Extract from Times article :

http://www.timesonline.co.uk/newspaper/0,,2706-2217603,00.html

................OASIS IS COURTED

Shares in Oasis Healthcare leapt 40 per cent to 24p after the dentist chain said it had received several approaches to buy the company.

Oasis declined to comment further, but City sources said that venture capital firms, including Legal & General Ventures, 3i and HgCapital, were understood to be lining up bids at 30p to 34p a share in what is likely to be a hotly contested auction.............

Web Site : http://www.oasisdentalcare.co.uk/

Email News Alert : http://www.oasisdentalcare.co.uk/investors/email/

About Oasis Healthcare

Oasis Dental Care Ltd, is the UKs leading operator of dental practices in the UK, with over 120 practices throughout England and Wales. A wholly-owned subsidiary of Oasis Healthcare Plc, Oasis aims to become the national dentist of choice for patients, staff and associates, providing a recognised and consistent service.

History of the business

Oasis has acquired well-established, profitable dental practices with potential for expansion which satisfy specific criteria in terms of size, operating performance and clinical capability. Through investment in new surgeries, practice refurbishment and marketing, supported by the introduction of specialist services, such as Orthodontics and Implants, and increased focus on customer service and higher quality private treatment, the Company expects to achieve significant growth in practice turnover and profitability.

Oasis has undertaken a period of rapid growth since it was established in 1996. The key milestones have been:

1999 Oasis made up of four practices
2000 Growth to 12 practices and listed on AIM
2001 Acquisition of a further 23 practices
2002 Growth to 65 practices
2002 Acquisition of Ora Dental Group Ltd with a further 10 practices
2003 Acquisition of Dencare Management Group Ltd with a further 36 practices
Today Total estate of over 120 practices

The Oasis vision

Our vision is to be the national dentist of choice for patients, staff and dentists, providing a recognised and consistent service.
We aim to harness the capability of over 120 practices whilst recognising that dentistry is a local business which must respond to local needs. Our cluster model provides the balance required for our network of over 500 dentists and 1300 staff.
To meet our strategic vision we have therefore moved away from an overtly centralised business model to one structured into 21 geographically-based clusters of up to 10 practices.

The cluster model

Each cluster is run by a full-time cluster operations manager and a part-time cluster clinical director. This balanced management team - who are fully profit & loss accountable with the authority to make the majority of day-to-day capital expenditure decisions - ensure the application of local knowledge. This structure also ensures that staff and associates work in a culture of belonging to a wider Oasis community. This has a number of benefits:
optimisation of internal referrals
focus on local recruitment activity
sharing of resources, experience and best practise

Acting as a corporate body

Alongside the cluster teams we have five regional dental directors as well as the central clinical Board, formed of a majority of senior dentists. This team is charged with the construction and maintenance of our clinical governance framework, and to determine clinical support for the services we provide.
Our commercial team meanwhile focuses on optimising the commercial gains from our size and scope, including optimising supplier deals and implementing new products and services across the estate.

The future

In the short term Oasis will focus on the continued implementation of localised clustering and optimisation of profit from the existing estate. In the longer term we anticipate embarking on a structured acquisition strategy. We are confident that our vision and strategy will allow a success to be made from the corporate dentistry model.

Major Shareholders

Advent VCT--------------------7,508,113 (9.20%)
BLS Holdings Ltd Prtnship----6,749,964 (8.27%)
Singer & Friedlander IM Ltd--6,590,000 (8.07%)
Joseph Joe King--------------3,347,500 (4.10%) DIR
Goldman Sachs Group Inc-------2,855,500 (3.50%)
BWD AIM VCT PLC--------------2,542,500 (3.11%)

Here is the latest (June 06) update from http://www.armshare.com

The company broker's note dated 31st May 06 projects fully taxed adjusted EPS of 3.3p for 2006/7, 4.1p for 2007/8 and 4.9p for 2008/9 representing P/Es of 4.5, 3.6 and 3.0 respectively based on the share price of 14.75p at 31st May.

