ONT - 1300 Smiles

[molar]

I guess if you dare to make those statements publicly instead of posting it on a forum, you will be sued like hell for libel. Why you did not make your comments using your original ID? Afraid of something?

The numbers will not lie but watch them closely beacause by the time you notice it so will many others!
Ask the questions I have suggested!
I know very little about shares and investing but a lot about running a sucessful dental practice.
If 1300 are doing what I am suspicious of there will be three stages for each individual practice.
Stage 1. Practice is bought and Dentists are contracted to work and acheive growth targets. This is rewarded with payout provisions in their contract. So they are effectively encouraged to manage their own practice. The profitability of which comes back to them in the capital payments due under the contract.
Stage 2. Principal Dentist leaves because he has taken the best of the contract payouts and wants to own his own business again. Maybe equipment is becoming run down and not replaced. Maybe he sold as part of a retirement plan. Because contract has restriction of practice clauses the Dentist cannot imediately start again in same area. So replacement dentists are bought in and may still be profitable to an extent because principal dentist cannot compete. They practice on "location goodwill" seeing many patients at least once.
Stage 3 Principal Dentist non-compete clause expires or word gets around professional community of a business oppurtunity due to corporate practices in general not being well thought of by profession and opposing practice opens nearby- Profitablity crashes.

In relation to greenfield sites wouldn't you like to know how these individually are going?
The bargain purchase recorded in the annual report? Has it delivered any net earnings to the company? When will it?
Will next years 1300 profit growth equal the EBIT of the Bray Park acquistion?

As far as tangible assets what are they Dental equipment and materials? what else?
Just ask the ? Is this all smoke and mirrors?
At least with ABC childcare the administrators had a lot of property they could sell up!

 

[frankbaozhu]

Molar, here are my answers to your questions. I know it is a bit long, but I think there are not many chances in one's life time to make a great investment at reasonable price, so I decide to spend my time to write those down. Enjoy!

1. How much cash and shares are 1300smiles paying for these practices that they buy?

Molar, you can pretty much conclude how many acquisitions ONT has made over the years and the amount they spent on them. The conclusion is that over the last 7 years, there was not a single share issued for acquisitions, and a total of 281273 share will be issued if the earnings target is met.

Over the last 7 years, ONT spent 12152801 on all the acquisitions. Assuming all those shares will be issued, that is a little over 1.1 million, which is less than 10 percent of the total payment.

Acquisition in 2003

Gentle Dental Group - Lisa Matriste
Consideration 14765, no shares issued

Dr Brian Creedy’s
Consideration 50000-100000 no shares issued


Acquisition in 2005-2006

Bardon
Consideration: 263215 no shares issued

Chevron Island
Consideration: 222243 no shares issued

Mackay
Consideration: 32173 no shares issued and subsequently moved into a new facility

Acquisition in 2006-2007

Carindale
Consideration: 1702929 7 beds no shares issued

Other 2 practices
Consideration 329458 estimate 2-3 beds no shares issued
Goodwill: 845963

Acquisition in 2007-2008

Caloundra 1401032
Rockhampton 401042
Toowoomba 2650268
Bundaberg 5035676

Total consideration is 9488018, and goodwill is 7645018, 281273 shares were issued

On this point, it is not possible to get a hold on specific numbers.

Acquisition in 2008-2009

There was no acquisition.

Acquisition in 2009-2010

Springwood 143000
Tingalpa 250 resulted in a negative good will of 535K!


2. Are these contracts conditional on the dentist working for 3-5 years in the practice? ie the purchase price paid for the practice has capitilsed part of the expense for that dentists wages for the next 3-5 years.

I will try to contact the management for the details. Your concern is totally possible. You were implying that ONT was overpaying dentists intentionally so that they can report better earnings, since goodwill will not be amortized. For one thing, this kind of accounting treatment is a violation of law. You were suggesting ONT was systematically trying to inflate earnings, right? Let me ask again, show me the numbers and facts to support your claim. See? I have mine here.

