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- Dental company 1300SMILES (ONT) has felt the impact of COVID-19 on its operations and trading since late March
- The business now has only 50 per cent of its practices open, with most health practitioners and support staff stood down or taking leave
- 1300SMILES claims that it is well placed to weather the storm, but is exploring Government assistance programs
- The company has also implemented cost-cutting measures, such as waiving non-executive director salaries until September
- 1300SMILES’ share price is up a mere 0.2 per cent today, with shares trading for just under $5 each
Dental company 1300SMILES (ONT) has reported on the substantial impact of the COVID-19 pandemic on its operations and trading.
The business was trading well until the virus really started to hit Australia in late March. 1300SMILES’ Managing Director, Dr Daryl Holmes, said that prior to the outbreak of COVID-19, the company was doing quite nicely.
“The business was performing better than expected, with strong same-store sales growth in the March 2020 quarter,” he said.
Now, Government restrictions grow stricter with each passing day, in a bid to reduce the spread of the disease. As a result, companies everywhere are feeling the pinch.
1300SMILES currently has about 50 per cent of its practices open, at least on a part-time basis.
The company is observing level three restrictions, recommended by the Australian Dental Association, Dental Board of Australia, and Australian Health Protection Principle Committee. Level three recommends that the practices provide only urgent and emergency treatment.
Most of 1300SMILES’ health practitioners and support staff have been stood down, or are taking leave during this time.
“Our immediate priority is to protect the health of our patients and team members. We must also continue to serve the communities where we live and work, and play our part to help reduce the spread of this virus,” Daryl stated.
Financial pinch
As the reduction in trading impacts the company’s finances, 1300SMILES is working to stay afloat. Liquidity is currently being provided by cash reserves and debt funding from the company’s senior lender, the Commonwealth Bank. 1300SMILES also has approximately $10 million in undrawn facilities.
The company is also exploring the possibility and availability of Federal and Government assistance. This includes the JobKeeper program, which may assist in subsidising the wages of those who would otherwise lose jobs and income.
1300SMILES has also implemented a number of cash conservation measures. Most notably, the company’s non-executive directors have all waived their fees for six months, from April to September. Non-executive director Evonne Collier has resigned from the board, although it is unclear if these two decisions are related.
Daryl concluded with confidence, saying “We are well placed to see through this public health emergency and to commence the recovery process when it passes. We are strategising daily on how that looks and will occur.”
1300SMILES’ share price is up a mere 0.2 per cent today, with shares trading for $4.99 each at 10:41 am AEST.
