Former Neptune Marine managing director Andrew Harrison’s new corporate dental group Capitol Health listed on the Australian Stock Exchange last week after a $1.8 million initial public offering.
Former Neptune Marine managing director Andrew Harrison’s new corporate dental group Capitol Health listed on the Australian Stock Exchange last week after a $1.8 million initial public offering.
Former Neptune Marine managing director Andrew Harrison’s new corporate dental group Capitol Health listed on the Australian Stock Exchange last week after a $1.8 million initial public offering.
Mr Harrison told WA Business News that he first came up with the idea for a consolidated dental group two years ago despite previous corporatisation efforts in the consumer health field meeting mixed results.
Fellow Capitol Health director and friend Dr Russell Fine is a dentist and provided Mr Harrison with an opportunity to look inside the operations of a dental business.
“I began working full-time on putting the model together after leaving Neptune and we incorporated Capitol Health in December last year,” he said.
The business secured seed capital and its first practice, Banksia Dental Care in January, followed by The Booragoon Dental Clinic, in May.
Capitol plans to acquire dental surgeries around Australia and provide systemised administrative and management support to practicing dentists, who would remain with the practice.
“There is a stigma attached to corporate structures in the GP arena but I was attracted to dental because it is a service business and open to consolidation,” Mr Harrison said.
Capitol believes it can add value through fit-out equipment in practices and associated inventory, which it can acquire with economies of scale.
It believes a key difference with corporate GP structures in that the main cost variable in a GP practice is the doctor’s hourly rate, reducing value-add opportunities.
Practices will be maintained in their own name, helping to retain goodwill in the business.
Capitol will buy practices and then contract the practicing dentist back into the businesses.
“We will target practices with dentists looking to retire, so they can work in the business for a period of time and then we will introduce new dentists into the practice,” he said.
With about 5,000 independent dental practices around Australia, Capitol foresees little trouble in achieving their target of 50 practices nation-wide within two years.
In WA, it is hoping to build a critical mass of between eight to 10 practices in the next year.
“We see opportunities with dentists who don’t want to burden themselves with the significant debt associated with their own practice,” he said.
Shares in Capitol closed at 26.5 cents on June 13, above its issue price of 20 cents.