On the other hand, look at the data in 2009 annual report, note 11. If your claim about capitalizing salaries is true, then the goodwill should be a lot higher in a lot of practices. It is common sense that dentists are good earners. 3 -5 years salaries for a single dentist would mean around 1 million dollars. Hey, there is only 3 practices with goodwill over 1 million. Look at the numbers:

Caloundra: 5 doctors 1049000 in goodwill
Toowoomba 7 doctors 2147000 in goodwill
Bundaberg 7 doctors 4693000 in goodwill

So the doctors hang around 3-5 years because of those upfront payments?



3. Why won't management release the figures for individual practices? Is it true that the individual practice profitability Is falling once the original dentists leave, despite introducing increased chair numbers? Is the growth in total business earnings made up by buying more high end practices whatever the cost so that their earnings can be reported as profit! and the overall company report great revenue growth?

Once again, you are making unfounded statements here. Why it is true the profitability of individual practice is falling once the original dentists left? Do you have any numbers here?

Let us do the simple math here. since 2003, ONT spent around 13.3 million in acquisition. In 2003, ONT reported NPAT of 680K. Last year ONT reported NPAT of 4.3 million. So for the 13.3 million ONT invested over the years, and mostly in 2007, the return this year is an astounding 3.6 million. Molar, do we miss something here? Can you explain the increase in NPAT?

Molar, you are also saying that ONT has used acquisitions to boost its revenue and earnings specifically. I am not an expert. But could you please point me to the financial irregularities here? Or is this your imagination?

4. Graham Middleton is an accountant at a company called Synstrat he has extensive experience in valuing dental practices and writes in the ADA federal newsletter. If you want investment advice on this company or any other dental company track him down!

I have no interest to give your friend my businesses.

5. If as the MD says in his report 1300 is so great at running dental practices are they attracting Australian trained graduates of any nationality or are they taking applicants who would work anywhere for an Autralian VISA.

Molar, are you a racist and against immigrants? I know this is a serious accusation, but it seems to me you have major problems with the nationality. In your posts, you implied again and again you discriminated those docs with nationality other than Australians. And based on your writing skills, I suppose you are not a native speaker or were poorly educated. What is your problem then?

For the first time I think you are just a retard.


6. Are 1300 smiles patients happy? Can the company provide any survey data to support this taken from one of the practices after the selling dentist has left and 1300 management has moved in?

............ I really do not get your point. Why do not you run a survey and tell us the results?

7. What percentage of dentists now working for 1300smiles have been there for longer than 12 mths?

I need to contact management to get the answer.

The number one question is " Is the business being run to be a long term profitable business or is the number one goal to report revenue growth and thus increase the SP."

My data and facts, in my opinion, answered your question.


Molar, I am tired of this unfair battle. You issued your guesses, speculations and imagination trying to blast a company that makes its shareholder happy and contributes to the society. On the other hand, I am trying hard to give our readers facts, numbers and careful analysis. Could you please counter all my arguments with your numbers and facts?

I am looking forward to hearing your reply.

Fan

 

[frankbaozhu]

This thread has a heap of good info from both sides. Lets please stick to the facts and (reasoned) opinions without being confrontational or baiting each other.




Further posts like this will be removed and infracted as they add nothing to a thread. I do not see how someone expressing their opinion can be sued, otherwise every AGM would result in court cases. Anyway, a company with more than 5 (i think) staff cannot sue an individual for defamation.

Keep the thread on track please guys

Moderator, did you read the previous posts? Did you see his comments toward foreign doctors and immigrants?How many facts were there in this guy's posts? I am sure I cannot prevent someone from expressing their opinions, but sometimes you saw something really awful and you got mad.

I will contain myself then. Molar, please give me your facts and numbers instead of your hypothesis. Or get them tested before you post anything.

 

[Billyb]

Molar, are you a racist and against immigrants? I know this is a serious accusation, but it seems to me you have major problems with the nationality.

Read his post again without your personal bias. He is not being racist at all. He is saying that a good dental practice will attract Australian graduates. When dental practices are unable to attract Australian graduates, they will have no choice but to take immigrant dentists. He is questioning why these practices haven't been able to attract Australian grads.

