anymore in the internet area?

Again - I realise that ABA sold out of Bay Audiology NZ, but attitudes might not change that fast. So I am wondering, whether this company maybe missed the changing times ... could be one of the reasons for Aba's continuous SP slide?


"Attitudes might not change that fast" ??! Really ?!!
Abano sold Bay Audiology (NZ)in 2009 to NHC- back then Auckland wasn't a Supercity, David Bain was in court for a retrial and was subsequently acquitted and Helen Clark headed off to the UN. I think Paul Holmes was still on TV and Christchurch was still a low risk zone for seismic activity.

As far as I know, Bay in NZ has changed ownership again since.

[BlackPeter]

"Attitudes might not change that fast" ??! Really ?!!
Abano sold Bay Audiology (NZ)in 2009 to NHC- back then Auckland wasn't a Supercity, David Bain was in court for a retrial and was subsequently acquitted and Helen Clark headed off to the UN. I think Paul Holmes was still on TV and Christchurch was still a low risk zone for seismic activity.

As far as I know, Bay in NZ has changed ownership again since.

True - 6 years can be a long time, even if I am not sure whether your examples are particular helpful in conveying this message. Not sure whether I would call Auckland a supercity these days (but super problems), Bain is still fighting to get some compensation for spending many years as an innocent man in jail, Helen Clark is still with the UN and NZ has still an arrogant government not interested in what its people really want (even if its colours changed). Just responding - maybe we should continue the discussion about above topics on the relevant threads.

Question: Do you have any evidence that things changed after the split for either Bay Audiology NZ (to the worse) or for Bay Audiology Australia / Asia (for the better)? They still look like siblings to me, both still using the same logo and their webpages looking still quite similar as well.

[Rep]

Amplifon SPa owns Bay in NZ. Have a web search on Bay and Amplifon - and that might point to some changes.

The references to 2009 were to reflect that a lot has happened in 6 years.

[BlackPeter]

Gosh, another well visited thread ...

Anyway - half year numbers are out - and actually don't look too bad: https://www.nzx.com/companies/ABA/announcements/275453

Despite divesting less stellar performers they managed to keep revenue and EPS basically on the level it was prior to the divestment of the pathology branch thanks to good growth (mainly) in the dental business. Revenue at the upper level of guidance - and outperforming analysts expectations.

Positive outlook and a story which makes sense (well, IMHO). I put my toes back into the water and bough a small parcel.

[percy]

Trust it was a very small parcel as Craig's latest research has downgraded ABA from a buy to hold,citing poor growth from dentistry and audiology, and concerns about ABA's stretched balance sheet.

[BlackPeter]

Trust it was a very small parcel as Craig's latest research has downgraded ABA from a buy to hold,citing poor growth from dentistry and audiology, and concerns about ABA's stretched balance sheet.

it was small ... and yes, their leverage is sort of at the upper end of where it still might feel comfortable. Went up over the the last 12 months from 58.7% to 61.8%. Mind you - its both close to 60% (which I still would consider as ok-ish). Chorus has from memory about 80% leverage.

Haven't seen the Craigs report, but poor growth from dentistry? From the segment information: Dental revenue grew in the last 12 months by 16%, dental EBITDA by 12%. Admittedly not stellar, but not too bad either.

Audiology is another subject. While it had as well 11% revenue growth (but from a much lower basis) - I agree, there is still a lot of improvement potential (lots of fat, waste and inefficiency) in the audiology industry in this country (and presumably Australia). Certainly an opportunity for Abano, but not sure, whether they seize the opportunity or just continue as another inefficient "me too", trying to rip off old people by offering them ridiculously overpriced hearing aids and losing this way many customers to cheaper (and better) service providers.

Anyway - I agree it is sort of a mixed shop. Still lots of potential - time will tell, whether the new CEO is seizing the opportunities or just treading water.

[trader_jackson]

Worth another look?

