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Last edited 3 months ago

Based on half year results x2, NPAT of ~8.7m expected. This implies company trading at around 17.5x earnings on >4% yield, fully franked.

I like very much the way that management addresses shareholders within reports, indicating an actual dedication to the business and the industry. The company is certainly a services 'roll-up' type prospect, though largely acquisitions have been funded by cash flows from existing / core business. 

Overall, I think the company has demonstrated prudence in past acquisitions and continues to report growth, recently around 15% for both top and bottom line. Worth noting that the company is not particularly scalable in terms of its profitability given overwhelming majority of dentists within the group are self-employed and typically pay service fees only to the group. With this comes increase in administrative work, disposables etc. Net margins under some pressure, reducing a few per centage points over recent few years to currently ~18%.

Class operator and highly respected within industry - currently interested though not a buyer. May be worth a closer look in the future.

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