Oasis sinks to £2.3m loss after biting off more than it can chew

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The Independent Online

Oasis Healthcare, which operates the country's biggest chain of dentist shops, tumbled into the red last year after buying 63 new sites.

The company, which was floated in 2000, is seeking to change British habits of a lifetime and get the nation interested in looking after their teeth.

"The average consumer has never really realised that the perfect Hollywood smile is something that you can buy," Malcolm Hughes, the chief executive, said.

The AIM-listed group, which acquired the Dencare and Ora dental groups last year as well as 17 independent practices, reported a pre-tax loss of £2.3m against a loss of £13,000 the previous year.

Mr Hughes said the company was one year ahead of the targets set when it floated. In less than three years, it has expanded from a base of 14 sites and annualised turnover of less than £6m to an estate of 128 practices with annualised turnover of £73m.

"We are seeing the benefit of our strategy to increase private healthcare treatments [taken out by our customers]," Mr Hughes said. "The UK has the lowest level of spending on dental care in the developed world, so the market is very immature," he added.

In the company's core estate, private treatments as a mix of turnover rose to 44 per cent from 36 per cent the previous year. Across the group, private treatments, such as implants and cosmetic work, account for almost two-thirds of total revenues.

Oasis signalled an end to its "buy and build" phase, pledging instead to deliver "strong organic growth" by increasing the number of surgeries within practices and extending surgery hours. Growing the business would be about persuading more of its current patients to splash out on private health care and take better care of their teeth, Mr Hughes said.

"We have all the patients we need already attending [our surgeries]. Our marketing is all internally focused."

Robert Brent, at KBC Peel Hunt, the company's broker, said the "opportunities are significant", given that the group is already the market leader with a 2 per cent share. A recent report of the dental care market valued it at £3.7bn in 2001/2002.