doctor remain in firm control

The debt recovery has run its course and impacts of long term company and industry economics come to the fore. It is dead right when observers say the executive team at VEI needs all the help it can get to progressively execute a strategy away from doctor partner income dependency. Profits at VEI will remain constrained by the increasing take of the doctor group, enabled by their enormous leverage over the company's very existence. The banks are tuned into the risk. Comments on inevitable additional increases to profit pools as made in the recent ASX release provide continuing evidence of the challenge ahead. It isn't difficult to see why the doctors would pursue their own interests with such vigor; they are enjoying the best of both worlds cocooned in the VEI listed shell, nirvana - power over all key decisions (board dominance, threat of departure if pushed or commercial blackmail etc), whilst cost free capital funding (the best of new equipment, debt repayments, nursing contracting risk and operating lease commitments) is provided by a shareholder stakeholder group that is quarantined away, largely powerless and impotent. Not even thw heavy hitter fund managers got their way on the recommencement of dividends. We'd probably all do the same. Reconciling the two competing stakeholder interests isn't impossible; it will take an executive team with lots of guts, diplomacy and effective execution on alternative growth strategies to get the balance right. Since this vehicle first listed in 2004 the success stories of Smiles, Greencross and Virtus amongst others prove it can be done and the untapped potential in the sector remains.