Smiles hit with trading ban

ASX suspends shares of dental care group

BURLEIGH-BASED dental practice group Smiles Inclusive has been suspended from the ASX after failing to lodge its half-yearly accounts on Friday.

The Tony McCormack-led company made the announcement yesterday morning stating it understood the ASX will suspend its shares until it releases its half-year financial statements.

“The company’s audit and risk committee and management team are working closely with the company’s auditor to release the finalised results as soon as possible,” it said.

Smiles shares last traded at 3.5¢ and have fallen as low as 3.1¢ in the past 12 months.

The company has faced two grillings recently from the ASX in regards to whether it is complying with the sharemarket operator’s listing rules.

Smiles responded on February 24 to queries from the ASX relating to compliance with its loans with main lender NAB.

The company said it had been granted a waiver from the covenants in March subject to ongoing review and reporting by accountancy firm Deloitte.

Smiles said it was in discussions with NAB on the development of modified covenants. The NAB facilities include one for acquisitions ($14.034 million), working capital ($4 million) and a “multi-purpose” facility including a credit card ($500,000) and bank guarantee ($268,422). It said interest payments are paid in full each quarter apart from the credit card, which is paid monthly.

The company was also questioned by the ASX in early February regarding its latest negative cashflow report, which left a negative balance of $3.2 million.

Chairman David Usasz responded then that the company was continuing with its turnaround plan.

He said the company expected cashflow to improve in the short-to-medium term although “the likelihood of negative operating cashflows for the time being remains relatively high”.

That was despite the company accruing $1.862 million from the sale of Totally Smiles Gatton and Totally Smiles Laidley, both in the Lockyer Valley region, late last year.

Last year the company initially reported a full-year loss of $18.9 million before announcing the audited figure was a net loss of $31 million due to a sharp increase in impairments.

The company has attracted criticism from dentists in the past due to late commission payments.