Yovich & Co. Weekly Update - 26 November 2012

Nov 26, 2012 | Commentary

This Weeks Themes

  • Global markets rebounded with investors buoyed by sentiment that the fiscal cliff in the U.S. has been over played and that Greece will receive another tranche of aid.
  • On the local market, strong results from several companies including a rally of over 5% in Fletcher Building helped the market higher after its AGM last week.
  • The U.S. markets turned around recent losses with negotiations progressing positively on finding a solution for funding the fiscal deficit. Black Friday sales buoyed retail and technology stocks and data showed that new house building has picked up.
  • European markets posted their best weekly gain of the year with strong data out of Germany and the prospect of more funding for Greece giving investors confidence.

Investment News

Abano Healthcare (ABA.nz) – Annual Meeting:

Abano is a provider of various health related services including Dentistry, Audiology, Radiology, Pathology, Orthotic and Rehabilitation throughout New Zealand, Australia and South East Asia. They presented their annual meeting last week and highlighted a strong yearly result and several exciting projects.

Abano announced guidance for the first half of the year with revenue increasing to around $106.4 million and underlying earnings also up to around $2.4 million. They highlighted their growth program for expanding the number of dental clinics they own in both New Zealand and Australia with the current number standing at 131. Over the past year they have acquired 26 practices providing an additional $42 million in revenue for their “Lumino the Dentist” and “Dental Partners” brands. To fund further growth they have secured $30 million in debt funding from the CBA in Australia. Another area of revenue growth is expected to come from their investment in Radiology that they have been concentrating on over the past 18 months.

The dividend for the past 4 years has been 21 cents per share and carried full imputation credits. On the current share price this equates to a gross yield of around 4.9%.

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Jarrod Goodall

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