Smiles Inclusive final results show net loss far worse than initial results

Listed dental group Smiles Inclusive has revealed a sharply higher financial loss than the $18.9 million it flagged in preliminary results for the financial year.

Smiles Inclusive has released its audited financials. Photo: iStock

LISTED dental group Smiles Inclusive has revealed a sharply higher financial loss than the $18.9 million it flagged in preliminary results for the financial year.

The group’s audited results, released to the market before it before it opened yesterday, revealed a $31 million net loss, a 525.7 per cent higher loss than the $4.96 million the previous year.

Smiles revised its impairments for the year from $13.7 million to $23.96 million, and recognised another $1.99 million in deferred tax assets, contributing to the increased loss.

Shares in the company plunged eight per cent from 5c to 4.6c in the wake of the final results — below the price of 5c offered in a capital raising in which Smiles hopes to raise $3.3 million.

The company had flagged a full-year loss of “at least $4 million” in May, off the back of a previous profit downgrade from $2.3 million profit to a loss of up to $1 million.

The latest equity raising follows an earlier share issue that raised $1.2 million in June.

The group did not provide a profit guidance for the current financial year, as it “expects there to be some volatility over the coming 12 months”.

It said it was “in the initial stages of its turnaround plan and although there are early signs of improvements — management accounts for July 2019 showed a small return to EBITDA — a significant amount of work needs to be completed to restore the respect of the Groups Joint Venture Partners, shareholders and other stakeholders”.

Smiles Inclusive chairman David Usasz.

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Among those critical parties are joint venture partners Arthur Walsh and Joe Camacho, who described the final results as Smiles “thumbing its nose at ASX, ASIC and its shareholders”. “Smiles loss for the FY19 year has now, in the space of only 2 business days, ballooned to $31m,’ Dr Walsh said in a statement.

“Where is the $31m loss number stated anywhere in Smiles rights issue documentation issued on Friday?”

The pair sent a nine-page open letter to the ASX requesting Smiles redraft its investor presentation before it is dispatched to shareholders, saying it was “flawed and misleading”.

Smiles has been bombarded by criticism from joint venture partners and others, including two Sydney entrepreneurs who this week threatened to wind up the struggling company.