Smiles boardroom battle continues as latest financial figures for the Gold Coast dental roll-up disputed by shareholders

The company says rebel shareholders who claim the company is hiding the true extent of its losses are “hellbent” on undermining the company as it seeks to implement its turnaround strategy.

Smiles Inclusive‘s boardroom saga has been like pulling teeth. Photo: iStock

SMILES says rebel shareholders who claim the company is hiding the true extent of its losses are “hellbent” on undermining the Gold Coast dental roll-up as it seeks to implement its turnaround strategy.

Smiles on Wednesday released its report for the financial year’s final quarter, showing cash receipts from customers up 8 per cent to $12.247 million, $927,000 more than the previous period and expenses down by $446,000 to $12.784 million. The overall net cash position is a loss of $537,000 and $7.1 million for the year.

The company said the improved quarterly results were due to higher revenue and reduced debt. However, shareholders and dentists Dr John Camacho and Dr Arthur Walsh said the figures failed to provide an accurate picture of the dental roll-up’s finances.

Dr John Camacho says Smiles management is hiding the true state of its finances.

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“Based on the report we estimate Smiles lost around $2.5 million in the quarter to June alone,” Dr Camacho said. “That would bring trading losses for the year to in excess of $6 million. Compare that with the company’s current guidance of a $4 million loss issued just two months from the year end. Given Smiles’ fragile position continuous disclosure is critical for shareholders and dentists alike.”

Smiles CEO Tony McCormack responded that the pair “seem hellbent on doing everything possible” to undermine the company’s turnaround strategy.

Mr McCormack said the company has repeatedly requested meetings with Dr Walsh and Dr Camacho but been turned down. “Cash inflows improved in the most recent quarter and have continued to improve in July.”

Smiles has flagged a full-year loss of at least $4 million. Photo: iStock

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The quarterly report outlines the turnaround strategy initiated by Mr McCormack in March.

Smiles said it has initiated a flat management structure, replaced management, cut support office staff in half (saving $1.5 million) and the established a nine-strong call centre to bring back lapsed patients.

Smiles said the call centre represents an “immediate opportunity” to improve revenue.

“It has initially concentrated on incomplete treatment plans but is now focused on reactivation and appointment booking for the substantial number of past patients not seen in the last 18 months.”

It said in many instances practices were failing to rebook patients were additional appointments.

Smiles Inclusive shareholders Jonathan Hamilton and Dr Jade Sun, pictured with their son William Hamilton, have lost a substantial amount of money due to the problems at the dental roll-up. Picture: Mark Stewart

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Smiles had cash in the bank of $1.595 million and had reduced its NAB facility for acquisitions from $30 million to $14.708 million.

In addition NAB, the company’s main financier, had agreed to extend the facility arrangement until November.

In another boost for the company, Smiles said it is negotiating to resolve litigation relating to a mobile dental van business from northwest Sydney that illegally X-rayed children.

Shares closed yesterday down half-a-cent to 11¢.