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$7.13 1300 smiles limited

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travelightor

744 Posts.

238

02/09/17

19:02

Post #: 26954043
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Originally posted by kinggee ↑

There is a difference between predicting the eventual demise and the immediate demise. The model is flawed and my opinion is it will fail......eventually. I have thought this way since shares were $2 by the way (about 10 years ago). The about to "disintegrate any minute now" seems to be an attempt to mock me but as best I can recollect I have always said I don't know when it will fall apart but I think it can only end one way.
This line that the CDDS was switched off overnight is company spin. It is not true. The Labor government announced they wanted to stop it 2 years before they did. It took them that long to get the numbers in the Senate and even then they had to replace it with the CDBS to get it thru the Senate. There were letters sent out to Dentists announcing the scheme would end for 2 years before it actually did. I received two such notices from memory over this time which didn't eventuate because the legislation to close it wasn't passed. Every Dentist who read their mail or the ADA newsletters knew it was closing for well over 12 months before it did.
1300smiles chased this work they had brochures made up spruiking it. There were people doorknocking the neighborhood trying to recruit patients for it. So not surprisingly they had a 20% downturn when it stopped. This was something I predicted correctly on this forum months before it happened......right?
There was no sharp economic downturn either the mining boom which was mostly FIFO anyway was replaced with the BEEF boom and farmers spend money on their teeth when they have it. Mine workers spend their money on 4wd's,bikes,boats,parties.....so that to is company spin the effect of the mining slowdown on Dentistry was and is minimal. It makes for good blurb in the MD's list of excuses tho.
What has changed is health funds owning practices and using the data they collect thru claims history to open practices in the most profitable locations. They also have the ability to try and steer their insurance clients to their practices. That is they pay a larger rebate at their practice than at anyone else's. There is a current Senate enquiry going on into this abuse of market power by healthfunds.
Growth in 1300smiles comes from buying high-end practices with incentivised contracts. These practices are sold by close to retiring principles due to the tax benefits of taking their next five years earnings as a capital gain. These principles have invariably left when their time is up. This is supported by the evidence.
There has been no growth since 2014 other than from that obtained by paying 11million dollars for two practices.
Granted 1300 has been able to sustain the practices after the principals go to a better extent then I thought they would but I believe this will catch up with them.
Completely accepted I could be wrong regarding my predictions and to some extent have been in the past.

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@kinggee

Although I'm not a current shareholder of ONT, I have always maintained an interest in the company's development since I last sold my holdings a few years ago.

Personally, I welcome your input into this forum as it brings balance to the discussion which sometimes can be a little bit too accommodating of the CEO.

Your insight into the industry as an insider is something that I value and I wish in my other holdings, there are also contributors who regularly give opposite views which challenge my investment thesis.

Please keep your posts coming and don't be discouraged by some of the posters, they are generally quite open minded to opposing views.

ONT Price at posting: $6.88 Sentiment: Sell Disclosure: Not Held
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