Ann: H1 2013 Investor Presentation , page-4

Fair bit of hyperbole going on there in my view.

For starters, i can imagine there'd potentially be quite a few people interested in paying a few hundred dollars a year even if this sort of dental care plan is implicitly available under existing private health providers. The issue with buying extras only cover from, say, a BUPA, is that they are invariably package deals (i.e. optical + dental + ambulance + physio etc.) rather than exclusively dental care deals so if the only service you use is dental, you're not getting value. It's much the same frustration i face when buying Foxtel (as an example) - i (and probably quite a few people) have Foxtel purely for its sports channels, but i am forced to subscribe to a bunch of other channels i don't watch to get access to the sports channels. So, while i pay $70 per month for sports + a bunch of irrelevant channels, i'd be happier paying, say, $30 for sports and nothing else. I also suspect there'd be quite a few people out there who aren't on any sort of private healthcare (either hospital or extras) arrangement as they're below the medicare levy surcharge threshold, and some of these people may find a dental care plan useful.

I'm not sure how you came to the conclusion that the company is either likely to raise equity or be sold.

I struggle to see a near-term equity raising given:
- They are sitting on $10m net cash as at 31 Dec with nil debt to speak of
- The company is cash flow positive, and will remain so even if total industry revenue falls substantially because the company's 3 major expenses (paying dentists their share of billed work, consumables used and income tax) will fall to a similar extent
- Holmes has repeatedly stated that he likes to keep equity on issue to a minimum

I also struggle to see a near-term sale of the company given:
- If, as you say, the next year or two is likely to be a bad period for the industry, it would make no sense for Holmes to cash out now
- Who's the buyer?
- Holmes has repeatedly stated he's in it for the long haul and wants to gradually expand the business around Australia, with a long term target of 100 practices

The August numbers will be the first chance we'll have to see what damage the closure of the CDDS scheme has had. There's no doubt it'll have some impact, but i really struggle to see any of the scenarios as you've painted them playing out (i.e. ABC Learning type corporate collapse, equity raising or company sale).