27/02/2007 - 22:00

Bailey pursues dental plan

27/02/2007 - 22:00

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Dentistry may still be largely a cottage industry, according to DB Dental owner David Bailey, but the industry is following other health professions in a trend towards corporatisation.

Bailey pursues dental plan

Dentistry may still be largely a cottage industry, according to DB Dental owner David Bailey, but the industry is following other health professions in a trend towards corporatisation.

With 12 existing surgeries and a head office and call centre opening in Fremantle this month, DB Dental is the biggest player in the WA market, using a business model that has been transplanted from the UK.

The organisation currently employs more than 130 staff and is the largest privately-owned dental group in Australia.

Mr Bailey qualified as a dentist in 1975 and developed a business of six surgeries in Manchester, before selling each individually in 1987 before moving to Perth.

He established the first DB Dental surgery in Innaloo during the same year.

Mr Bailey said the dental chain had assumed a larger scale in WA.

“We made the model a lot bigger here,” Mr Bailey said. “Basically, what we’ve done is follow the freeway from north to south.”

Mr Bailey said location was critical when selecting a site for a surgery, while the industry’s ratio of one dentist per 3,000 people was important to adhere to.

“We need to find an area that’s got high traffic flow and where it’s easy for patients to park,” he said.

“If you’re going to set up a green site [without existing patients], you need the traffic flow.”

The surgeries are owned by DB Dental, rather than franchised, with each dentist an employee of the company. Only two of the company’s 13 surgeries have been purchased as existing businesses.

Mr Bailey said DB Dental had been successful partly because it had entered the market at a time when there was no competitor group in WA.

“Dentistry is still a cottage industry. I think it’s just the nature of the beast,” he said.

Dentists were attracted to the arrangement, Mr Bailey said, because it offered them flexibility without administrative responsibilities.

“They’re always as busy as they want to be, with the call centre, so there’s no down-time,” he said.

Mr Bailey said the company was aggressively pursuing a new surgery in Morley and was considering an interstate expansion, although it did not have any imminent plans to list on the ASX.

Of the other dental chains in Australia, Queensland-based 1300smiles is a publicly listed company, which manages 18 dental surgeries in the state, and is DB Dental’s biggest competitor, according to Mr Bailey.

Locally, West-Perth based Capitol Health listed on the ASX in June last year, acquiring Kalamunda Dental Care in August, and currently operates three centres in Perth.

The company registered a positive operating cash flow from operations for the quarter ending December 2006.

Other players to venture into the WA market have had a tougher time of it.

Dental laboratory services company Pearl Group, which is headquartered in Melbourne, announced in its 2005-06 financial report that it had invested nearly $500,000 in its WA lab, based in Osborne Park.

However, less than six months later, the group reported a loss in revenue due to the departure of its lab manager.

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

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