 

[molar]

Molar, here are my answers to your questions. I know it is a bit long, but I think there are not many chances in one's life time to make a great investment at reasonable price, so I decide to spend my time to write those down. Enjoy!

1. How much cash and shares are 1300smiles paying for these practices that they buy?

Molar, you can pretty much conclude how many acquisitions ONT has made over the years and the amount they spent on them. The conclusion is that over the last 7 years, there was not a single share issued for acquisitions, and a total of 281273 share will be issued if the earnings target is met.

Over the last 7 years, ONT spent 12152801 on all the acquisitions. Assuming all those shares will be issued, that is a little over 1.1 million, which is less than 10 percent of the total payment.

Acquisition in 2003

Gentle Dental Group - Lisa Matriste
Consideration 14765, no shares issued

Dr Brian Creedy’s
Consideration 50000-100000 no shares issued


Acquisition in 2005-2006

Bardon
Consideration: 263215 no shares issued

Chevron Island
Consideration: 222243 no shares issued

Mackay
Consideration: 32173 no shares issued and subsequently moved into a new facility

Acquisition in 2006-2007

Carindale
Consideration: 1702929 7 beds no shares issued

Other 2 practices
Consideration 329458 estimate 2-3 beds no shares issued
Goodwill: 845963

Acquisition in 2007-2008

Caloundra 1401032
Rockhampton 401042
Toowoomba 2650268
Bundaberg 5035676

Total consideration is 9488018, and goodwill is 7645018, 281273 shares were issued

On this point, it is not possible to get a hold on specific numbers.

Acquisition in 2008-2009

There was no acquisition.

Acquisition in 2009-2010

Springwood 143000
Tingalpa 250 resulted in a negative good will of 535K!


2. Are these contracts conditional on the dentist working for 3-5 years in the practice? ie the purchase price paid for the practice has capitilsed part of the expense for that dentists wages for the next 3-5 years.

I will try to contact the management for the details. Your concern is totally possible. You were implying that ONT was overpaying dentists intentionally so that they can report better earnings, since goodwill will not be amortized. For one thing, this kind of accounting treatment is a violation of law. You were suggesting ONT was systematically trying to inflate earnings, right? Let me ask again, show me the numbers and facts to support your claim. See? I have mine here.

On the other hand, look at the data in 2009 annual report, note 11. If your claim about capitalizing salaries is true, then the goodwill should be a lot higher in a lot of practices. It is common sense that dentists are good earners. 3 -5 years salaries for a single dentist would mean around 1 million dollars. Hey, there is only 3 practices with goodwill over 1 million. Look at the numbers:

Caloundra: 5 doctors 1049000 in goodwill
Toowoomba 7 doctors 2147000 in goodwill
Bundaberg 7 doctors 4693000 in goodwill

So the doctors hang around 3-5 years because of those upfront payments?



3. Why won't management release the figures for individual practices? Is it true that the individual practice profitability Is falling once the original dentists leave, despite introducing increased chair numbers? Is the growth in total business earnings made up by buying more high end practices whatever the cost so that their earnings can be reported as profit! and the overall company report great revenue growth?

Once again, you are making unfounded statements here. Why it is true the profitability of individual practice is falling once the original dentists left? Do you have any numbers here?

Let us do the simple math here. since 2003, ONT spent around 13.3 million in acquisition. In 2003, ONT reported NPAT of 680K. Last year ONT reported NPAT of 4.3 million. So for the 13.3 million ONT invested over the years, and mostly in 2007, the return this year is an astounding 3.6 million. Molar, do we miss something here? Can you explain the increase in NPAT?

Molar, you are also saying that ONT has used acquisitions to boost its revenue and earnings specifically. I am not an expert. But could you please point me to the financial irregularities here? Or is this your imagination?

4. Graham Middleton is an accountant at a company called Synstrat he has extensive experience in valuing dental practices and writes in the ADA federal newsletter. If you want investment advice on this company or any other dental company track him down!

I have no interest to give your friend my businesses.

