COVID-19 has hit the global dentist industry but these ASX stocks are doing fine
Health & Biotech
Health & Biotech
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Australia’s dentists, particularly those on the ASX, have escaped the worst of COVID-19 thanks to the quick easing of restrictions.
1300 Smiles made a $7.1 million profit for FY20 – down 8.1 per cent – and a $5.9 million profit for the first half of FY21 – up 35 per cent on the prior corresponding period.
Meanwhile, Pacific Smiles made a $5 million profit after tax for FY20 and for the first half of FY21 made $10.4 million – up 107 per cent on the prior corresponding period.
Pacific Smiles and 1300 Smiles shares are up 139 per cent and and 44 per cent in the last 12 months.
Admittedly, this time 12 months ago these stocks were suffering the worst of the global equity rout. But both companies are up by similar margins on a two-year basis (120 per cent for Pacific Smiles and 30 per cent for 1300 Smiles).
As with many other industries, the experience of COVID-19 in Australia for dentists is in sharp contrast compared to the rest of the world.
Today, the World Dental Federation warned of a global “dental disaster” with oral health services being the most affected essential health services due to COVID-19.
Dental practices have switched between differing restrictions and even where allowed, people have avoided routine check-ups or essential treatments.
This was despite a WDF survey for World Oral Health Day finding dentists have lower COVID-19 infection rates than most other healthcare workers.
Arguably this can be seen in the performance of SDI (ASX:SDI) which makes dental equipment for global markets. Its shares are still up in the last 12 months but only by 9 per cent.
It managed to make a profit of $4.6 million although it noted restrictions in global markets, such as the UK, affected the company.
There is one other ASX dentist stock currently in the dental franchise game – Smiles Inclusive (ASX:SIL).
However it is set to be removed from the ASX soon after falling into administration last year following financial problems and boardroom battles.
Nevertheless, the list of ASX dentist stocks won’t remain at three for too long.
The Australian Financial Review reported earlier this week the group has hired Wilsons and Bell Potter as joint lead manager and aims to list later in the year.