An Address to the Australian Institute of Company Directors

By Dr. Daryl Holmes

Ladies & Gentlemen, I stand before you at one of the more interesting times in Australia’s economic history. In the past year we’ve seen the supply of capital to all but the very strongest of companies dwindle to a trickle.

We’ve seen highly leveraged companies of all kinds descend into bankruptcy and liquidation, despite, in some cases, the high quality of their core assets. We’ve seen the All Ordinaries Index decline by about 40% from its peak just over one year ago, on the first of November 2007.

I stand before you as the managing director of a small but fast-growing ASX-listed company, a company which requires ongoing access to capital to carry on with its aggressive growth plans. Yet I stand before you entirely relaxed and confident. How can this be so?

To explain this happy situation I have to tell you a bit of the history of 1300 SMILES Ltd. I qualified as a dentist back in 1987 then practiced as a Dental Officer in the Royal Australian Air Force for 3 years after that, finishing off my time in Townsville in August, 1991. Thereafter, I owned and operated numerous dental practices in the Burdekin and here in Townsville. Along the way I made many mistakes and learned plenty about how to run multiple facilities employing highly qualified professionals.

By 1999 I had refined my approach and settled on the business name Townsville Family Dental.

This grew to comprise six facilities here in Townsville and one in Cairns—where we used a different name, as you can imagine. It took some years to get many aspects of the business worked out, from purchasing and collections to the massively important and massively difficult business of human resource management. All of these areas can still be challenging, but you would all understand that you know a lot more about a business after you’ve spent ten or more years wrestling with it.

By around 2002 I started to toy with the idea of a listing on the Australian Stock Exchange, but not for the usual reasons. Most small companies that seek listing do so because they need more capital. That wasn’t a problem for us, as the business had been profitable for several years and it delivered positive cash flow every month.

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