5. If as the MD says in his report 1300 is so great at running dental practices are they attracting Australian trained graduates of any nationality or are they taking applicants who would work anywhere for an Autralian VISA.

Molar, are you a racist and against immigrants? I know this is a serious accusation, but it seems to me you have major problems with the nationality. In your posts, you implied again and again you discriminated those docs with nationality other than Australians. And based on your writing skills, I suppose you are not a native speaker or were poorly educated. What is your problem then?

For the first time I think you are just a retard.


6. Are 1300 smiles patients happy? Can the company provide any survey data to support this taken from one of the practices after the selling dentist has left and 1300 management has moved in?

............ I really do not get your point. Why do not you run a survey and tell us the results?

7. What percentage of dentists now working for 1300smiles have been there for longer than 12 mths?

I need to contact management to get the answer.

The number one question is " Is the business being run to be a long term profitable business or is the number one goal to report revenue growth and thus increase the SP."

My data and facts, in my opinion, answered your question.


Molar, I am tired of this unfair battle. You issued your guesses, speculations and imagination trying to blast a company that makes its shareholder happy and contributes to the society. On the other hand, I am trying hard to give our readers facts, numbers and careful analysis. Could you please counter all my arguments with your numbers and facts?

I am looking forward to hearing your reply.

Fan

You spent your time writing these down because you have an interest in selling this company. You are so obviously part of the 1300business, which I am suspicious is not about dentistry it is about reporting revenue growth at any cost and thus inflating share price.
If I have misjudged here and you are just an investor well look lets not fall out-I am not a racist and I wish these Immigrants all the best. They however will never generate the profits of the dentists they are replacing nor will most of them in the short term build practices.
Take the Bundaberg acquistion as you say with a goodwill value of 4.6 million dollars will this goodwill value be there in 2 years if Denis Ingham leaves. This initial payment would have been I believe conditional on him and other key dentists signing an agreement to continue working for at least 3 years. In the abcense of this contract his practice could probably have sold on the market for approx 6-800K
Lets look at the earlier acquistions Rockhampton,Gladstone is it true that these practices are a ghost of what they were?
There I go again more unsubstantiated questions?
I'll tell you what FAN. If its numbers your looking for you won't get them from me you will have to obtain these through the correct legal channels. I would imagine all employees and Dentists are bound by confidentiality clauses so they won't be able to help you either. The best I can do for you is to get you asking the right questions.
But you sound like you know what your about so go and buy more of this once in a life time oppurtunity. Life is to short to left asking why didn't I

 

[robusta]

The numbers will not lie but watch them closely beacause by the time you notice it so will many others!!

All I can see at the moment is the satisfactory numbers generated by ONT but as with all the companies I own shares in I will continue to watch them like a hawk.

As far as tangible assets what are they Dental equipment and materials? what else?
Just ask the ? Is this all smoke and mirrors?
At least with ABC childcare the administrators had a lot of property they could sell up!

ABC went bankrupt using the strategy you are warning about this showed up in the ballance sheet and cashflow statement long before they were put into recievership.
The ROE was negative and they had to keep on increasing borrowings and issuing new shares to keep the "growth story" alive.
The biggest sign of trouble was the company cash flow, it went from minus $4m in 1999 to minus $1,372m in 2007.

ONT has a positive cash flow, 2008 $715,000, 2009 $1,807,000, 2010 $4,955,000.

Normally I do not invest in businesses that grow by aquisition as they have a long history of overpaying, when they do it shows up in the cashflow and ROE. With a positive cashflow and ROE of ~33% I believe ONT is a exception until the numbers prove otherwise.

 

[frankbaozhu]

I suppose right now I have made my point clear and my arguments were not countered in anyway.

Molar, I am actually thankful of you. If it were not for you, I would not have pull those things together to get a better picture of the business. Good luck with your investment. I wish you well.

 

[robusta]

When a company relies on the service of highly educated professionals who are usually pretty smart and have more loyalty to their profession than their employer/company, the risk of them leaving is always significant.

There is no doubt some company does it better/worse than others.

