Smiles Grow After Record Year

MEDIA RELEASE by Shane Russell

LISTED dental group 1300SMILES Ltd (ONT) has brushed away the economic downturn to post a 74 per cent jump in full-year profit to $3.8million.

The record profit came on the back of a 47 per cent leap in revenue to $22.4 million, which was fuelled by integrating, consolidating and growth of all the group’s practices, after several acquisitions during the past two years.

Shareholders can now expect a cash bonus after the company announced its final fully franked dividend would be 6c a share, lifting the full year dividend by 34 per cent on last year.

Earnings per share were up 72 per cent to 18.7c per share.

1300SMILES Ltd has 17 multi-dentist facilities in Cairns, Townsville, Mackay, Rockhampton, Gladstone, Bundaberg, Caloundra, Brisbane, Toowoomba and Tweed Heads. Managing director Dr. Daryl Holmes said the company had achieved record results on all significant levels.

“We began the year confident that our business and our operations were well equipped to cope with the global economic downturn,” Dr. Holmes said.

“We finished the year with not only the best profit result ever, but also with our biggest ever increase in annual profit.”

1300SMILES Ltd made its first expansion outside of Queensland last December, opening a practice at Tweed Heads in northern New South Wales. Then, in March, the company entered into its first management services agreement with Perth-based dental group, LifeCare Dental.

Dr Holmes said future growth would come from acquiring established practices, attracting more dentists to work within its existing facilities, setting up new facilities in new and existing regions, and by providing management and consulting services to large dental facilities owned by others.

“We expect that the coming year will see increased revenue from the management of nonowned facilities, but we have not and will not reduce the enthusiasm we have for recruiting dentists and making significant acquisitions,” he said.

“We have a very low level of debt and access to abundant loan capital, if required.

“Our cash flow is strongly positive and many profitable additions to our business will require only minor capital outlays.”

Dr. Holmes said the dividends paid this financial year would reflect the company’s core commitment to shareholders.

“The full year payout for 2009 will be 11.4c per share, an increase of 34 per cent on last year,” he said.

“This figure is three times the level that was achieved after our first full year of operation as an ASX-listed company four years ago, and this represents compound annual dividend growth of 31.6 per cent.”

1300SMILES Ltd provides the use of dental surgeries, practice management and other services to self-employed dentists who operate their own practices.

The company’s structure allows dentists to focus on the delivery of dental services rather than the administrative and management operations. The dentists pay fees to the company for the provision of these services under a Dental Service Agreement with the company.

ENDS
Media Contact: Shane Russell on 0408 010 932 or shane@russellpr.com.au