[BlackPeter]

Bugger - my order of 7.75 was just about to be filled - and here comes another hostile takeover offer! Could have waited - couldn't they? No sense for decency anymore in these times ;);

Just wondering whether the takeover offer ($10 per share for 31% - to bring Healthcare Partners up to 50,01%) works out this times. Its made by the usual suspects: Peter Hutson, Anya Hutson and James Reeves. ABA is notorious for fighting off hostile takeovers from this group. Interesting times ahead - though possibly just more wasted board time.

[macduffy]

I don't know about "notorious", more like "heroic" for obtaining better prices for shareholders?

Everytime I go to "Lumino the Dentists" I come away thinking I'll buy some of these - but never have!

:(

[BlackPeter]

I don't know about "notorious", more like "heroic" for obtaining better prices for shareholders?

:(

Fair enough, put it on my limited English language skills. I probably thought about the group proposing the take over when I used this word.

[777]

Has anyone had a call from Healthcare Partners. Seems they are not doing so well at acquiring shares if they need to ring around the shareholders. I told the guy to take a running jump.

[BWH]

They rang looking for me, but I'm overseas. Must be working through the list.

[macduffy]

And now a warning from Abano, in case anyone thinks the calls emanate from that company!

http://stockmarket.hobsonwealth.co.nz/news-item?S=ABA&E=NZSE&N=295755

[BlackPeter]

If you are not sure how to react to the partial takeover proposal - here is the view from the NZSA team:

http://www.nzshareholders.co.nz/pdf/correspondence/Abarno.pdf

If you want to support their good work - join them here: https://www.nzshareholders.co.nz/members.cfm

[Frostyb0y]

Hopefully most of us know how to react, but thank you for posting BlackPeter.

[777]

Partial takeover all off.

Abano Healthcare Group Limited (NZX:ABA) advises that the hostile partial
takeover attempt by dissident shareholder Healthcare Partners Holdings
Limited and its directors, Peter and Anya Hutson and James Reeves, has failed
after closing with minimal acceptances and materially short of its 50.01%
condition.

On expiry of its partial takeover offer at 5pm on 3 March 2017, Healthcare
Partners had publicly disclosed acceptances in respect of 2.35% of shares in
Abano on issue, sufficient to take its holding to 21.37%, well short of its
condition of 50.01%.

[BlackPeter]

Partial takeover all off.

Abano Healthcare Group Limited (NZX:ABA) advises that the hostile partial
takeover attempt by dissident shareholder Healthcare Partners Holdings
Limited and its directors, Peter and Anya Hutson and James Reeves, has failed
after closing with minimal acceptances and materially short of its 50.01%
condition.

On expiry of its partial takeover offer at 5pm on 3 March 2017, Healthcare
Partners had publicly disclosed acceptances in respect of 2.35% of shares in
Abano on issue, sufficient to take its holding to 21.37%, well short of its
condition of 50.01%.

Good news. Hope Healthcare Partners get now a hefty bill from ABO for wasting valuable board resources. They are repeat offenders after all.

[hardt]

What a beautiful update this morning.

[percy]

A stunner.
Makes me wish I never sold them.

[hardt]

A stunner.
Makes me wish I never sold them.

I bought back in october after a check up at lumino... $70 and took all of 10 minutes, a full waiting room too!

[percy]

I bought back in october after a check up at lumino... $70 and took all of 10 minutes, a full waiting room too!

One of the reasons I sold.!!!...lol.

[hardt]

Back for my half year check, 10 minute check, $75, waiting room full of the same sort of customers.

Dentistry is something worth investing in if you haven't already, one very solid industry moving forward.

[percy]

Back for my half year check, 10 minute check, $75, waiting room full of the same sort of customers.

Dentistry is something worth investing in if you haven't already, one very solid industry moving forward.

I don't know about that.
I think your experiences are a bit different from mine.
I also think when times are a bit tough a lot of people put off going to the dentist.
Last week I spoke to a woman whose son had just finished dentistry "school" with $120,000 student loan.She was concerned as she felt the future did not look that bright for her son.She said her son thought that would change if the government supported dentists as they do doctors,along the lines of the British health system.
From memory ABA Aussie dentists were not enjoying growth per practice/dentist.

