Smiles Inclusive: Gold Coast dental roll-up pays dentists late as cashflow issues bite

Fresh questions have been raised about the survival prospects of embattled Gold Coast dental roll-up Smiles Inclusive after dentist commission payments were late earlier this month.

Smiles JVPS say they were paid commission fees late earlier this month.

FRESH questions have been raised about the survival prospects of embattled Gold Coast dental roll-up Smiles Inclusive after dentist commission payments were late earlier this month.

The Burleigh-based company, 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 has flagged a second capital-raising round to pay a short-term loan from National Australia Bank.

The company reported an $18.8 million loss for the past financial year.

Dentists with service agreements with Smiles were due to be paid on September 9.

Smiles shareholders have seen the stock price plunge to as low as 6c. Photo: iStock

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However, a number did not receive the funds until the following day with some payments understood to be four days late.

A spokesman for Smiles declined to comment.

Dr Huma Syed, of Totally Smiles Dental in Warilla in NSW, said he had not been paid any share of the profits from his clinic for 15 months and survived on under $2000 in commission payments each month.

Dr Syed said he was one of the original joint-venture partners when the company listed in April last year.

Dr John Camacho has been highly critical of Smiles management. (AAP Image/Richard Waugh)

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He sold his clinic to Smiles and then reinvested $150,000 of the sale price into the business, entitling him to a share of the profits.

However, Dr Syed said the company had not delivered on its promises.

“They have not delivered what they promised since day one,” he said.

“It is an ongoing battle — every month we are struggling.

“It is like a slow death.”

Dr Syed said he had cut down on his working hours and one month was paid $10 after thousands in laboratory fees were deducted from his commission payment.

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“I am down to working three days a week from five because I have no patients,” he said. “Only a few months ago I got $10 as a wage because they had overdue bills to be paid.

“If I get the chance to buy it back I will.”

Dr Syed has filed a request to buy back the business from Smiles, however, under the terms of his agreement, Smiles has 12 months to make a decision.

A Smiles spokesman said: “Dr Sayed has been paid in full, in accordance with the terms of his agreement with Smiles Inclusive.”

Another dentist, who wished to remain anonymous, said she was also paid late.

She said she was told it was an administrative error by a Smiles director, however, she believed that was an unlikely explanation.

The JVP said she believed the company was close to collapse and had a slim chance of survival.

Dr John Camacho and Dr Arthur Walsh, who have been vocal in their criticism of Smiles management, said Smiles had run out of cash.

“The board can run but it cannot hide from its ASX disclosure obligations,” Dr Camacho said.

“Cash is king. A meeting of creditors is required in order to work through the mess.”

Graham Middleton, of dental practice valuer Synstrat, said a recovery was unlikely.

“On present indications Smiles, for which investors subscribed $1 per share at IPO and have recently traded at 6¢ per share, is struggling to survive,” Mr Middleton said.

“It is dependent upon the support of its bankers and its stated interest-bearing liabilities are $23.413 million.

“It may be considered to be hanging by a thread.”

Shares closed up 4.8 per cent yesterday at 6.5¢.