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Edited Transcript of PSQ.AX earnings conference call or presentation 20-Feb-20 12:01am GMT

Half Year 2020 Pacific Smiles Group Ltd Earnings Call

Mar 20, 2020 (Thomson StreetEvents) -- Edited Transcript of Pacific Smiles Group Ltd earnings conference call or presentation Thursday, February 20, 2020 at 12:01:00am GMT

TEXT version of Transcript

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Corporate Participants

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* Allanna Ryan

Pacific Smiles Group Limited - CFO

* Philip McKenzie

Pacific Smiles Group Limited - Chief Executive, MD & Director

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Conference Call Participants

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* James Bales

Morgan Stanley, Research Division - Equity Analyst

* Shane A. Storey

Wilsons Advisory and Stockbroking Limited, Research Division - Senior Analyst

* Tanushree Jain

Bell Potter Securities Limited, Research Division - Healthcare and Biotech Analyst

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Presentation

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Operator [1]

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Ladies and gentlemen, thank you for standing by, and welcome to the Pacific Smiles Group Limited Interim Results Briefing. (Operator Instructions) I must advise you that today's conference is being recorded.

I would now like to hand the conference over to your first speaker today, Managing Director and CEO of Pacific Smiles, Phil McKenzie. Thank you. Please go ahead.

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Philip McKenzie, Pacific Smiles Group Limited - Chief Executive, MD & Director [2]

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Good morning, everyone, and thank you for joining us for the Pacific Smiles half year results presentation. I'm Phil McKenzie, the CEO and Managing Director. And with me is Allanna Ryan, Chief Financial Officer. We will be taking you through the presentation that we posted on the ASX earlier this morning.

I'm again delighted to have the opportunity to update you and can report definitively that across the group, Pacific Smiles is thriving. Many of our wins in the past 6 months have been around doing the basics better and setting up our talented employees for success. The results being driven by our newly appointed state leaders is a really great example of this. The combination of our -- of all our efforts has resulted in an adjusted EBITDA growth of 15% for the half, the highest growth rate for any 6-month fiscal period since the listing in 2014.

Our loyal dentists remain crucial to our success with almost 600 dentists choosing to practice with Pacific Smiles. We're pleased to have increased our dentist development programs and to have again taken in record numbers of new graduates in FY '20.

It is notable that while a number of communities that we operate in have been severely affected by bushfires, we are proud that our people in these communities have worked together to continue services in extraordinary circumstances, and we'll continue to support those in most need as these communities rebuild.

Now on to the presentation. I'll start by summarizing the highlights of our results for the 6 months to 31st December 2019. I'll then provide a business overview and update before Allanna discusses our financial results in more detail. We'll finish today by reviewing our growth plans and outlook. And of course, we'll be happy to take questions at the end of the presentation.

Let's move now to Slide 5, which lists the key financial highlights for the 6 months to 31st December 2019. The key features of the results are as follows. Patient fees across the Pacific Smiles Dental Centre network of $105.4 million, which is up 14.5% on the prior half year. The same set of patient fees grew 9.4% for the half year, a great result and well above the industry growth rate. EBITDA underlying of $12.9 million was up 15% on the prior half's results. Underlying EBITDA to patient fees margin of 12.2% unchanged. Full year underlying NPAT was $5 million, up 11.2% on the prior half's result. And we've declared an interim dividend of $0.024 per share fully franked. The interim dividend for the prior half $0.023 per share. All in all, a set of results we're very happy with and believe we can build further on this base.

Now turning to Slide 6 to briefly recap on the operational highlights for the half year. We have added 4 new centers, growing our network of dental centers to a total of 93. Most new centers now contain 3 commissioned chairs with a capacity for 2 more surgeries in the future as patient demand grows. We've ended the half with 569 dentists, representing growth of 11% on the prior year. And we have 1,305 employees as we continue to scale up the organization on the back of continued rollout of new dental centers.

Our commitment to education deepens as our partnership with Sydney University moves to having students servicing patients at the Parramatta Pacific Smiles Dental Centre under the direct supervision of their university mentors. We have made available 5 surgeries that can be utilized as a teaching facility, thus enabling students to gain valuable experience in private practice prior to graduating. This partnership is exciting and completely aligns with our focus on growing our service offering to dentists.

