ASX grills Smiles Inclusive again

LISTED dental group Smiles Inclusive has again been asked to explain its financial situation to the Australian Stock Exchange as disgruntled business partners threaten to draw more parties into a potential $40 million class action.

The Gold Coast group revealed a $31 million net loss for last financial year in its audited results on Tuesday, far worse than the $18.9 million it reported on August 30. The audited results were released as the company embarked on its second capital raising exercise in four months, with auditor KPMG saying there were “material uncertainties” in the group’s ability to continue as a going concern.

ASX listings compliance officer Lisa Banh grilled Smiles on when it knew the impairments to its assets reported in August were likely to be far exceeded in the actual results.

The company said it did not learn there would be a disparity until September 24 and did not find out the actual goodwill impairment figure until the night before its final report was publicised. Smiles said it chose not to inform the market an impairment was likely as soon as it found out because “the valuation of the company’s goodwill is a non cash item”.

“The market is well aware of the issues that the company has faced and that it is in the early stages of a turnaround designed to improve cash flows and the underlying value of the company,” Smiles said. Shares in Smiles finished trading 6.52 per cent higher at 4.9c.