"
The final results to March 2006 showed sales of 82.5 million (2005: 74.9 million), operating profit of 2.4 million (2005: (384,000)), pre-tax loss of 366,000 (2005: (2.9 million)) and adjusted EPS of 3.36p (1005: 1.78p). The company reported that the growth was achieved from 122 practices (2005: 125); practice EBITDA was 10.9 million (2005: 9.1 million) representing 13.2% of sales (2005: 12.1%) - there are a number of practices, particularly within Greater London, which are achieving under 10% (compared with the target of 15%) and for which strategies are being formulated to deliver improved performance over the current financial year; capex was 4.2 million, of which 1.2 million related to 8 new Welsh practices and 2.9 million was on modernising 36 surgeries; debt was reduced to 37.0 million (2005: 39.5 million); working with Kodak, a new clinical IT system is being developed which will, for example, enable the viewing of patient records by both the referring dentist and the relevant specialist, irrespective of geography.

Research Standing

We said " With the heady days of expansion over, at least for the moment, its going to be a long course of treatment, as exertion of buying muscle and the drive for private patients opens a long road towards the necessary levels of returns. It hasn't been pain free yet, but when the current cavity is filled it may well be time for the healing process to begin."

The company broker's note dated 31st May projects fully taxed adjusted EPS of 3.3p for 2006/7, 4.1p for 2007/8 and 4.9p for 2008/9 representing P/Es of 4.5, 3.6 and 3.0 respectively based on the share price of 14.75p at 31st May.

COMPANY MEETING

ArmShare met the current CEO on 1st December 2005. Oasis has followed the well trodden buy and build strategy, and reached the stage where conventional business skills needed to be applied if the organisation was to deliver shareholder value. In 2004, the CEO who implemented the initial strategy left and his replacement (who joined in August 2004) brought in-depth experience of running retail multi-site operations. This lead to the implementation of the cluster infrastructure referred to above - the early signs are that this is producing a virtuous circle of being more attractive to dentists, providing a better service to clients, organic sales growth and better margins - these early signs were endorsed by the final results to March 2006. Continuation of the virtuous circle will make it quite straightforward for the company to handle what presently looks like excessive borrowings totalling 37 million at March 2006 (2005: 39.5 million). "


__________________________________________________________________

Recent Institution and Director Buying ;

19th Sept 2005 S Lambert buy 1.0 million @ 10.5p
19th Sept 2005 G Blomfield Buy 500,000 @ 10.5p
29th April 2005 Goldman Sachs Buy 2.855 million.
14th Dec 2005 Stephen Lambert Buy 100,000 @ 12p
3rd Dec 2005 Stephen Lambert Buy 165,000 @ 10.5p
3rd Aug 2004 Stephen Lambert Buy 35,000 @ 16.2p
_______________________________________________________________

Links :

Wales Feb 2006 Link

Oriel Securities 6th April 2006 BUY

2005 PTP 2.1M
2005 EPS 1.8p

2006 PTP 2.7M
2006 EPS 2.4p

http://www.eveningleader.co.uk/ihome3/detail.asp?storyid=939&officeid=1

New dental surgeries launched

TWO new dental super surgeries have been launched, with a third on the way.

Oasis Healthcare has experienced a registration frenzy as thousands of people sign up for new NHS dental places in Flintshire

New practices are at the Lakeside Business Village, St Davids Park in Ewloe, and at Acorn Business Park, Flint, while the new surgery in Mold will also open soon. Oasis say patients from all three sites have already been seen.

Wales project leader Caron Best said: The Ewloe and Flint practices saw their first patients on March 31. We have experienced a high demand on available places and we have had a significant number of people signing up.

The three surgeries will provide an extra 40,000 NHS places for Flintshire residents. Coupled with the expansion of seven county practices, the move will add 50,000 new places to current levels helping to ease the crisis facing Flintshires health service.

