No Images? Click here 14 June 2019 Smiles Inclusive Limited – The Australian 11 June 2019The article headed “Smiles Inclusive keeps poker face on deals” referred to “speculation” that a private equity firm is partnering with a “strategic player” for a possible buyout of the business. Personally, I wouldn’t be rushing to buy Smiles Inclusive shares on what looks like an attempt to feed a rumour into the market. Since CEO Tony McCormack who recently survived manoeuvres by founder and former CEO Mike Timoney to regain influence over the business indicated that it had not received any approaches. Smiles Inclusive has been plagued with litigation, legal claims and attempts to destabilise the board with founder Mike Timoney soundly defeated at the recent Extraordinary General Meeting. A subsequent allegation that some shares had been incorrectly counted was easily brushed aside by the company given that the company’s share registry had conducted the voting procedure. It is apparent that all was in order. Smiles Inclusive announced in April that it expected to make a loss of at least $4 million this financial year. That’s a fairly hefty amount for a business with a market capitalisation of around $6 million. The article speculates that National Dental Care which has had to defer its listing scheduled for late last year when the performance of some of its practices was not as expected, maybe tried to link itself with Smiles Inclusive. The reality is that not only has Smiles Inclusive Limited proved to be a disastrous investment for those who participated in its IPO last year with a current share price of 13 cents compared to its IPO subscription price of $1, combining it with another dental group which had to defer its IPO doesn’t appeal as a rock solid foundation from a future investment point of view! The reality is that over the past 12 months investment in listed dental and veterinary companies has proved to be at best a negligible return (1300 Smiles Limited) or in other cases extraordinarily poor in their results as evidenced by the results of Pacific Smiles Limited, Apiam Animal Health Limited, National Veterinary Care Limited, all of which had dismal years, and of course, the disastrous Smiles Inclusive Limited. Investors should not have to look far to find better investments than listed dental and veterinary companies. It is apparent that corporatizing a string of practices usually results in many of them performing far worse than well run privately owned practices conducted by hard working dentists and veterinary surgeons. Once the original owners have been paid out and left many of the practices suffer a leadership crisis. The staff who remain may not be motivated by a corporate song book. This advice may be regarded as general advice only as those truly interested in exploring this investment avenue should take advice elsewhere. Best wishes to all Dentists, GRAHAM MIDDLETON Disclaimer: The information contained herein is of a general nature and no specific action should be taken without individual advice. Speak with Synstrat staff as appropriate. Prepared by Synstrat Management Pty Ltd for clients of the Synstrat Group. Synstrat Management Pty Ltd is the holder of Australian Financial Services Licence No. 227169. ABN 57 006 295 325 The Synstrat Group provides Accounting, Financial Services, Business Advice, and Financial Advice. Prepared by Synstrat Management Pty Ltd for clients of Synstrat Group. Synstrat Management Pty Ltd P. 03 9843 7777 ABN 57 006 295 325 If you are not the intended recipient of this communication please delete and destroy all copies of this message and telephone Synstrat on +61 3 9843 7777 immediately. If you are the intended recipient of this communication you should not copy, disclose or distribute this communication without the authority of Synstrat. Any views expressed in this communication are those of the individual sender, except wh ere the sender specifically states them to be the views of Synstrat. If you do not wish to receive this email in future, please reply to the sender requesting termination of service. |