Despite the challenging economic landscape, Australians continue to prioritise their dental health, as evidenced by Pacific Smiles Group‘s (ASX: PSQ) which has reported a notable increase in patient fees, underscoring the resilience of the dental care sector amidst cost of living pressures.
Pacific Smiles disclosed a significant rise in patient fees, which reached $285.4 million as of June 23, 2024, compared to $264.5 million in the same period last year, a 7.9% annual increase, with same-centre patient fees up by 7.4%.
However, the trading update also noted a tapering in the second half of FY24, with a softening in appointment volumes observed in May and June. This decline has been attributed to the broader economic challenges affecting consumer spending decisions. Despite this, Pacific Smiles has adjusted its guidance for FY24, reflecting a slight dip in expected patient fees, now forecasted to be between $291 million and $292 million, just below the previous guidance range of $293 million to $297 million.
In terms of earnings, the company remains optimistic. Pacific Smiles projects its underlying EBITDA to be towards the middle of the previously forecasted range of $26 million to $28 million.
The small revenue forecast reduction comes while Pacific Smiles is in the middle of being acquired by National Dental Care (NDC) which is seeking to acquire 100% of PCQ shares at $1.90 per shares via a Scheme of Arrangement. The Scheme meeting is expected to take place at the end of July, before the public release of Pacific Smiles FY24 financial results.
Management at Pacific Smiles remains confident in the Company’s future, even as they acknowledge the temporary impact of economic pressures on patient volumes. They emphasise that the ongoing commitment to dental health among Australians is a positive indicator of long-term growth prospects for the dental care industry.
Emily Maxwell is a business writer at The Sentiment with interest in the tech, fintech and retail industries.
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