A five financial summary and the financial statements for the year ended 31 May 2016 can be viewed here.
REVENUE: In FY16 we earned revenue from businesses in three sectors – dental, audiology and diagnostics. We sold our audiology business in FY16 and therefore only accounted for 11 months of earnings from this business. In FY15, we also had earnings from our pathology and orthotics businesses which were sold during that year.
GROSS REVENUE: As our audiology business was a joint venture, it was equity accounted. This means that only our 50% share of profit is included in the financial statements, not the revenue or EBITDA from this business. To enable shareholders to see how much revenue each business is delivering, we also report gross revenue which includes audiology. Gross revenue also includes dental revenues before the payment of dentists’ commissions, which is the industry normal.
The year on year revenue increase was driven primarily from the dental businesses, as well as an improving performance from the Australian audiology joint venture.
EBITDA is Earnings Before Interest, Tax, Depreciation and Amortisation. It is essentially the ongoing income we receive from our businesses. EBITDA excludes the results for Bay International.
UNDERLYING EBITDA excludes a number of items we are required to expense under the International Financial Reporting Standards as well as off one-off gains, losses and transaction costs on the sale of businesses.
NET PROFIT AFTER TAX (NPAT): In FY16, we sold our audiology business for $32 million, resulting in a gain on sale of $20.2 million. Including this, Abano reported a Net Profit After Tax of $28.4 million.
UNDERLYING NPAT removes the impact of non-cash accounting adjustments, such as the gain on sale and transaction costs and was $8.8 million in FY16.
The Abano Board believes that underlying earnings provides a more appropriate representation of Abano’s performance and we have been reporting these metrics on a consistent basis over a number of years. Underlying earnings are the measure used within the Company to evaluate performance, establish strategic goals and to allocate resources, and is also the basis for the Company’s dividend policy.
More information on gross revenue and underlying earnings, which are non-GAAP financial measures and are not prepared in accordance with NZ IFRS, is available here.