The 1300 Smiles (ASX:ONT) share price sank today despite results

The 1300 Smiles Ltd (ASX: ONT) share price closed down today, despite the company reporting a significant lift in its earnings.

| More on:
asx share price falling lower represented by investor wearing paper bag on head with sad face

Image source: Getty Images

The 1300 Smiles Limited (ASX: ONT) share price fell into negative territory before closing today, despite what appeared to be solid results from the dental facility operator. After today’s performance, 1300 Smiles share price is sitting at $7.05, down 2.35% for the day.

So, what has investors grinning and grimacing from the company’s half-year results today?

Profitability worth smiling about

Investors may have been put off by the minuscule 1.2% growth in revenue for 1300 Smiles. However, this figure represents the statutory revenue for the period which takes into account various accounting considerations. The company also provides ‘over-the-counter’ (OTC) revenue, which reflects the total amount of money paid by patients for services. This figure increased by 8% to $34.8 million for the half.

The managing director’s letter highlighted online booking as a significant contributor to boosting revenue and cost control during the period. Notably, such online bookings for patient appointments grew by 79% to 2,199 over the last year. Online appointments accounted for an average of 11.53% of total appointments over the past 13 months.

The company delivered a net profit after tax (NPAT) of $5.9 million, which is an increase of 35% on the prior corresponding period. Consequently, 1300 Smiles also is increasing its interim dividend by 9% to 14.5 cents. The high profitability level has set a record for the company in terms of its earnings per share (EPS) attributable to shareholders of 25 cents.

Keeping the balance sheet clean

During the half, 1300 Smiles experienced a 42% increase in cash inflows from operating activities. This increased cash allowed the company to reduce debt levels by 30%, down to $10.5 million from $15 million.

Significant cash outflows in investing activities include the company acquiring a third dental practice in Bundaberg to expand its footprint.

Furthermore, the company ended the half with just over $5.2 million in cash and cash equivalents. Based on the interim dividend of 14.5 cents and the company’s 21.31 million shares outstanding, nearly $3.1 million will be paid out on 18 March.

1300 Smiles share price snapshot

Despite the impacts of COVID-19 throughout the last year on physical forms of business, the 1300 Smiles share price managed to climb 12.1% in this time. That’s certainly something shareholders can smile about. For comparison, the S&P/ASX 200 Index (ASX: XJO) has fallen nearly 3% over the last year. 

At the close of today, the company’s market capitalisation is $171 million.

Wondering where you should invest $1,000 right now?

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for over ten years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes could be the five best ASX stocks for investors to buy right now. These stocks are trading at near dirt-cheap prices and Scott thinks they could be great buys right now.

*Returns as of January 12th 2022

Motley Fool contributor Mitchell Lawler has no position in any of the stocks mentioned. The Motley Fool Australia has recommended 1300SMILES Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on ⏸️ ASX Shares

a woman wearing a close-sitting hat featuring wires and thick computer screen glasses clutches her computer monitor and looks shocked and disturbed as she reads old-fashioned computer text from the screen.
Technology Shares

Here’s why ASX 200 tech shares (ASX:XTX) outperformed today

ASX tech shares have taken a turn for the better today.

Read more »

Worker in hard hat looks puzzled with one hand on chin
Resources Shares

Why did the Rio Tinto share price (ASX:RIO) have such a lousy 2021?

We look at what happened to this ASX 200 mining giant's shares last year

Read more »

a miner wearing a hard hat smiles as he stands in front of heavy earth moving equipment on a barren mine site.
Share Gainers

Here’s why the Rumble Resources (ASX:RTR) share price is climbing 5%

The mineral explorer's share price is on the rise amid promising drill results.

Read more »

share price high, all time record, record share price, highest, price rise, increase, up,
⏸️ ASX Shares

Here are the top 10 ASX 200 shares on Wednesday

Here are your top 10 biggest gainers in the ASX 200 on Wednesday.

Read more »

comical investor reading documents and surrounded by calculators
⏸️ ASX Shares

The ASX reporting wrap-up: WiseTech, Bravura, Seven Group

Just what the investor ordered. Here’s a recap of the companies that reported on Wednesday...

Read more »

Doctor performing an ultrasound on pregnant woman
⏸️ ASX Shares

The ASX reporting wrap-up: Ansell, Kogan, Nanosonics

Just what the investor ordered. Here’s a recap of the companies that reported on Tuesday...

Read more »

blue arrows representing a rising share price ASX 200
⏸️ ASX Shares

Here are the top 10 ASX 200 shares on Tuesday

Here are your top 10 biggest gainers in the ASX 200 on Tuesday.

Read more »

unhappy investor considering computer screen
Share Market News

The ASX reporting wrap-up: Charter Hall, Ampol, NIB Holdings

Just what the investor ordered. Here’s a recap of the companies that reported on Monday...

Read more »