This time last year at the 1300SMILES AGM the Board announced that the government was scrapping the Chronic Disease Dental Scheme (CDDS), which made up around 20% of all dental fees charged in Australia. For shareholders the concern was how this would affect 1300SMILES future revenues.
At the AGM the Board announced that they were introducing the $1-per-day dental care plan.
The result for the 2013-year: 1300SMILES has posted a 3.1% increase in Net Profit After Tax (NPAT). This reflects the drive of the 1300SMILES board.
Compare this to the industry where hundreds of practices have seen a major drop in revenue because of the scrapping of the CDDS. This has forced some owners to look at selling their businesses.
Managing Director Daryl Holmes was quick to point out that their first half profits was abnormal due to the rush of CDDS patients having to have work completed by December 2012.
For me it was the second half, which I was interested in as it gives a better guidance as to future performance of the company.
Although January to March 2013 were relatively quite April to June 2013 saw month on month growth in revenue. This was bolstered by the increase take up of the $1 per day dental scheme which now has around 5,000 members which adds a passive ongoing income stream.
1300SMILES also worked with the Queensland government to reduce the 2600 patient long government dental waiting list to 349, which also added to their revenue.
They are also starting to see CDDS patients who have sufficient funds to pay for their procedures coming in to get the work done.
1300SMILES business model has so far shown that it is robust in the toughest of times.
Dividends grew in 2013 for a full year dividend of $0.185 per share.
We continue to recommend 1300SMILES.
For more information on 1300SMILES (ONT) please contact us on 07 4771 4577.