Abano Healthcare says it needs to acquire a new dental practice about once every 10 days in order to ensure continued growth in corporate dentistry.
The healthcare provider, which operates Lumino the Dentists in New Zealand and Dental Partners in Australia, gets 63% of its revenue from its dental operations.
In July, it reported a $1.6 million profit, up 30% from the previous year.
At its annual general meeting in Auckland today, it announced it is expecting profit for the first half of the year to be between $1.3 million and $1.8 million, up from $0.6m million for the same period last year.
“In 2012 we acquired 26 dental practices, and since May we have acquired another 14 practices, bringing our total to 131,” managing director Alan Clarke told shareholders.
However, that figure is constantly changing, with three more acquisitions today brings that number to 134.
He says Abano is the second-largest “corporate dental consolidator” in Australasia and there is significant room for growth in corporate dentistry.
“The trans-Tasman dental market is worth about $7 billion a year, and there are about 7500 dental businesses.
“There are 14,000 dentists in Australia and 3000 in New Zealand.
“All corporate dental consolidators still only hold 10% of this market. There is a significant opportunity, with growth at this pace possible for many more years.”
The problem with that rate of growth, however, is attracting the number of dentists to operate the practices, as some will move on following an acquisition.
“The thing we struggle with in New Zealand is attracting and retaining good clinical people. We actually compete with Australia for that talent.”
Mr Clarke says there is a focused effort to attract immigrants to Australia and New Zealand.
“We work in the UK looking to attract good people. We are seeing a lot of dentists coming out of Europe because of a weakening economy there.”
Asked by a shareholder whether a share split would help improve liquidity, Mr Clarke said the company was too young for that sort of move.
“I would rather we are known for delivering revenue and profit, and not trying to do tricky things with the register to stimulate growth.”
As well as growth in its dental operations, Abano expects a boost from its new radiology centre opening at the Millennium Institute on Auckland’s North Shore next month.
Radiology comprises 17% of the group’s revenue.
Abano is also merging its two radiology business, Ascot and Insight, into one entity.