HMAS, that's an interesting perspective you're bringing...

HMAS, that's an interesting perspective you're bringing there.

You claim that 30% of your practice's revenue is derived from the soon-to-be-abolished CDDS scheme. That seems an unusually high percentage given that, according to ONT's presentation to the market on 10/9/12, only 16% of total dental healthcare expenditure is Federal Government funded (and the Chronic Disease Dental Scheme is not 100% of total Federal Government spend). Where is your practice located? Why is your proportion of revenue from the Federal Government so high - and i am right in assuming you're a long way above the industry average?

I think the potential downside of the changes in the Federal Government scheme to ONT is pretty small, for a number of reasons:
- Not all of their revenue is derived from providing dental services per se. A good portion is derived from managing other practices.
- The Fed Government is replacing the existing scheme with another one to commence in early 2014, so at worst there'll be a down year before things come back
- If some practices are forced to sell on the cheap, that's a good thing for ONT (longer term) - they are very well capitalised and have proven disciplined acquirers in the past
- There is a lot of opportunity to scale revenue up in their existing practices by getting more dentists in
- I think there is also a good opportunity for them to get more government-funded work via a PPP with Fed/State governments, in the same way as Fed/State governments providing funding to get public sector healthcare procedures done at private hospitals (i.e. colocated facilities)

Cheers