We've again taken in a record number of graduate dentists, and we'll support them with our bespoke graduate development program. This program includes an internal mentor program where our more experienced dentists play a big role in developing future talent.

Our people are our lifeblood at PSQ, and staff retention is crucial. It strengthens our team, improves morale, drives the right behaviors and creates an overall stable business. We're pleased to report our staff retention rate is currently greater than 80%, and we plan to continue to improve this further.

The continued focus on driving a superior patient experience was reflected in the Net Promoter Score remaining above 80. We are very proud of our consistent high Net Promoter Scores across the group, and we work studiously so that we guide improvement in this measure with the opening of 4 new centers and commissioned surgeries. The provision of a perfect patient experience for each patient at every attendance at Pacific Smiles is our cornerstone. Our ongoing emphasis on supporting dentist development and graduate training is a testament to this priority.

Turning now to Slide 7. The 2 charts here provide a historical performance context from FY '09. In this period, we've grown the number of dental centers from 19 to 93 today with patient fees stepping up each and every year. The EBITDA graph shows a similar pattern of growth, reaching $12.9 million for the half year.

I'll now hand to Allanna to take you through the financials.

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Allanna Ryan, Pacific Smiles Group Limited - CFO [3]

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Thanks, Phil. Turning now to Slide 9. Slide 9 shows our summary income statement for the first half of FY '20 and the comparable period. The first half results are expressed on an underlying basis, which exclude one-off severance costs, the nonscheduled IT outage and some center relocation costs. In addition to -- additionally, underlying results also exclude the impact of AASB 16 leases.

The application of this new standard is not retrospective. Therefore, the half year results presentation is being prepared, excluding the impacts, to assist with comparability to the prior reporting period. The underlying results in the first half of FY '19 excluded one-off severance costs by comparison. We have provided a detailed reconciliation of underlying to statutory figures in the appendix.

We continue to see strong top line growth with underlying revenue up 14.2% to $68.3 million. Revenues are primarily derived from fees charged to dentists for the provision of fully serviced dental facilities. The dentists practicing in our centers generated a total of $105.4 million in patient fees in the half, which was up 14.5% on the prior period. Strong growth across all our cohorts saw same-center patient fees grow 9.4% in the period as centers commissioned new surgeries and maximized utilization. This is up on the 9% growth rate in the first half of FY '19.

Underlying EBITDA grew 15% to $12.9 million with the underlying EBITDA to patient fee margin remaining unchanged in the half at 12.2%. The key drivers were strong patient fee growth across all cohorts driven by an increase in the average fee per appointment and efficiency initiatives particularly the same centers as they ramp to maturity. The centers we opened in FY '19 performed above expectations, contributing positively in the half. The strong operating performance resulted in the underlying NPAT increasing by 11.2% to $5 million even after the high depreciation costs associated with the rollout strategy of new centers.

I will now turn to Slide 10. Slide 10 shows a breakdown of the key drivers of EBITDA growth in the half. As shown, the same centers contributed an additional $3.1 million in the half compared to $1.3 million in the prior period. The half saw strong volume growth and higher average fees per appointment. The FY '19 new centers performed above expectations, having a positive contribution.

During the half, 4 new centers were opened, which reduced EBITDA by $0.2 million. Our growth strategy is based on organic rollout of new dental centers and, in the past years, has had a net dilutive impact on the margin in the short term. It is important to note that the EBITDA contribution is also impacted by the timing of the individual center openings as they move from losses to profit over the first 12 months of operation. Field support costs increased due to additional positions to support the growth network (sic) [growth of the network].

Turning now to Slide 11. Slide 11 shows a breakdown of the key drivers of the EBITDA margin. As mentioned earlier, the EBITDA to patient fee margin remained unchanged at 12.2% for the half. Same-center margins expanded by 140 basis points, reflecting strong patient fee growth, efficiencies achieved through higher chair utilization and margin expansion as centers ramped to maturity and leverage the fixed cost base. The center mix effect is driven by an increasing proportion of fees coming from centers opened in the last 3 years, which generate lower margins than mature centers.