RHC has increased profits year after year.
PRY has mis-treated their GPs and their GP clinic profitabilities are way down.
VGH is similar to ONT except they do eyes instead of teeth. Just have a look at their share price chart since 2005!

The lack of disclosure in acquisition of individual practices imo is fair enough. Some practices are 1-2 people and they probably don't like to have their finances disclosed to the whole industry.

Everything Molar raised are potential concerns, but if they are true there would be evidences in the numbers... falling ROE, falling revenue per practices etc. Anyone care to dig them out??

Could not agree more except for VGH being similar to ONT.

VGH just had a massive $66m goodwill impairment charge and also have a Debt/Equity ratio of 154%, cash flow is also ordinary, they have definately been paying too much for aquistions. They will probably have to raise capital in the near future.

 

[molar]

I suppose right now I have made my point clear and my arguments were not countered in anyway.

Molar, I am actually thankful of you. If it were not for you, I would not have pull those things together to get a better picture of the business. Good luck with your investment. I wish you well.

Interesting release on the ASX just now did you do this just for me?

 

[robusta]

Interesting release on the ASX just now did you do this just for me?

Wow let's move this over to the conspiracy theory thread, most companies are making similar announcements to comply with new laws.

Speaking of conspiracies I find it strange that you and your mate or alter ego Billyb have recently joined ASF in late December and have only made negative comments on ONT. I would like to thank you both for your care for ONT shareholders and your warnings. Surely both of you would not have a axe to grind or be trying to impact the sp through your comments for self gain or revenge? No that could not be true I must be getting paranoid.

 

[molar]

Wow let's move this over to the conspiracy theory thread, most companies are making similar announcements to comply with new laws.

Speaking of conspiracies I find it strange that you and your mate or alter ego Billyb have recently joined ASF in late December and have only made negative comments on ONT. I would like to thank you both for your care for ONT shareholders and your warnings. Surely both of you would not have a axe to grind or be trying to impact the sp through your comments for self gain or revenge? No that could not be true I must be getting paranoid.

Obviously I have a motive. I have not had a good experince with this company.
I told you in my opening post how I got to this forum so what you have discovered is not new.
I am not nor do i know who Billy B is but he seems to be descibing the practice with which I am acquainted. I admit it is very co-incidental that he is new to the forum at the same time as me?
However my motives are immaterial. I am not giving any inside information but,.... you my friend have been thrown a bone. I will condense it to one question. What is the individual revenue of each 1300 practice. It is hard to fudge revenue. Look at the revenue of the practices that have been acquired longer than 4 years. Find the answer to this question and you have solved the riddle that is 1300smiles.
I would not believe the allegations of one malcontent were I in your position either!

 

[ROE]

Interesting post last couples of days
I have no intention of selling ONT
I seen this many times before
Sometimes ago some dude pop up in CCP claiming it doesn't have license to collect and a lot of other stuff...I ignore...CCP keep double up in price and double up in profit

Sometimes again ago many of people tell me to sell FLT stocks because they know someone who works in FLT and they not making money in those stores..

I again ignore the bull**** and stick with what i know .. FLT up 300% since

now ONT game on again..again I ignore

 

[Billyb]

Wow let's move this over to the conspiracy theory thread, most companies are making similar announcements to comply with new laws.

Speaking of conspiracies I find it strange that you and your mate or alter ego Billyb have recently joined ASF in late December and have only made negative comments on ONT. I would like to thank you both for your care for ONT shareholders and your warnings. Surely both of you would not have a axe to grind or be trying to impact the sp through your comments for self gain or revenge? No that could not be true I must be getting paranoid.

I have no shares in ONT, so I don't really care too much about what happens to the share price. I don't know much about share investment, but common sense tells me that what I say on a small online forum will have no impact on the share price...so perhaps you may wish to reconsider who is being paranoid. My reason for joining the forum is actually to learn more about share investment in general (I am new to it), but since I am in the dental industry and know a fair bit about how this company works, I felt like contributing my 2 cents.

No that could not be true I must be getting paranoid.

Yes, you are being paranoid buddy. The hostilities in some sections of this forum are appalling.

