Gold Coast dental group Smiles Inclusive pauses trading after stock falls more than 40 per cent

A listed Gold Coast company has paused trading on the ASX “pending a further announcement” after its shares dived more than 40 per cent.

The dental group has been undertaking a turnaround. Photo: iStock

GOLD Coast dental group Smiles Inclusive paused trading on the ASX “pending a further announcement” after its shares dropped more than 40 per cent and swiftly rose again and the exchange issued the company a price query.

Shares in the company dipped as low as 3.8c and as high as 5.6c today on volume of almost 1.4 million shares after closing yesterday at 6.4c.

They closed trade 20.31 per cent down today at 5.1c.

Smiles replied “no” to an ASX query into whether it had any information that could explain the recent trading of its securities.

It said it continued “to assess capital raising options”.

“However, the board is of the view that the proposals being considered would niot have material effect on the price or value of SIL’s securities,” Smiles told the ASX.

Earlier this week the company was forced to justify its ongoing listing on the Australian Stock Exchange after the bourse issued its second query in less than a fortnight and its third for the year to the struggling company.

The Burleigh-based group, which has faced multiple legal battles, challenges to its board make-up and repeated public attacks by current and former shareholders, is struggling with cash flow and reported an $18.9 million loss for the past financial year.

Fresh questions about the company’s financial position were raised last week after dentist commission payments were late.

Responding late on Wednesday to a query from the ASX issued on Monday, Smiles defended its unaudited full-year financial reports and said it remained capable of meeting its liabilities to staff and others.

Smiles Inclusive Chair David Usasz. (AAP Image/Richard Waugh)

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The ASX fired off nine questions asking for clarification of Smiles’ reported positive earnings for July; a breakdown of the company’s cash and cash equivalents; whether it had followed ongoing disclosure requirements; if it was considering further capital raising and whether an auditor had confirmed its reported writedowns of $13.7 million for the financial year.

The exchange also asked Smiles to explain why it should allow its listing to continue.

“The Company considers that its financial condition is sufficient to warrant continued listing on ASX,” Smiles responded.

“As a business in turnaround mode, the current cash flows are not reflective of management’s expected cash flows for the period leading to and following the time the turnaround is complete.

“As disclosed on several occasions, implementation of the turnaround plan is in its early stages, with performance improvements expected to be realised over the next 12 months.”

The company was issued an ASX query on September 5, in the wake of its poor financial result, asking it to explain why the expected impairments had not been disclosed to the market sooner.

In March, Smiles was forced to defend its disclosure practices when the ASX sent it a series of questions about an earnings downgrade which sent its stock tumbling and forced it into a trading halt.