[peat]

shareprice going gang-busters though Percy! gotta love a good momentum story.

[percy]

shareprice going gang-busters though Percy! gotta love a good momentum story.

Yes ABA share price is in a very strong up trend.
What do you do? Follow the share price, or your own experiences?
I tend to back my own experiences.Must admit I am often wrong.!.lol.
I note from my post#129 I sold out on 29-11-2013,Seem to remember it was over $8.Since then the funds have been put to good use elsewhere...

[hardt]

Yes ABA share price is in a very strong up trend.
What do you do? Follow the share price, or your own experiences?
I tend to back my own experiences.Must admit I am often wrong.!.lol.
I note from my post#129 I sold out on 29-11-2013,Seem to remember it was over $8.Since then the funds have been put to good use elsewhere...

It was in the 6's back then, with dividends you would have 50-70+% return in under 4 years.

[percy]

It was in the 6's back then, with dividends you would have 50-70+% return in under 4 years.

I am currently in Greymouth.
I will check my 2013 diary when I get home,to see what price I did sell at.
I expect the funds did better than +70%..lol...

[IAK]

I don't know about that.
I think your experiences are a bit different from mine.
I also think when times are a bit tough a lot of people put off going to the dentist.
Last week I spoke to a woman whose son had just finished dentistry "school" with $120,000 student loan.She was concerned as she felt the future did not look that bright for her son.She said her son thought that would change if the government supported dentists as they do doctors,along the lines of the British health system.
From memory ABA Aussie dentists were not enjoying growth per practice/dentist.

Anecdotal I know, but a quite a few friends and family have recently headed to Thailand for expensive dental work.

[percy]

It was in the 6's back then, with dividends you would have 50-70+% return in under 4 years.

I was wrong.
Sold at $7.20 28/11/2013.

[peat]

Yes ABA share price is in a very strong up trend.
What do you do? Follow the share price, or your own experiences?
I tend to back my own experiences.Must admit I am often wrong.!.lol.
I note from my post#129 I sold out on 29-11-2013,Seem to remember it was over $8.Since then the funds have been put to good use elsewhere...

I dont really back my own experiences as I see them as anecdotal evidence with no statistical validity. I dislike other peoples anecdotal comments on these forums for the same reason. Anecdotal evidence can build into a perspective but it is largely random imo.

But strong price action is convincing as it clearly demonstrates conviction by many players ! Equally I wont buy at any price of course and will look for pullbacks.
I'm currently reviewing another company in this sector..... will post soonish.

[percy]

I was once told if you are visiting a new town,look to see where the workers go for their lunch,and follow them.It really works.
If you had brought an Ernest Adams Peanut brownie that tasted so horrible, you took the packet back to their factory,and was told they had a fauly batch of peanuts, and did not know where they ended up, and so decided to sell their shares because of it, you would have had great timing.
If a couple of years ago you have asked your Auckland friends whether they shopped at Nosh,you would have found out they shopped at Faro Fresh,and so you would have sold your VIL at well over a $1.20.
If you took Postie Plus vouchers as your Westpac Visa rewards and had trouble redeeming them,having to have them replaced three times,you would have done well selling your Postie Plus shares at over 90 cents.
If you owned WHS shares and had the misfortune to have visited one of their stores you would have sold their shares.
Every time I go to Westfield Riccarton I always check out Lovisca [lov asx] store.Always busy.Had my grandaughterv and her friend do a store visit for me.No need we always shop there.
Greymouth Top 10.Sunday ,Monday,Tuesday nights.At least 10 camper Vans.Mostly THL's Mauri and Britz,a couple of Apollo and one Juicy.I own THL.
When The Chairman and CFO of Ryman tell you they put their mother/Nana into a Ryman Village it gives you a sense of well being.
When you see a Fresh Choice check out operator shopping at Pak " Save you know you are shopping at the right store.
I always back my own experiences.