 

[skc]

I have no shares in ONT, so I don't really care too much about what happens to the share price. I don't know much about share investment, but common sense tells me that what I say on a small online forum will have no impact on the share price...so perhaps you may wish to reconsider who is being paranoid. My reason for joining the forum is actually to learn more about share investment in general (I am new to it), but since I am in the dental industry and know a fair bit about how this company works, I felt like contributing my 2 cents.
Yes, you are being paranoid buddy. The hostilities in some sections of this forum are appalling.

Thanks for dropping in. It's always good to have some industry insights rather than just have traders pouring over the financials. And unfortunately sometimes some holders get a bit offended when you criticise their investments... only human nature I suppose.

The market is a funny place and many things can happen. Enron was 'the most admired company' for many years in a row before the collapse - but there were plenty of time to get out if you keep a finger on the pulse.

There is actually a very simple solution if an investor thinks some of these doubts are valid... just have a stop loss in place for if things start to look ugly. E.g. ROC/ROE fallen below certain level, announcement of falling revenue/profit etc.

But until then, most of what is said here is just speculation.

 

[robusta]

I have no shares in ONT, so I don't really care too much about what happens to the share price. I don't know much about share investment, but common sense tells me that what I say on a small online forum will have no impact on the share price...so perhaps you may wish to reconsider who is being paranoid. My reason for joining the forum is actually to learn more about share investment in general (I am new to it), but since I am in the dental industry and know a fair bit about how this company works, I felt like contributing my 2 cents.



Yes, you are being paranoid buddy. The hostilities in some sections of this forum are appalling.

I am sorry if I caused any offence.

I should have merely pointed out the coincidence of a quiet thread that only had seven post's on it in the six months it has been opened all of a sudden had two new members posting on it exculsively generating twentyfour post's in ten days.

You and Molar may be right and if you are I thank you, but I invest for the long term in companies with good fundamentals and do not trade on rumours.

 

[frankbaozhu]

I am sorry if I caused any offence.

I should have merely pointed out the coincidence of a quiet thread that only had seven post's on it in the six months it has been opened all of a sudden had two new members posting on it exculsively generating twentyfour post's in ten days.

You and Molar may be right and if you are I thank you, but I invest for the long term in companies with good fundamentals and do not trade on rumours.

Robusta, I dunno why you were apologizing. Those people and us are looking at things from different angles(or just from different universe). They like to use imprecise languages, emotions and personal experience to draw conclusions; while we, pathetically and hopelessly, trying to find the truth using common senses, careful analysis and hard facts.

We should relax and follow ROE's lead. Ignore those people and live a happier life.

 

[Billyb]

I am sorry if I caused any offence.

That's quite alright, I can't blame you for being suspicious

but I invest for the long term in companies with good fundamentals and do not trade on rumours.

Your investing principles sound good to me.

What I posted was merely what I observe in the daily functioning of the company, clearly it may not be the absolute truth nor should it be taken as such, but I think a wise person would question the truth of it rather than immediately disregarding it as trash. The egoic, or emotional type would react to such information but a level head would read it with a neutral attitude first before dismissing it as rubbish. I cannot speak on behalf of molar's comments.

Thanks for dropping in. It's always good to have some industry insights rather than just have traders pouring over the financials. And unfortunately sometimes some holders get a bit offended when you criticise their investments... only human nature I suppose..

Your explanation of human nature is absolutely spot on, and although it is obvious, I didn't realise that as the reason for some of the harsh comments on here, so thanks for pointing that out.

 

[jackdau]

iifunds.com.au
They took a position at under $3. They are a value investing fund.