Centers opened from 2011 to 2018 grew to 50% of same-center patient fees in the half from 45% in the first half of FY '19. Our acceleration of the rollout of new dental centers in the past few years has a net dilutive impact on the margin in the short term.

Corporate costs increased 60 basis points as we continue to support the growth of the business. 40 basis points of this increase is due to year-on-year increase in performance-based bonus accruals. In the first half of FY '19, executive bonus accruals were nil due to underperformance against internal targets.

Turning now to Slide 12. Statutory operating cash flow was $12 million compared to the prior corresponding period of $8.2 million. It was impacted by the strong EBITDA performance and a favorable working capital movement compared to the prior half, which was influenced by the timing of trade creditor payments between the 2 periods. Cash conversion remained strong at 124% for the period. As a reminder, we define cash conversion as operating cash flow, excluding financing and tax, divided by statutory EBITDA but excluding the AASB 16 impact. Capital expenditure was $6.9 million for the half, of which $3.7 million related to expenditure on new centers.

In addition, we incurred $0.6 million of capital expenditure to relocate our Salamander Bay dental center. Other key areas of expenditure included 13 additional surgeries in existing centers, the bulk purchase of dental chairs, equipment replacements, IT systems and an automated infection control system.

The Board has declared a fully franked interim dividend of $0.024 per share, which is payable in April.

The balance sheet reflects a well-funded position. We expect to be able to continue to fund our growth plans from strong operating cash flows and small debt drawdowns after allowing for a dividend payout ratio of 70% to 100% of NPAT.

Property, plant and equipment increased, reflecting the investment in new centers. Likewise, borrowings increased to fund these centers.

It is important to note that the impact of AASB 16 leases is excluded from the presented balance sheet but is included in the appendix to the presentation.

I will now hand back over to Phil to discuss the business overview and outlook.

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Philip McKenzie, Pacific Smiles Group Limited - Chief Executive, MD & Director [4]

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Thanks, Allanna. On Slide 14, I'll commence our business overview and update with our True Purpose facts. Our True Purpose is to improve the oral health of all Australians to world's best. This is the simple yet significant belief which all our people align to. Our collective driving commitment to superior service and authentic care creates an exceptional patient experience.

Our True Purpose facts are impressive. We remain the major sponsor of 3 key programs of the Australian Dental Health Foundation, an important charity that facilitates the provision of free dental services to those members of society least able to access dental care. Our staff and dentists respond positively to this initiative, and this is reflective -- reflected in their motivation and focus on patient care, a focus that has resulted in 80% of our patients surveyed scoring us a 9 or a 10 out of 10.

With 4 more convenient, high-quality dental centers opened during the half, there were approximately 420,000 appointments provided, and of that, 75,000 were new patients and over 22,000 were patients supported by government funding programs. It is important to note that many Australians attended dentist either sporadically or not at all. We believe there is a compelling opportunity to make a high-quality preventative dentistry more accessible, affordable and available for all Australians, and this guides our vision.

On Slide 15, our goal of 250 dental centers, 800 chairs and intended market share of not less than 5% remains unchanged. With our Why firmly established under our True Purpose, we’ve simplified our strategic priorities to 3 areas: network growth, culture and operational excellence. This refinement allows the whole Pacific Smiles team to easily identify what we're working on and how they contribute.

Under network growth, we'll continue to add new dental centers by selecting the right sites, engaging the best dentists and employing the finest staff with a focus of reducing the time to profitability. At the same time, we'll continually improve the operating performance of our existing centers by increasing the range of services, optimizing operating hours and commissioning existing surgeries, all while seeking efficiencies through technology and innovation.

Our focus on culture ensures our competitive advantage that talent is operating under a common framework, the Pacific Smiles Way, and I'll detail that further later in the presentation. This allows us to operate effectively and continue to expand with confidence that our people know how to best contribute to Pacific Smiles.