Thousands of residents were axed from treatment lists over the past two years, as dentists quit the NHS. Oasis was chosen by Flintshire Local Health Board above its rivals to help take the countys dentistry provision forward.

http://www.harboroughtoday.co.uk/ViewArticle2.aspx?SectionID=760&ArticleID=1454361

Dentists fill gap in care for children 21 April 2006

A PRIVATE dental practice in Harborough is taking on 400 extra children as NHS patients.

Oasis Dental Care in St Mary's Road has been able to provide the extra places, up from 800 to 1,200, under the new NHS contracts which came into force earlier this month.
Part of the scheme is a 12-month pilot project that will see one of its dentists, Dr Damien Kirk, treat children at the practice on Saturdays.
An extra dentist, Dr Matthew Perkins, is also being employed to take on some of the extra work. He is coming from an Oasis practice in Brackley, Oxfordshire.
Melton, Rutland and Harborough Primary Care Trust took over provision of dental treatments on April 1 and has negotiated with practices to secure NHS services.

The Government gave the PCT 1.4m to commission dental services in the Harborough district, which has passed on some of this money to Oasis so the practice can take on the extra patients who must be aged 18 or under.

The PCT will not reveal the amount paid to Oasis because it is commercially confidential information.

Clare Medhurst, Oasis manager for Leicestershire, Northants and Warwickshire, said: "We are able to provide for the extra patients by taking on a new dentist and by one of our current dentists working on a Saturday."
Louise Proctor, the trust's director of primary care and community services, said: "We are working hard to increase access to NHS dental services in this area. I am very positive about the opportunity we now have to improve local access to NHS dentistry."

Moving up today......

And up again today too :)

And up again too, certainly some positive sentiment coming back.

L2 is 2 v 1

21K delayed reported buy come through, now sitting in the sell column but its a buy at 13.88.

Small for causing a tick up, which might point to a lack of spare stock at the moment, I hope so, might get some decent moves upwards then into the results due June time.

Steady and strong waiting for the results :) Due early June I think.

Interesting post from another board :

Stewpot2 - 16 May'06 - 17:21

In answer to the query about manpower, the vacancies section in the British Dental Journal was always about 3-4 pages full, and getting an associate dentist was a nightmare. Recently, there is roughly one page of vacancies and they are not reappearing in the next issue. There is no shortage of dentists now for the first time in a generation. They are continuing to flood in from all parts of the world, attracted by the potential high earnings. The Polish contingent are particularly highly thought of. I think Oasis must be nearing full capacity.
Working for a corporate has its pluses and minuses, as has working for an independant dentist. However, there is a serious shortage of decent practices to buy, and both IDH and Oasis have started to agressively pursue those that are available. This will inevitably force prices up, again evidenced by the ads in the BDJ. Prices have virtually doubled in some instances in the last 18 months. Difficult to see any downside at present, and the grapevine tells me that they are about to make an announcement about a major development with a large PCT, which may have something to do with the recent volume.
Further down the road I can see this little cherry being swallowed by something much bigger!

Some good posts at AFN, so here is a summary of them :

irrationalexuberance - 15 May'06
If I may join this debate...last I heard, the big picture structural issue here was a lack of dentists, surgeries running at only 60%'ish capacity. Combination of acq'd dentists leaving after their 2 year earn-out and difficulty finding any to hire who speak english. All the brouhaha on new contracts, threatened strikes etc can't be helping on the hiring front. Plus general issue of whether you are better off in your own practice vs corporate structure. Anyone got any insight into the likelihood of filling this excess capacity? That seems to me to be the real potential upside to earnings.
ps can anyone recommend a good bulletin board to read the dentist chat on this stuff? thanks.