[macduffy]

Quite right, percy. I think about buying Abano shares every time I visit the dentist. I never have bought any.
:(
But I had the sense to sell my Pumpkin Patch shares before I grew out of their clothes!
:t_up:

[percy]

Quite right, percy. I think about buying Abano shares every time I visit the dentist. I never have bought any.
:(
But I had the sense to sell my Pumpkin Patch shares before I grew out of their clothes!
:t_up:

Absolute classic.
Made my day...lol.

[hardt]

Extremely happy with this one... taking them up on that rights offer as well.

[percy]

Extremely happy with this one... taking them up on that rights offer as well.

Looking at ABA's chart I see why you are extremely happy.
Well done.

[winner69]

Ignoring anecdotal evidence is expensive ......

[percy]

Ignoring anecdotal evidence is expensive ......

Would appear to have been very profitable for ABA shareholders.

[hardt]

Currently Abano has around 2-3% market share of Trans-Tasman dentistry - The industry is valued at $11BN per year and growing...

As the second largest in the industry ( 85% brand recognition too ) they are aiming for a 10% market share in the long term.

There is incredible room for growth through acquisition as the dentistry industry is open to but untapped by corporatisation

Obviously it is now down to execution of the growth plan, we will have to wait and see how they expand their brand ( because it is a brand )

Their board consists of very successful individuals that are highly motivated to grow shareholder value.

Assuming plans for continual investments into expansion move along well - potential for Abano in the below model... *end result may vary*



ABANO HEALTHCARE LIMITED

FY15

FY16

FY17

FY18E

FY19E

FY20E



































Operating Revenues Generated

222.203

213.744

233.532

255.718

282.568

308.282
9.70%


Patient consumables and cost of products sold

-37.020

-32.290

-34.711

-37.132

-40.808

-44.484



Employee benefits

-118.148

-117.535

-127.574

-137.613

-151.237

-164.860



Occupancy costs

-16.302

-16.377

-18.012

-20.184

-21.760

-23.720



Acquisition and transaction costs

-1.154

-0.649

-0.718

-1.500

-1.649

-1.797



Other operating expenses

-20.863

-21.752

-22.788

-24.890

-26.183

-28.541



Other operating income

0.845

1.452

1.652

1.852

2.035

2.219



Operating Expenses Incurred

-192.642

-187.151

-202.151

-219.467

-239.601

-261.184
8.92%


















Underlying EBITDA Generated

29.561

26.593

31.381

36.251

42.967

47.097
14.49%


Operating Margin

13.30%

12.44%

13.44%

14.18%

15.21%

15.28%
4.37%


Depreciation and Amortisation

-10.104

-9.735

-10.226

-10.901

-11.609

-12.306



Finance Expenses

-5.796

-6.066

-5.248

-5.668

-6.036

-6.429



Tax Expenses

-4.568

-3.346

-4.954

-5.511

-7.090

-7.942



Underlying NPAT

9.093

7.446

11.600

14.171

18.231

20.421
20.75%


Underlying EPS

0.431

0.350

0.540

0.550

0.700

0.776
12.80%


Shares on Issue - Millions

21.10

21.27

21.47

25.76

26.04

26.33



Dividend pay out to NPAT ratio

58.01%

85.70%

66.62%

68.00%

68.00%

68.00%



After tax dividend per share

0.25

0.30

0.36

0.37

0.48

0.53





Would also state the chart looks great, Forbarr have a good pick on their hands with this one IMO

9235

[tobo]

LOL, I thought Abano wasn't much of a brand name, I just realised Lumino is the brandname in NZ!

[winner69]

Looks pretty solid half year report

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/ABA/314337/274610.pdf

[percy]

Looks pretty solid half year report

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/ABA/314337/274610.pdf

I thought it was poor.
Only growth is through more practices.
Looks as though little or no growth per practice.

[hardt]

I thought it was poor.
Only growth is through more practices.
Looks as though little or no growth per practice.