Operational excellence is fundamental to margin expansion. Patient supply/demand matching to optimize dentist productivity, IT fitness and capability, our ongoing cost review program, continuous process and system optimization and enabling patient choice with multiple payment options is all part of a better PSG. Our success is ultimately dependent upon delivering a perfect patient experience, which requires the attraction and retention of high-caliber dentists and employees with a high-quality care mindset. And it's all underpinned by efficient and effective operations. We will continue to build upon our success with an ongoing commitment to expansion and growth.

Slide 16 shows the link between our True Purpose, our Way and our How. Our True Purpose is the keystone of why we do what we do across Pacific Smiles. The way we do it is by adapting to whatever circumstance may be presented and unifying as one team always playing to win, making sure we give our best in everything we do.

We've now added a How in the form of 3 value propositions. For dentists, it is that they are respected and that they know we're there for them to enable their professional excellence. For Pacific Smiles team members, it's that they matter and that the work that they do does make a difference and we support it. And for our patients is that they can trust us collectively as the local experts. They are our priority, and we are there together for them and their families always.

Slide 17 details the opportunity growth from existing centers. Given our rollout rate at any time, given the significant proportion of our portfolio is immature. Currently, 31% of our centers are less than 3 years old. This assists us in achieving solid same-center growth rates. Our same-center patient fees growth has averaged 5.3% per annum over the 5 years to 30 June 2019. Our centers generally show sustained growth over multiple years and growth above our network average for 3 to 5 years or more.

The dental chairs in the new centers plus additional commissioned chairs in existing centers increased the total number of commissioned chairs of Pacific Smiles to 373, representing a 16.6% growth. Currently, 83% of our available surgeries are commissioned, and we have further 75 chairs to commission to meet the future demand as we continue to grow our market share.

Growth in existing centers is underpinned by marketing initiatives to attract new patients and by the delivery of a superior patient experience in center and between appointments to generate repeat attendance and positive word of mouth. Over time, the range of clinical services can be expanded by our engagement of more dentists and through the facility -- facilitation of training and development.

Turning now to Slide 18. We constantly learn and hone every element of our successful formula for dental center rollout. The selection of shopping centers, the identification of preferred tenancy locations, excellence and design, quality construction, recruitment and team building, preopening marketing, patient care and customer service, it is all subject to continuous review and quality improvement. As patient demand builds and the clinical services are expanded, additional surgeries can be activated with model -- modest additional capital expenditure, and hours of operation can be extended.

On Slide 19, we provide data on new center economics. We show the average performance of centers opened from July 2014 to June 2018 in their first 3 years as well as the median performance of all centers opened for more than 5 years as of the 30th of June 2019.

New centers typically make a loss in their first year of operation. Group profitability is impacted by the year 1 losses of each cohort of new centers. However, as shown on the table on this slide, centers typically make a positive contribution in year 2 and achieve a center EBITDA to patient fees margin of 10%. Group medians for all centers opened for more than 5 years show that a typical center generates approximately $2.5 million in patient fees and around $0.5 million in EBITDA for a center EBITDA to patient fees in excess of 20%. Our experiences at centers do take many years to reach maturity and continue to show margin expansion over an extended period of time.

Turning now to Slide 20. We outlined tactical areas of focus for the second half. We'll be continuing to foster efficiencies in same-center performance as well as guiding our new centers to profitability expediently. The rollout of new chairs and existing center is a core aspect of our same-center growth initiative. As we build utilization at the center through rebooking, our existing patients and attracting new patients through great local marketing, we will commission more new surgeries. We'll maintain a continued drive on operational standards and work with dentists to refine the services to maximize performance.

In our opinion, digital scanners are a critical facet of the future of high-quality dental care. And we'll be working with our dentists and supply partners to intelligently roll scanners out across the Pacific Smiles group to optimize the dentist services and enhance the patient experience.

I've noted our graduate dentist intake for FY '20 and the second half sees the programs and facilitation of their development continue. Our annual Inspire Conference is in the fourth year, and we have an exceptional program of educators and partners and practitioners to deliver a tremendous experience for those attending. Our Dental Advisory Committee remains our Practice Excellence form and is the mechanism by which we ensure we maintain the highest possible practice standards across the group.

