Gold Coast dental group Smiles Inclusive responds to ASX queries on timing of its market updates

An under-siege Gold Coast dental group has been forced to defend the timing of its market updates after questions from the sharemarket operator.

UNDER-siege Gold Coast dental group Smiles Inclusive has been forced to defend the timing of its market updates after questions from the sharemarket operator.

Last week the company requested a trading halt after shares plunged 52 per cent in a single day to fall as low as 10¢.

It followed an FY19 earnings downgrade on February 28 from a net profit of $2.3 million to a loss of between $500,000 and $1 million.

The earnings guidance of $2.3 million net profit had been issued on November 21 last year.

Smiles Inclusive founder and managing director Mike Timoney has stood down from the company in the wake of a poor first-half result.

The ASX sent a series of questions to Smiles on Wednesday asking when it became aware of the earnings downgrade and, if it was before February 28, whether there were any prior announcements that disclosed information relevant to the downgrade.

In response, Smiles yesterday said the first it became aware of the earnings downgrade was after close of trade on February 28 when senior management met and finalised the accounts for the six months to December 31.

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Smiles said until recently it considered it could meet the original guidance through opportunities within the mobile dentistry practice. It also said there were opportunities within the South Australian operation through using government funding schemes.

The company said the revised guidance included the previously released quarterly cashflow report from January 31, which showed cashflow $500,000 below expectations, trading during February, which was also below expectations and other “unforeseen and uncertain” costs

The company listed last year under the leadership of CEO Mike Timoney after acquiring a portfolio of 52 practices under a partnership model with individual dentists who sold their clinics but remained investors in the business.

Mr Timoney has since stood down to be replaced by Tony McCormack.

Shares closed yesterday up 17 per cent, or 2.5c, at 16.5c.