Growth through acquisitions has always been the strategy.

They confirmed guidance was hit back in December so this report was as expected.

Sitting on enough cash for a huge amount of acquisitions in the future as well so looking pretty good.

[percy]

Growth through acquisitions has always been the strategy.

They confirmed guidance was hit back in December so this report was as expected.

Sitting on enough cash for a huge amount of acquisitions in the future as well so looking pretty good.

Why buy more if existing practices are not growing.?

[Ggcc]

Why buy more if existing practices are not growing.?
Sometimes existing practices are not taking any more people.

[hardt]

Why buy more if existing practices are not growing.?

NZ growth of 1.7% same store with Australia facing a decline of 1.6%

That decline in same store sales is not a whole lot compared to last years -5% ( approx )
Dentistry spend is actually going up, but the number of practices are growing and they have to maintain a large piece of the pie.
Either way it seems to work.

[BlackPeter]

Why buy more if existing practices are not growing.?

Gaining a stronger position in the market and growing economies of scale?

Remember - they went through pretty "interesting times" due to some quite disruptive cornerstone shareholders. I hope the board has this coming year more time to focus on growth than on defending the company from predators ...

I think their business model has merit.

Discl: small holding.

[percy]

NZ growth of 1.7% same store with Australia facing a decline of 1.6%

That decline in same store sales is not a whole lot compared to last years -5% ( approx )
Dentistry spend is actually going up, but the number of practices are growing and they have to maintain a large piece of the pie.
Either way it seems to work.

I do n't think so.
Two years of decline is far from working.
All the time rents,wages and other overheads are not declining.
Take care.

[winner69]

wonder what payback period they buy new practices for?

[hardt]

I do n't think so.
Two years of decline is far from working.
All the time rents,wages and other overheads are not declining.
Take care.

The point made was, despite declining same store sales... the group is tracking well as acquisitions more than make up for it.

[percy]

The point made was, despite declining same store sales... the group is tracking well as acquisitions more than make up for it.

Does not work for me.

[winner69]

Growth through acquisitions has always been the strategy.

They confirmed guidance was hit back in December so this report was as expected.

Sitting on enough cash for a huge amount of acquisitions in the future as well so looking pretty good.

Your last sentence

Spent $19m on acquisitions and $9m on PPE in first half

Only $9m in the bank at November (even though they raised $33m in the half)

Maybe not enough cash for ‘huge’ amount of acquisitions in the future.

[macduffy]

Gaining a stronger position in the market and growing economies of scale?

Remember - they went through pretty "interesting times" due to some quite disruptive cornerstone shareholders. I hope the board has this coming year more time to focus on growth than on defending the company from predators ...

I think their business model has merit.

Discl: small holding.

Where would you see the growth in economies of scale coming from BP? Biggest costs must be salaries/wages and rentals on the 100+ premises. Equipment and dental supplies offer some scope?

[winner69]

Centralised electronic booking system (prob an app)

[winner69]

Reported EPS down 8%

Share price up from a year ago ...market rerating continues ...sentiment is good

[hardt]

Reported EPS down 8%

Share price up from a year ago ...market rerating continues ...sentiment is good

They acquired 10 new practices this half... 50/50 between NZ and AUS with underlying earnings moving on up.

Influx of cash from the August cap raise ( 20% dilution ) was barely touched in the 1H so we are expecting plenty more acquisitions this half.
With the focus being on Maven in AUS... the benefit of the cap raising has not yet come to life.

[winner69]

They acquired 10 new practices this half... 50/50 between NZ and AUS with underlying earnings moving on up.

Influx of cash from the August cap raise ( 20% dilution ) was barely touched in the 1H so we are expecting plenty more acquisitions this half.
With the focus being on Maven in AUS... the benefit of the cap raising has not yet come to life.