Slide 21 details our intention with Smiles care center trials. This concept is intended as a fresh way for us to engage with potential patients. It is, in essence, a lead generation vehicle for our core dental centers. With the change in scope of practice for oral health therapies, we believe there's now an opportunity professionally to cater to patient education and general understanding of the dental health options available to them.

The hub-and-spoke model will allow a small flexible experience space for new potential patient groups to connect with Pacific Smiles prior to visiting our dental center. This model will allow innovative design and the use of technology and versatile service offerings, and we're seeking to develop our patient base in this new format and continue to build the complete dental care experience. We will refine the Smiles care model on the back of these trials and assess further rollout opportunities.

Slide 22 highlights the relationship with The University of Sydney, which is the Pacific Smiles' dental teaching clinic for The University of Sydney students. The majority of dentistry in Australia is provided in the private medical health arena. Currently at The University of Sydney, the entirety of the Doctor of Medicine course is embedded within the public health environment. In order to offer an enhanced student learning experience and preparedness for private practice, The University of Sydney is pursuing an opportunity for a model of dental education, embedding dental students within one large private dental center; in this case, our Pacific Smiles Dental Parramatta center. This model involves dental students in their final years of study providing dental services to private patients. Dental students will provide care under the direct supervision from qualified dental practitioners who are clinical educators at The University of Sydney. Students participating in the program will attend the PSD Parramatta center for 8-week rotations with our practice keeping with private practice protocols.

The University of Sydney Dental School has been providing education and training in dentistry and oral health for over 100 years, and we very much look forward to working with them to enhance the capabilities of the next generation of dental practitioners serving the oral health needs of Australians.

Now turning to the outlook on Slide 23. Pacific Smiles provides the following revised guidance for FY '20 excluding the impacts of AASB 16. Following the performance in the half, Pacific Smiles increases its underlying EBITDA growth for FY 2020 to 11% to 15% on FY 2019 from the previous outlook of 8% to 14%. The following elements of outlook remain unchanged: same-center patient fees in the high single digit, and we're tracking at 9.1% year-to-date up until 15 February 2020; opening of 7 to 10 new dental centers in FY 2020 with 4 centers opened in the first half and 2 sites committed for the second half of 2020; dividend payout ratio within the policy range of 70% to 100% of NPAT for FY 2020.

In closing, on behalf of the executive leadership team, I want to say thank you to all the Pacific Smiles teams. Whether they're the field base leaders, the dedicated folks in our center operations or those equally dedicated people working in our support center, your efforts and energy is incredibly important and very much appreciated. At the same time, to the dentists who practice at Pacific Smiles, I'd like to say thank you. The trust and respect they give us by choosing to operate their practice in our network drives our commitment to growth and the delivery of our True Purpose.

As I conclude, an announcement in October 2019 advised of Pacific Smiles Chairperson succession. Bob Cameron, who has overseen the growth and the success of the company as a Chairperson for the last 17 years, retired from the Board on the 19th of February. Zita Peach has assumed the role of Chair. On behalf of the whole Pacific Smiles family, thanks, Bob, for your many years of outstanding service, and a very warm welcome to Zita, whom we all know well from her involvement on the Board as an NED.

I'd now like to hand the call back to Edwin, our operator, to take any of your questions.

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Questions and Answers

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Operator [1]

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(Operator Instructions) Your first question comes from Shane Storey from Wilsons.

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Shane A. Storey, Wilsons Advisory and Stockbroking Limited, Research Division - Senior Analyst [2]

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(technical difficulty)

and by looking at what the new guidance says about the second half. I mean the top end there sort of implies another 15% EBITDA growth over the second half comp. Are you expecting to make any investments in the second half that might hold that second half earnings back in any way given that it just doesn't seem to have any problem with top line growth at the moment?

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Philip McKenzie, Pacific Smiles Group Limited - Chief Executive, MD & Director [3]

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Look, we don't have any extraordinary investment plan that we haven't already telegraphed through the various other meetings. No, we obviously have a very positive first half, and that was underpinned by a very strong first quarter, which certainly normalized in the second quarter. And we've got no intention to deviate from the past. And we're quite delighted to give a rise as indicated.

