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The 1300 Smiles (ASX:ONT) share price reaches record high. Here’s why.

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The 1300 Smiles Limited (ASX: ONT) share price has been on the run today following a trading update for the September quarter.

In mid-afternoon trade, the 1300 Smiles share price reached a record high of $6.80, but has since slightly pulled back. The 1300 Smiles share price finished the day at $6.75, up 5.6%.

Let’s take a look at 1300 Smiles and how it performed for Q1 FY21.

What does 1300 Smiles do?

1300 Smiles owns and operates full-service dental facilities in New South Wales, South Australia, and Queensland.

The company provides the use of dental surgeries, practise management and other related services to self-employed dentists who run practises.

Strong Q1 result

1300 Smiles announced it recorded positive revenue growth for the quarter on its over the counter (OTC) service. All practises across the network saw a 21.5% rise in earnings over the prior corresponding period. This was underpinned by an easing of COVID-19 restrictions, which allowed clinics to re-open and sell 1300 Smiles services.

The company said that excluding the two practises that were severely affected by COVID-19, its performance would have been stronger. It highlighted that OTC revenue growth jumped 23.8% in September and 20.1% in Q1 FY21, eliminating the prior clinics.

1300 Smiles attributed the surge in revenue to a range of factors as a result of the pandemic. These include increased patient demand for dental services, treatment rates, extended clinic operating hours and growth in the number of dentists engaged with the company.

Managing director Dr Daryl Holmes said the company’s performance during 1Q FY’21 was “extremely pleasing and a testament to the long-term strength and resilience of the 1300SMILES business”, adding:

The board and I are grateful to all our dental professionals, support staff and management team for their continued dedication and focus during this challenging period, which has allowed 1300SMILES to achieve these excellent results.

About the 1300 Smiles share price

The 1300 Smiles share price has made a stunning recovery since plummeting to a 52-week low of $4.69 in March. The company reached a record high today of $6.80, and has risen 10% in year-to-date trading.

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Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia has recommended 1300SMILES Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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