I think they’ve spent most of Cap raise money

Started year off with $7m cash and operations generated $12m which gives $19m. Acquisitions/ capex etc used up $29m (sub total -$10m).
They raised $34m and reduced debt by $11m this and paid out $4m in divies (total these $19m)
After all this $9m left in the bank’s at November

As said before expecting $17m from the sale of that thing they didn’t want which would give them about $26m ...,plus a bit generated this half .....not much more than they spent on acquiriribg practices and capex in first half

(From Company Interim;Accounts)

[BlackPeter]

Where would you see the growth in economies of scale coming from BP? Biggest costs must be salaries/wages and rentals on the 100+ premises. Equipment and dental supplies offer some scope?

equipment and dental supply - for sure
centralized IT system,
centralized training,
less (per head) admin cost with centralized HR
higher staff flexibility (they can hire their own locums)
centralized marketing
...

[macduffy]

equipment and dental supply - for sure
centralized IT system,
centralized training,
less (per head) admin cost with centralized HR
higher staff flexibility (they can hire their own locums)
centralized marketing
...

Agreed, BP, although I would think that most of these benefits are already being realised, to some degree. A matter of how much more there is to be gained.

[Filthy]

9539

buy side is looking a bit skinny now..... reckon it might drop a bit further?

[James108]

Australian side is under assault from other corporate consolidators as well as one listed company opening new practices in malls.

I would be very interested in this if they could turn aus sss around. Brands are currently being consolidated so this could happen.

[hardt]

That lovely trend we were seeing snapped and has been slowly moving downhill since the cr last year... results out tomorrow.

Come to think of it, I haven't been in to a Lumino this season so it might be bad...

Disc: Holding

[winner69]

That lovely trend we were seeing snapped and has been slowly moving downhill since the cr last year... results out tomorrow.

Come to think of it, I haven't been in to a Lumino this season so it might be bad...

Disc: Holding

Result looks pretty awesome

[percy]

Result looks pretty awesome

Take off the one off $2.1mil profit from the Ascot Radiology sale, the profit does not look flash to me.

[James108]

Take off the one off $2.1mil profit from the Ascot Radiology sale, the profit does not look flash to me.

Agree, sss in aus deteriorating from first half. No turn around yet there, still watching and waiting.

[BlackPeter]

Result looks pretty awesome

I agree - the wording is awesome (made me look into the results). Not that sure about the numbers, though. They helped me with the decision that I better keep my powder dry for real opportunities.

EPS was somewhat higher than analysts predicted (but just due to one-offs) and revenue even a tad below consensus. Multi year growth is not really worthwhile mentioning (Revenue CAGR bumping between 3 and 5%) and EPS CAGR too bumpy to pick a representative value due to wildly jumping annual results.

51 cents EPS for a close to $9 share is not the most exciting EPS either (forward PE 16.3) and I don't see really anything which would speed up (EPS) growth in the years to come. Given that their business model is to buy and integrate dental practices - the low hanging fruit are always picked first. Unlikely that future acquisitions will offer better EPS than previous acquisitions.

Add to that the huge chunk of goodwill they carry on their books. I guess - sure the auditors accepted it after some tests, but just imagine managements income assumptions change a tad ... never happened before?

[winner69]

HHG reckon ABA pretty good ....and cheap at the moment

https://www.hhg.co.nz/news/abano-healthcare-approved-hhg-investment-committee-peripheral-stock/

[percy]

HHG reckon ABA pretty good ....and cheap at the moment

https://www.hhg.co.nz/news/abano-healthcare-approved-hhg-investment-committee-peripheral-stock/

Always happy to disagree.
I rate ABA as an avoid.

[macduffy]

Always happy to disagree.
I rate ABA as an avoid.

Could you expand on that, percy?

I'm in two minds regarding ABA.

[percy]

A lot of capital required for acquisitions,which have a very poor return on capital..
Very little growth from each practice.
Revenue growth is mainly driven by acquisitions.
I do not think dentist have "pricing power".
A visiit to the dentist is easily put off when times are tough.
Australian mortgage requirements,ie a stop to interest only loans will cause hardships.
Increasing mortgage interest rates will work against ABA's clients too.