Stewpot2 - 16 May'06 - 17:21
In answer to the query about manpower, the vacancies section in the British Dental Journal was always about 3-4 pages full, and getting an associate dentist was a nightmare. Recently, there is roughly one page of vacancies and they are not reappearing in the next issue. There is no shortage of dentists now for the first time in a generation. They are continuing to flood in from all parts of the world, attracted by the potential high earnings. The Polish contingent are particularly highly thought of. I think Oasis must be nearing full capacity.
Working for a corporate has its pluses and minuses, as has working for an independant dentist. However, there is a serious shortage of decent practices to buy, and both IDH and Oasis have started to agressively pursue those that are available. This will inevitably force prices up, again evidenced by the ads in the BDJ. Prices have virtually doubled in some instances in the last 18 months. Difficult to see any downside at present, and the grapevine tells me that they are about to make an announcement about a major development with a large PCT, which may have something to do with the recent volume.
Further down the road I can see this little cherry being swallowed by something much bigger!

muffinhead - 17 May'06 -
The associate % is the key issue. Positive profit margins/share will happen if associates sign new oasis contracts by end July. Associates on a 40% contract will translate into a 10% profit margin on gross turnover. That's to be expected from any average company. What multiple of earnings would you value such an increase in profitability? 20, 40

Stewpot2 - 18 May'06 -
Oasis has around 120 practices. The average turnover would be about 500,000 for each practice, some much larger. A 10% increase, or 50,000 per practice, would add 6 million to their bottom line. Agreed?

Stewpot2 - 20 May'06 -
I read the recent articles in Dentistry mag., and it appears that Oasis are taking a very tough stance over this issue. To quote one anon. dentist " despite pressure from the BDA and legal representation they are adamently refusing to even alter the basic clauses of concern, let alone the financial issues". "They do not seem to mind the idea of losing most of their dentists."
What does this tell you? It tells me that they are prepared to accept short term pain in return for long term gain, and that they are confident that they will replace the ones that walk, and I tend to agree with them. Equally, the ones that do walk may find it more difficult than they think as vacancies become less and less, particularly in the areas that they want to work in.

PapalPower - 21 May'06 -
I would take a number of items from this present situation, for the bullish side of things :

1/ Firstly, management that is not afraid of some short term pain for long term gain and increasing the value of the shareholders investments (funny but strikes and stuff nearly always lead to a rise in the SP owing to this)

2/ Secondly, by the very fact that dentists have not all just left, but the majority have signed up, it points to the contract being fair.

3/ By the very fact that those who have not signed, are figthing with Oasis to change aspects of the contract, and not just leaving, points to the fact they think the Oasis system works well, and want to earn their money by being part of it, however, they just want a bigger slice, so another vote of confidence coming from the very people trying to cause the upsets.

4/ The reversal on BB's from people saying sell to now saying buy (those "P"'d off dentists), a sign that they know these changes will make a big change to Oasis cash and profit generation, to the plus side, and as such, OSH is looking very undervalued moving forward.

5/ Another positive sign of the availabilty of dentists etc. is again the sign that those under Oasis not willing to sign presently, are concerned that the changes going on now make them feel Oasis could simply in the coming months replace them all, no longer a problem getting hold of people, the "hold back" factor of staff availability is now looking to be no longer a factor, which is probably also why OSH have chosen this timing to get the new contracts into effect.

I would stick with my 36 month estimates of 18 months ago, which now means in 18 months time I expect these to be well over 30p, and potentially over 40p :)

Well, its results day today, lets have a look at them and the outlook statements.

http://www.investegate.co.uk/Article.aspx?id=200605310701117995D

Oasis Healthcare PLC
31 May 2006

Preliminary Results for the year to 31 March 2006



"Marked upturn in financial performance
Like for like sales growth of 13%
Group EBAT growth of 80% to 2.4 million
Debt down by 2.5m - now reduced to 37.0m
EBITDA to debt multiple improves to 4.9 times from 6.5 times

Strategy delivering profitable growth
Clustering strategy continues to deliver benefits
Recruitment easier
All NHS-providing practices successfully transitioned to new fixed income contracts
Refurbishment & development of 36 surgeries
Performance related incentives in place
Investment in dentist training reaping rewards

A growing and better quality estate for 2006/7
A stable and highly operationally leveraged business
8 new practices with 5.2m of fixed NHS annual turnover (39 surgeries) now opened
Further negotiations for new practices underway
Growth financed from cash flow
New standard dentist contracts to commence in July
Group expanding into a growing market place

Current trading continues to be strong

Stephen Lambert, Chief Executive, said:
These are very good results. Our clear strategy has enabled us to stabilise and
to grow the business. We are now in a very strong position to take Oasis
forward. We are operating in an increasingly attractive and growing market place for dental corporates, where Oasis is positioned to develop both its NHS and private businesses. The current year has started very well, including the award of a 0.5m contract to develop a new practice in Chepstow. We look forward to reporting continued progress."

