+ Growing the number of dentists. 1H23, the company has grown the number of dentists by 40 to 320 currently. This expansion in headcount will support revenue in 2H23. The company has stopped expanding into new clinics since September 2022. The aim is to grow the number of dentists or chairs in the existing chain.
– Negative operating leverage. 1H23 operating expenses rose 3.7%, or S$2.1mn. Around 70% of the increase was higher employee expenses. Wages rose due to higher nurse wages and absence of a S$500k wage credit. Other increases were expansion-related fixed costs such as rental and depreciation. Q&M will suffer from negative operating leverage as fixed costs have elevated.