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Shane A. Storey, Wilsons Advisory and Stockbroking Limited, Research Division - Senior Analyst [4]

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Okay. So you felt that the margins may be a touch strong in the first quarter versus the second?

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Philip McKenzie, Pacific Smiles Group Limited - Chief Executive, MD & Director [5]

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Look, we just had an excellent first quarter, as I signaled at the AGM, that we were very pleased with, and we've seen an excellent first full half. But we don't see any anomalies or anything in the second half or any particular investments that we'd call out separately at this point.

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Shane A. Storey, Wilsons Advisory and Stockbroking Limited, Research Division - Senior Analyst [6]

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Okay. The second question I had was, am I right in thinking that you may have backed away from one of the second half center openings you mentioned at the AGM? And as a follow-up, it could seem that -- should we be modeling a few less centers this year, say, compared to the 10 that Pac Smiles opened in '19?

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Philip McKenzie, Pacific Smiles Group Limited - Chief Executive, MD & Director [7]

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I think it's really fair to say that we will consider every investment carefully. I think it's beholden on us with the investment of capital to be particularly thoughtful. I wouldn't infer anything in the guidance. We've got that range of 7 to 10. We've got at least a couple committed for the second half. And we're not trying to signal anything here other than continuous commitment to being prudent with CapEx investment.

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Shane A. Storey, Wilsons Advisory and Stockbroking Limited, Research Division - Senior Analyst [8]

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The last question I had was just to get some guidance on sort of how we should think about the new chair commissioning activity that we might see in the second half of '20.

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Philip McKenzie, Pacific Smiles Group Limited - Chief Executive, MD & Director [9]

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Yes, with the quality caliber of marketing that we've got coming through to our existing patient base and the commitment to continually attracting new patients, when we achieve certain utilization criteria that triggers a commissioning of a new chair within a center, we're very focused on that with regard to our same-center performance. And we've got a clear plan for what we want to do in the second half. I think we flagged that we're 13 chairs in the first half. And I would suggest that we'll keep the same rigor and focus in the second half.

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Operator [10]

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Your next question comes from James Bales from Morgan Stanley.

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James Bales, Morgan Stanley, Research Division - Equity Analyst [11]

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I guess I wanted to understand the guidance a little more and follow up on some of those points just raised. So does the rollout impact the margin performance in your guidance? That is, if you do open 10 store -- 10 centers this year, is 15% EBITDA guidance still achievable?

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Philip McKenzie, Pacific Smiles Group Limited - Chief Executive, MD & Director [12]

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I think the reason we provide the range the way we do is, yes, if we plan for -- to do things, and that's why we provide the range the way that we do. Obviously, in any climate with any team, we've got to be really sensible about how we’re pushing that capital and make sure that we're making the right decisions in the right place. Given that there is a drag that's created by commissioning a new center, you might infer that there's some benefit for not opening centers. But that's not our focus at all. We're very focused on opening the right centers in the right place. And that 7 to 10 guidance is certainly something that we're focused on.

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James Bales, Morgan Stanley, Research Division - Equity Analyst [13]

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And so I guess that feeds into understanding what we should be baking in for the cost base into the second half. Historically, it hasn't stepped up dramatically like a couple of million bucks versus the first half in each of the last couple of years. Should we be thinking about similar sort of quantum there?

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Allanna Ryan, Pacific Smiles Group Limited - CFO [14]

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No, James, I wouldn't be looking at it from a cost base increase. We did call out and we referred to on our cost review program, and that's continuing. So we see cost continuing in the similar level.

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Philip McKenzie, Pacific Smiles Group Limited - Chief Executive, MD & Director [15]

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Yes.

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James Bales, Morgan Stanley, Research Division - Equity Analyst [16]

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Yes. Cool. Okay. And then you guys didn't call out a full year CapEx number. What should we be thinking on that front?

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Allanna Ryan, Pacific Smiles Group Limited - CFO [17]

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We'll be looking at something very similar to last year. So that would be the best estimate to run with.