PP,

Agree a growing market with lots of opportunity but only real concern is the large debt (37m), which will take them a fair few years to clear, particularly if paying off 2.5 - 3m a year.

silvermede, the should reach a point soon where paying of the debt becomes very simple. We should see good increases in turnover and cash generation this year and next, and generating so much cash, and in increased amounts, is going to then make paying it off a simple matter. Thats the plan.

Nice to see some people have digested the results and seen the opportunity, a nice end of day rise there, and should be some more to come as well.

Here is the latest (today) update from http://www.armshare.com

"
The final results to March 2006 showed sales of 82.5 million (2005: 74.9 million), operating profit of 2.4 million (2005: (384,000)), pre-tax loss of 366,000 (2005: (2.9 million)) and adjusted EPS of 3.36p (1005: 1.78p). The company reported that the growth was achieved from 122 practices (2005: 125); practice EBITDA was 10.9 million (2005: 9.1 million) representing 13.2% of sales (2005: 12.1%) - there are a number of practices, particularly within Greater London, which are achieving under 10% (compared with the target of 15%) and for which strategies are being formulated to deliver improved performance over the current financial year; capex was 4.2 million, of which 1.2 million related to 8 new Welsh practices and 2.9 million was on modernising 36 surgeries; debt was reduced to 37.0 million (2005: 39.5 million); working with Kodak, a new clinical IT system is being developed which will, for example, enable the viewing of patient records by both the referring dentist and the relevant specialist, irrespective of geography.

Research Standing

We said " With the heady days of expansion over, at least for the moment, its going to be a long course of treatment, as exertion of buying muscle and the drive for private patients opens a long road towards the necessary levels of returns. It hasn't been pain free yet, but when the current cavity is filled it may well be time for the healing process to begin."

The company broker's note dated 31st May projects fully taxed adjusted EPS of 3.3p for 2006/7, 4.1p for 2007/8 and 4.9p for 2008/9 representing P/Es of 4.5, 3.6 and 3.0 respectively based on the share price of 14.75p at 31st May.

COMPANY MEETING

ArmShare met the current CEO on 1st December 2005. Oasis has followed the well trodden buy and build strategy, and reached the stage where conventional business skills needed to be applied if the organisation was to deliver shareholder value. In 2004, the CEO who implemented the initial strategy left and his replacement (who joined in August 2004) brought in-depth experience of running retail multi-site operations. This lead to the implementation of the cluster infrastructure referred to above - the early signs are that this is producing a virtuous circle of being more attractive to dentists, providing a better service to clients, organic sales growth and better margins - these early signs were endorsed by the final results to March 2006. Continuation of the virtuous circle will make it quite straightforward for the company to handle what presently looks like excessive borrowings totalling 37 million at March 2006 (2005: 39.5 million). "

L2 3 v 1 @14/16.5

Up again, looks like more people like the results after digesting them :)

To go with this "The company broker's note dated 31st May projects fully taxed adjusted EPS of 3.3p for 2006/7, 4.1p for 2007/8 and 4.9p for 2008/9 representing P/Es of 4.5, 3.6 and 3.0 respectively based on the share price of 14.75p at 31st May." one should also not forget that IFRS reporting comes into effect for Oasis now, and that makes a very big difference to books, in terms of Goodwill etc...

With the kind of growth forecast, with the kind of earnings and cash being generated, and now with IFRS accounting which will make the books much more healthy, should Oasis be on such low earnings multiples ??? I think not

Up again, L2 is 2 v 1 @15/17