All of 1300 Smiles’ Jobkeeper subsidy has gone on its dividend
Health & Biotech
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Jobkeeper subsidies will make up two thirds of dental group 1300 Smiles’ (ASX:ONT) final dividend at 12.5c payout.
The company has maintained its fully franked final dividend at 12.5c, paying out a total of $2.96m to investors.
The company received $1.8m in Jobkeeper wage subsidies from the federal government to support it through the early months of the pandemic.
The subsidy has already been dubbed ‘Dividendkeeper’ as reporting season begins to make clear how much of the wage subsidies are being paid out to shareholders.
The original Jobkeeper program required companies to record or forecast a 30 per cent drop in revenue for a single month in order to be eligible for the $1500 a fortnight Jobkeeper subsidy for six months.
Managing director Dr Daryl Holmes says the company is still receiving the subsidy and will continue to do so until the September 28 cut off date.
Fiscal 2020 delivered 1300 Smiles a record breaking revenue month and a full year profit that dipped 8.1 per cent to $7.1m.
Revenue ticked down 1.3 per cent to $40m.
In April the company said it was operating at half of its capacity, as level three restrictions recommended only urgent and emergency treatment.
By June it was doing better than the same month in 2019, delivering its “highest monthly revenue ever”.
Revenue for that month was up 18 per cent compared with the same month in 2019; same-store sales revenue was up 20 per cent on June 2019; and normalised EBITDA (earnings before interest debt, depreciation and amortisation) was up 65 per cent.
Holmes told Stockhead that surge in June is ongoing and the company is speculating that it was due to a variety of causes, from the pent up demand of missed appointments to working from home helping people fit a dental appointment more easily into their day.
“Finances may’ve prevented ongoing treatment & oral makeovers/improvements happening,” he said.
He also speculated that COVID19 may have created an overall increased awareness of health and well-being issues, amid concerns about getting healthier, as well as people wanting to feel and look better after the challenge of isolation.
“A ‘coming out’ per se and ‘getting back to normal’ again ASAP,” he wrote in an email.
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