Apologies for responding to your post now; it completely passed me by.
Yes, explanation for the significant variance in costs over the periods in question related to two things:
1. The sale of a dental practice in DH15 (as someone rightly identified on this forum), which saw a 6% Revenue fall and a 13% cost reduction in JH16 vs JH15.
2. A cost blowout over the course of FY15 due to - and I'm paraphrasing a bit roughly here - costs getting out of hand in the department of a new GM that had been appointed during FY2015. Sounded to me like this "GM" was of the empire-building mindset and surrounded himself with some expensive bodies, and this was all unwound during late 2015, further adding to the reduced employee costs in JH16.
So while all sounded plausible to me, I have to admit to being a bit bewildered by the developments as sketched in point 2 above. Because I thought that ONT was a more tightly-run ship than is implied by this sequence of events.
So while the explanation of the whip-sawing movements in employee expenses passed the reasonableness test, part of it did raise a few new questions in my mind, particularly how key senior appointments are made and possibly how KPI are set.
Of course, to ONT's credit, the remedial action to repair the damage caused by "new GM" was, evidently, decisive and effective.
ONT Price at posting:
$7.62 Sentiment: Buy Disclosure: Held