Long-term investment in 1300 Smiles
In March 2005, a small Townsville dentistry business listed on the ASX. In the financial year before listing, the business had made a $1m profit from 13 dentists in 7 dental practices, six of which were in and around Townsville and one in Cairns.
Today 1300 Smiles (ASX code ONT) has 20 practices, mostly down the eastern side of Queensland, and will generate a profit for the year ended 30 June 2010 in excess of $4m, four times what it generated 6 years ago. The growth has been achieved with minimal use of debt, a negligible increase in the number of shares on issue and a
healthy dividend payout ratio.
Managing Director and founder Daryl Holmes still owns 70% of the company and says all the right things (from our
perspective, at least) in his letters to shareholders. His focus is clearly on growing earnings per share,
not growing the empire, which augurs well for a business with abundant growth opportunities ahead of it.
Holmes is not the first person to attempt to build a corporate dentistry business, nor will he be the last.
Capitol Health listed on the ASX in 2006 and almost went bust not long after. Capitol has since switched
its focus from dental practices to medical imaging and diagnostics but the current share price of 3 cents, versus a listing price of 20 cents, says it all.
In contrast to Capitol’s experience, Holmes has been able to make it work. The basic business model is to offer dentists a service which allows them to outsource all the administration and procedural work to 1300 Smiles. All the dentist needs to do is dentistry, 1300 looks after the rest. The dentist keeps 40% of the revenue and 1300 uses the rest for staff, marketing, equipment and to generate a profit for shareholders.
For now Holmes, a dentist himself, is focused on large regional centres where there aren’t enough dentists to meet demand. (One regional centre had a three month waiting list before 1300 opened in the town. That’s now been cut to two months.)
The 20 practices successfully operating today represent about 0.5% of the Australian market for dental services, so there’s plenty of room to grow if Holmes can keep finding attractively priced practices to buy or attractive locations on which to build new practices from scratch.
The transition from a small one man business to a successful large corporate is never easy and we
don’t expect this to be any different. Holmes is going to need to find high quality support as the business grows and he’s going to need to pay them substantially more than the $80k salary he pays himself. But we’re quite excited about the prospects for this business and very happy that we’ve been able to establish a fairly large position for the fund in what is a very illiquid stock. The downside is that selling such an illiquid position would be difficult, but this is a business we hope to be involved with for a long, long time.

I think that this is the same as any company. You watch what comes out of the MD's mouth. You sweat over the numbers and if the two don't correlate then head for the exit.

I agree that the last few times Mr Holmes has put pen to paper it did sound a bit grandiose.
However when I have emailed him he was very quick to reply and answered my questions - though with not as much detail as I would like.

Whoever looked up on google maps the HQ - awesome dude! I was cracking up. That reminded me of Peter Lynch's 'One Up On Wall Street'. He loved it when the HQ was out of the way, disheveled and obviously in need of new carpet.

I work in a 7 doctor general practice so I have a inside view on running a medical practice. Dental practices have higher overheads (more staff) but they also have greater revenue per hour than most GPs.

Declaration of Interest: ONT is now my biggest holding due to the recent surge in the share price.

BTW I am new here. Is there a value investing forum here on aussiestockforums? If not I would love to here of some other good companies with high ROE/ROC, and little debt. If they can also retain a lot of their earnings as well that would be great. Oh yeah -final point- let me know if you think their current price has a large margin of safety as well.

 

[robusta]

Interesting half yearly report out today compared to pcp:
Revunue up 25% to $14.569m
NPAT up 19% to $2.687m
EPS up 14% to 12.6c
Interim dividend up 15% to 7.5c

On the face of it it makes me regret taking some profits a couple of months ago @ $4.15because the sp was at a substantual premium to my calculation of IV.

Now the interesting part, ONT have granted a licence to a marketing and managemant company, allowing it to market, manage and operate four southeast QLD practices.

I allways thought ONT was in the business of managing dental practices so why sell that right?

Note 9 Individually Significant Items
"....statement of comprehensive income includes liscence fee of $183,000...statement of financial position includes a licence fee recievable of $900,000"

This makes me wonder are ONT giving up future profits to this marketing and management company?

 

[So_Cynical]

I allways thought ONT was in the business of managing dental practices so why sell that right?

Note 9 Individually Significant Items
"....statement of comprehensive income includes liscence fee of $183,000...statement of financial position includes a licence fee recievable of $900,000"

This makes me wonder are ONT giving up future profits to this marketing and management company?

Looks to me like there taking a 900K fee i lieu of actually having to operate 4 practices...a sort of quasi franchise?