[Joshuatree]

Always happy to disagree.
I rate ABA as an avoid.

Too true ive avoided the dentist for a while, thanks for the reminder:eek2:

[macduffy]

Thanks, percy. Narrowed down to one mind now and will avoid ABA meanwhile!

:)

[jg8512]

the very last comment in the ABA presentation for the FY18 results is:

"More information on underlying earnings, which is a non GAAP financial measure and is not prepared in accordance withNZIFRS, is available at www.abano.co.nz/underlyingearnings"

But when you go to that web address you get:
Page Not Found
Sorry, the page you have requested does not exist or has been deleted"

I wonder what happened to their underlying earnings

[Rep]

the very last comment in the ABA presentation for the FY18 results is:

"More information on underlying earnings, which is a non GAAP financial measure and is not prepared in accordance withNZIFRS, is available at www.abano.co.nz/underlyingearnings"

But when you go to that web address you get:
Page Not Found
Sorry, the page you have requested does not exist or has been deleted"

I wonder what happened to their underlying earnings

Try this link:
https://www.abano.co.nz/investor-information/non-gaap-financial-information/

[tim23]

A lot of capital required for acquisitions,which have a very poor return on capital..
Very little growth from each practice.
Revenue growth is mainly driven by acquisitions.
I do not think dentist have "pricing power".
A visiit to the dentist is easily put off when times are tough.
Australian mortgage requirements,ie a stop to interest only loans will cause hardships.
Increasing mortgage interest rates will work against ABA's clients too.
I went recently to an ABA outlet 1st time in some years price charge floored me! Good point about tough times tend to agree with that - no idea how peopke can afford it.

[percy]

I went recently to an ABA outlet 1st time in some years price charge floored me! Good point about tough times tend to agree with that - no idea how peopke can afford it.

I think we have all know some dentists charge the moon.
Word gets round very quickly which ones to avoid..

[oyvei]

Does anybody has an idea why share price is going down the hill despite record profits, more clinics bought in AUS and NZ? is it a good buy at $8.20 or share bound down hill?

[BlackPeter]

Does anybody has an idea why share price is going down the hill despite record profits, more clinics bought in AUS and NZ? is it a good buy at $8.20 or share bound down hill?

Hard to say ... some around here are no particular Abano fans.

On the other hand - no announcement pointing to something terrible and the only trigger for this downturn I can seen seems to have been the dividend payment. These things do happen. Some punters discovers the huge drop due to going ex dividend, panic, run for the hills and hit this way some other punters stop losses.

Lacking any other detrimental company specific information would I say the chance that Abano is close to an (at least) local minimum is higher than the chance this drop continues unabated - i.e. no matter whether we see it as sell or not - now might not be the best time to do so.

Actually - Just saw it went this afternoon up a couple of cents - maybe we are already there?

More difficult is the question, whether this is going to be just another ripple in the downtrend or a change to Abano moving back to its previous glory ;);

I guess the PE used to be a bit high closer at the $10 mark, but now at $8.20: forward PE is 14.1 and forward CAGR 14.9 - PEG below 1!

Obviously - we should not get too excited, ABA had a pretty patchy (though not too bad - historic long term PE is 10.7) earnings history in the past, but some analysts seem to see a continuation of the recent EPS growth. If they are right, than it well might be a reasonable investment at this price.

Analyst consensus (4-traders) is $10.15 and recommendation between hold and outperform. Here we go.

[JayRiggs]

I've bought into ABA last week shortly after it went ex-div. Got my timing a wee bit off.
They look to be pretty consistent with their growth, always meeting their own guidance. Expecting a decent +10% a year going forward.

The other 2 big dental stocks Pacific Smiles and 1300 Smiles have kinda been struggling the past few years and Abano hungry to take market share off em.

[JayRiggs]

And I really like how they've ditched their other businesses like radiology and audiology to focus just on dental.
Shows conviction of their strategy.