Ann: Managing Director's Adddress to AGM , page-4

There is a lot of wishful thinking going on in your analysis
1. If you look at the recent company reports you will see that the majority of 1300s revneue now comes from their own employed dentists not from Dentists paying management fee's to 1300 to handle the admin. This maybe because there are actually more hassles for a Dentist to run his practice under the 1300smiles umbrella than there is for him to just employ a practice manager (60k per year) to do the admin for him without any upper management interference. Any dentists with a long term view to practice in an area is unlikely to use 1300 as a management company. The dentists that use 1300smiles management are usually itinerant dentists who have recently immigrated and are moving around testing the water in different locations or Dentists whose practice sale involved a goodwill payment that was conditional on them signing up for a number of years, or dentists who could not get a job anywhere else.
2. As the "Bought out dentists" leave 1300's saviour has been the CDDS. The management mandated that all dentists working within 1300 Bulk Bill CDDS. They had special brochures printed up and available in the surgeries promoting the facts CDDS patinets could be seen for free.
In this way they were able to keep these new unknown dentists busy with profitabkle work. If the industry average was 20% revenue CDDS 1300's has to be way above this because they actively pursued this work and advertised the fact that they bulk billed!
3. The CDDS was extremely profitabkle for dentists because it included such a wide range of complex dental procedures. The government when closing this down referred to the scheme being rorted. It was not so much that it was rorted in anyway that they will be able to prosecute however the work done was biased towards the highly profitable work. There are not many mouths in australia in the 50+ age group that would not benefit from several teeth being crowned. This was the work that was done and the dentist profit margin is 2-3 times what it is for routine hygiene,checks etc. If the patients were being asked to pay for this themselves the more likely response is "just patch it please" Given the cost blow out no future scheme in the near future will be as lucrative for dentists.
4.I have no idea what effect the DMA plan will have but the manager seems to be overselling it without any figures."I am blown away with the effect this is having on forward bookings) Give us some numbers please!

I am of the view that this business was always more about selling shares to mug punters than running dental practices. The CDDS kept the dream alive because it has covered up for the selling dentists leaving by supplying a huge pool of people who wuill see anyone if it's free. Now, as he says in his speech the bomb on the bus is set to blow!