Dental group’s learnt lessons
GOLD Coast dental group Smiles Inclusive says it has learnt important lessons from its roll-up of 52 practices following a disastrous first quarter which saw the company bleed cash.
The Burleigh Heads-based company, which said it had acquired three more practices on the Gold Coast this month for $3.4 million, held its annual meeting earlier this week.
Shareholders heard a raft of factors were responsible for disappointing cash receipts of $11.6 million in the first quarter – well below the budgeted $13.7 million.
They included losing $800,000 in revenue after the sudden tragic death of a dentist in Sydney and a joint venture partner being fined for administering radiation without a user licence in 2016 – before the acquisition by Smiles.
Smiles said it has started legal action against the vendor and the practice is expected to re-open in February.
The company also lost $600,000 after failing to have the right tools in place to manage unscheduled leave.
Smiles said this had been rectified after putting in place a tool for “three-month rolling visibility” of leave arrangements and changes to staff contracts.
Managing director Mike Timoney said the company had identified improvements to its processes after integrating and building a network of 52 practices within 120 days of listing.
“It has given us insights into the strengths and weaknesses of each practice, and identified important improvements to our integration approach,” he said.
“These lessons have strengthened the foundations of the business and will help us to drive performance improvement and streamline the integration of future acquisitions.
“The benefits of this approach are gathering momentum with average daily revenue increasing by 8 per cent over the financial year to date and a number of organic growth initiatives being implemented.”
Smiles said it has enhanced its systems for acquiring and integrating new practices to simplify the process for vendors.
“Contracts have been updated to provide more detailed transitional arrangements going forward.
“Enhanced support is provided to practices with a business manager assigned from the date of settlement and additional practice management training.
“Rostering will be reviewed within 21 days of acquisition and Totally Smiles branding
will be implemented within 90 days.”
The market, however, remains unconvinced.
The share price, which has fallen 60 per cent from its IPO price of $1 a share, yesterday refused to budge, holding steady at 40¢.
Smiles has a number of initiatives to boost growth including getting more bums on chairs at its practices by hiring more dentists, mining databases to see which patients are past due for a check-up, and the promotion of so-called alternative payment channels such as Zip Money and Afterpay.