Staff costs at Gold Coast dental roll-up Smiles Inclusive soar 41pc in quarterly update

Staff costs have soared an eye-watering amount at embattled dental group Smiles Inclusive during the third quarter for one major reason.

Staff costs at Gold Coast dental roll-up Smiles Inclusive have soared.

STAFF costs soared 41 per cent at embattled Gold Coast dental group Smiles Inclusive during the third quarter, partly due to redundancy payouts.

A quarterly cashflow report issued yesterday afternoon shows staff costs of $5.32 million compared to $3.755 million for the previous quarter.

Smiles said previously that employees have been asked to accept reduced remuneration due to the current financial situation at the company, which is forecasting a loss of $4 million this financial year.

The company said third quarter customer receipts were $11.32 million for the three months to March 31.

Ousted Smiles Inclusive CEO Mike Timoney. Picture: Annette Dew

That was 7 per cent down or $800,000 below the previous quarter’s accounts, which were restated following an audit.

CEO Tony McCormack said “the turnaround plan is underway and the company is working with its senior lender on its turnaround plan implementation”.

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Smiles blamed factors associated with the “seasonality” of the post-Christmas period for the lower cashflow after previously also attributing lower second quarter cashflow to worse than expected trading over the Christmas/New Year period.

Cash outflows were 2 per cent higher at $12.9 million due to a reduction in working capital.

Smiles Inclusive is forecasting a loss of “at least $4 million” for FY19. Picture: iStock

The net cash outflow was $400,000 with cash in the bank falling from $1 million to $600,000.

The cashflow report comes as the former leadership, comprised of ousted CEO Mike Timoney and former chairman David Herlihy, compete with the current management of chair David Usasz and director Tracy Penn for control of the company at next month’s EGM.

The current Smiles leadership insists Mr Timoney and Mr Herlihy were dumped in the wake of poor performance.

The pair hit back, saying they were the victims of “renegade” directors who had resisted attempts to renew the board with executives with dental industry experience.