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James Bales, Morgan Stanley, Research Division - Equity Analyst [18]

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Right. And then the maturation profile, you sort of have talked about that marketing effort and sort of really driving that sort of -- down that lead time to profitability. Can you talk to any metrics for that success you've had on that front?

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Philip McKenzie, Pacific Smiles Group Limited - Chief Executive, MD & Director [19]

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Yes. We've talked, I think, at the full year for last year that we've moved a couple of centers, notably Keysborough and Aspley, to profitably inside that 12-month time frame. We've got FY '19 centers -- we moved 5 of those centers to profitability inside the 12-month time period. So that dedicated focus at the operational level but also the timing of opening centers is working according to plan.

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Allanna Ryan, Pacific Smiles Group Limited - CFO [20]

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And James, you'll see that in the EBITDA bridge that the contribution from those FY '19 centers had a positive contribution in the half. And that's reflective of that move to profitability quicker.

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Operator [21]

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Your next question comes from Tanushree Jain from Bell Potter Securities.

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Tanushree Jain, Bell Potter Securities Limited, Research Division - Healthcare and Biotech Analyst [22]

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Phil and Allanna, congratulations on a great result. Just a couple for me. Allanna, this one is more for you. You mentioned that the increase in corporate cost as a percentage of patient fees, 40 basis points of that was due to the year-on-year increase in performance-based bonus accrual. How should we look at that for the second half and going forward?

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Allanna Ryan, Pacific Smiles Group Limited - CFO [23]

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Yes. Thanks, Tanu. What we've called out there is in the first half of FY '19, we did not provide for any executive bonuses because the metrics weren't met, whereas this year, we have. So the expectation would be continued strong performance should deliver on those bonus – well, I would expect to see them as a dollar percent -- as a dollar amount increasing. As a percentage point, it probably will -- it will remain unchanged, but then from a dollar perspective, it will go up.

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Tanushree Jain, Bell Potter Securities Limited, Research Division - Healthcare and Biotech Analyst [24]

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Right. And -- great. Just on the -- just the sales comment around the FY 2019 centers as well performing above expectations. Do you expect that to flow in, in second half as well?

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Philip McKenzie, Pacific Smiles Group Limited - Chief Executive, MD & Director [25]

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Yes, I think that's a fair assessment, Tanu. That's the intent -- that's the modus of the business now. And we'd like to believe that we can continue to deliver at that rate.

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Tanushree Jain, Bell Potter Securities Limited, Research Division - Healthcare and Biotech Analyst [26]

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All right. And then just on your current market share. Can you give me some idea around where you sit at the moment?

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Philip McKenzie, Pacific Smiles Group Limited - Chief Executive, MD & Director [27]

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I think the IBISWorld report would have us at approximately 2% share. And we're certainly very focused on the drive to at least 800 chairs to make sure that we can service more of the available communities. So we're very focused on our growth mode and being able to drive utilization across the current chair set that we've got and as we increase.

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Tanushree Jain, Bell Potter Securities Limited, Research Division - Healthcare and Biotech Analyst [28]

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Right. And then just on the 2 centers that you've committed to, do you have an idea on when we expect to have that open?

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Philip McKenzie, Pacific Smiles Group Limited - Chief Executive, MD & Director [29]

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We do. Typically, we don't disclose that at this time, but we've got a good plan in this. And there's always a number of centers in our rollout plan, Tanu. So we flag to -- we're not necessarily flagging the dates today, but we've got a considerable center pipeline that we're reviewing all the time with our various partners.

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Operator [30]

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(Operator Instructions) There are no further questions at this time. I'd now like to hand the conference back to Phil. Please continue.

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Philip McKenzie, Pacific Smiles Group Limited - Chief Executive, MD & Director [31]

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Sincerely, thank you, everybody, for joining today. As there are no further questions, I'd like to thank you for your time, and wish you all a great rest of your day. Bye-bye.

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Allanna Ryan, Pacific Smiles Group Limited - CFO [32]

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Thank you.

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Operator [33]

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Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may all disconnect.