Smiles Inclusive: Gold Coast dental roll-up struggles with debt as shares drop to all-time low

Shares in embattled Gold Coast dental group Smiles Inclusive have recovered some ground today after falling to a 52-week low.

Smiles shareholders have seen the stock price plummet since listing.

SHARES in embattled Gold Coast dental group Smiles Inclusive have recovered some ground today after falling to a 52-week low yesterday.

The stock ended yesterday at 7.9¢ after falling to as low as 7.6¢ in intraday trading.
Smiles’ stock, which has recovered slightly to 9¢ today after climbing 13.9 per cent, is now worth less than 10 per cent of the $1 listing price last year.

The market capitalisation is now $5.99 million, a fraction of the $60 million value it achieved shortly after listing.

Founding Smiles CEO Mike Timoney left the company after poor first-half results. Picture: Annette Dew

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The company is expected to report its full-year results by the end of the month. It has flagged a full-year loss of at least $4 million.

Crucial to that result will be an update on its debt obligations.

Smiles updated the market at the end of July stating its main lender National Australia Bank had agreed to extend its facilities until November. That came after Smiles reduced its acquisition facility from $30 million to $14.708 million, which was the amount withdrawn.

Another short-term loan from NAB in April was expected to be repaid through a second capital raise following a $1.2 million capital raising in June.

Smiles Inclusive’s shareholders have seen the value of the stock plummet to a new low. Photo: iStock

In a letter to joint venture partners last month, CEO Tony McCormack said Macquarie Bank had suspended use of the leasing/equipment facility “pending demonstration that the turnaround initiatives are producing the desired cashflow and profit results”.

“We anticipate re-engagement with Macquarie in August,” Mr McCormack said.

Last month’s quarterly cashflow report listed $19.608 million drawn on its loan facilities. That includes the NAB facility of $14.708 million. There was also working capital of $4 million and third party loans totalling $900,000.

Other loans include a $2 million facility for day-to-day operations with $477,000 drawn and the equipment or leasing facility of $3.952 million, which has been drawn down in full.

The average interest rate for the facilities is 4.92 per cent.