1300 Smiles Limited is back on an acquisitive trail

Dental business aggregator and widely fancied small-cap growth stock 1300 Smiles Limited (ASX: ONT) announced deals to acquire two new dentists in New South Wales today.

According to 1300 Smiles the combined practices produce revenues of more than $2 million and will make an “immediate positive contribution to net profit, EBITDA and earnings per share.

The founder-led Queensland-focused group delivered a flat set of numbers for the six-month period ending December 31 2016, but remains debt free and with an impressive long-term track record.

Dividends for example have more than tripled since 2007 and the company remains conservatively managed with a focus on the long term. The group’s growth strategy remains around competitive pricing and operating efficiencies helping to drive new clients to its dentists, while maintaining profit margins. Acquisitive growth also remains a core driver of its future earnings potential.

Other listed businesses in the dental space include SDI Limited (ASX: SDI) and Pacific Smiles Group Ltd (ASX: PSQ), both of which have arguably inferior track records to 1300 Smiles as listed businesses.

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Motley Fool contributor Tom Richardson has no position in any stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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