Chairman sees long-term Vision Group model working well
The Age
Wednesday October 28, 2009
WHEN Vision Group floated five years ago, investors fell over themselves to get a bit of the action.It was a bit of a novelty for fund managers: a fast-expanding ophthalmology company with eye clinic practices stretching from Melbourne to Townsville.It was a story-and-a-half and those lucky enough to get stock in the float at $2.30 saw the scrip hit $5.Those were the glory days, but things have changed. This year, earnings fell and the shares fell to 41. But the stock has bounced off those lows and is now fetching $1.18.One question is whether the Vision model €” the harnessing of sometimes strong-willed doctors within a public company €” will work long-term.Chairman Shane Tanner clearly thinks so.Speaking at the annual meeting this week, he said that seven senior doctor partners had renewed their contracts early €śas a firm commitment to the business model and company", while other doctors had more recently recontracted.Nevertheless, there has not been complete harmony.Dr David Kitchen lasted nine months on the Vision board and now the company is taking legal action against him, stating that he wrongly terminated his contract.Kitchen practised in Rockhampton and Tanner told the annual meeting that €śthe incumbent doctor had taken most of the patients with him€ť.Shareholders were also treated to the slightly surreal spectacle of Vision's founder, Harry Unger, getting to his feet and asking whether €śDr Unger was lied to" when it came to discussions concerning his departure.Tanner told him that he (Unger) had agreed to the terms of his departure €śand I can't really answer it any more truthfully or clearly than that€ť.Craig Stamp, the third managing director since the float, has the job of improving the latest $12.6 million June-year earnings €” which is virtually what they were in 2006 despite a 49 per cent increase in revenue.He's got no doubt about the model, either. After the meeting he said: €śWe're making progress.€śIn the longer term there will be one or two doctors that the model doesn't work for and I think that's the nature of it."But there's also a long list of doctors that are interested in joining.€ťTanner said he was encouraged by a strong start to the current year, but there was uncertainty about the impact of changes to the cataract surgery rebate.Vision is now valued at $94 million, or slightly more than seven times historical earnings.
© 2009 The Age
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