Australian Dental Industry and ASX listed Stocks amid COVID-19 Pandemic

  • Apr 08, 2020 AEST
  • Team Kalkine
Australian Dental Industry and ASX listed Stocks amid COVID-19 Pandemic

The dental service industry in Australia is primarily privately funded in comparison with other health care services and include orthodontics, general dentistry, prosthodontist and various other complementary services.

As the cases of coronavirus have grown, many businesses have begun shutting down offices and stores temporarily and sending their workers home to help slow the spread. Impact of COVID-19 on the dental industry will be related to that on many other industries and dental assistants, dentists and many other dental staff will be in the meantime out of work.

Do Read: Key things from COVID-19 Guidelines

Because of the COVID-19 pandemic and social distancing ways, several dental appointments are being withdrawn so that virus spread can be prevented. The cancellations encompass dental practices throughout Australia and involves regular check-ups as well as some surgeries.

Australian Dental Association (ADA) has announced restrictions on the elective dental procedures creating aerosol and rightly so. On 20 February 2020, ADA provided an update related to COVID-19 mentioning the control of the spread of novel coronavirus and management of the risks in general dental practice. The Association also highlighted that if any person has a history of fever and acute respiratory infection then recommend that they delay making any non-urgent dental appointments.

On 27 March, the Australian Health Protection Principal Committee (AHPPC) released advice to dental practitioners about managing COVID-19 and to adhere to strict guidelines, which also comprises turning away additional patients and only treating cases meeting "emergency" criteria.

Moreover, AHPPC advises that all dental practices to apply restrictions according to level 3 as outlined in the guidance of ADA. Level 3 restrictions suggest dentists can no longer treat patients for things like chipped or broken teeth, denture concerns, bleeding or sore gums, crown and bridge issues.

In this article, we are highlighting how these ASX listed dental stock are performing during this pandemic-

1300 Smiles limited (ASX:ONT)

An Australian dental and management service company 1300 Smiles Limited which owns and operates full-service dental facilities across Australia including Queensland, New South Wales and South Australia. The Company provides use of dental services as well as practice management to self-employed dentists and therefore allow the delivery of services to the patients.

The services provided by ONT permit the dentists to emphasis on the dental services delivery instead of the administrative attributes of carrying on their businesses.

COVID-19 Update

1300SMILES traded well for most of the March 2020 quarter period; however, since late-March 2020, the pandemic has had a significant impact on operations and trading of the Company.

Currently, 1300SMILES has about 50 per cent of its practices open through its network, at least on a part-time basis, depending on the demand of patient, along with the availability of dentist and staff.

In accordance with the recommendations of the Australian Dental Association (ADA), Dental Board of Australia and Australian Health Protection Principal Committee, 1300SMILES is currently, and has been observing Level 3 restrictions, which recommends only urgent and emergency treatment using standard protections for individuals who do not encounter the epidemiological or clinical measures.

ONT has nearly $10 million in undrawn facilities and greatly appreciates the support & relationship with its bankers. Moreover, the Company is also investigating the accessibility of Federal and State Government assistance, in particular, the JobKeeper program of the Federal Government for assisting in subsidising wages.

MD comments

Stock Information- The stock of ONT was trading flat at $5.110 on 8 April 2020 (at AEST 11:39 AM), with the market capitalisation at nearly $121 million and almost 23.68 million shares outstanding. ONT stocks 52 weeks high and low price was noted at $6.600 and $4.690, respectively.

Pacific Smiles Group Limited (ASX:PSQ)

An ASX listed company Pacific Smiles Group Limited is in the business of dental care and manages the Pacific Smiles Dental Centres. The Company is headquartered in Greenhills and operates in Victoria, NSW, Australian Capital Territory, and Queensland.

company presentation

COVID-19 Update

Arising from the decision of dentists at centres to only perform emergency procedures in line with the Australian Health Protection Principal Committee (AHPPC)'s statement adopting the Australian Dental Association's response to COVID-19, the Company cannot operate most of its centres.

Effective from 30 March 2020, PSQ reduced its centre footprint from 93 centres down to 17 centres. The centres which will remain open have been selected due to the role they can play as regional “hubs” to continue to offer emergency care within their communities.

Moreover, PSQ mentioned that the Company remains ready to assist the government and health authorities in delivering dental care throughout the COVID-19 crisis if a clinically safe and commercially viable basis can be established.

CEO comments

Stock Information- On 8 April 2020, the stock of PSQ was trading at $1.175, up by 3.982% (at AEST 11:44 AM), with the market capitalisation at nearly $ 171.75 million and almost 151.99 million shares outstanding. PSQ stock’s 52 weeks high and low price was noted at $2.050 and $0.705, respectively.

SDI Limited (ASX:SDI)

A world leader in the dental industry SDI Limited is engaged in manufacturing of specialised dental materials. SDI is well-known across the international industry for its manufacturing technology- ionglassTM, which has led to the development of several unique brands, including the Riva range of glass ionomer products.

The Company has strong R&D, and its products are distributed across 100 countries across the globe. SDI has its offices and warehouses in the United States, Brazil and Germany.

COVID-19 Update

On 2 April 2020, the Company disclosed that it is observing the effect of COVID?19 pandemic on its staff and worldwide operations, with the health and safety of its employees as well as the operations of the business being paramount.

The Company has implemented strategies for reducing the exposure to its employees and address operational changes required to maintain business continuity. These plans have been implemented across SDI’s global operations and will continue to be amended as the situation evolves.

The full effect of COVID?19 on the global business of SDI remains uncertain. However, current indications indicate that global sales for the previous quarter of the financial year would be materially decreased, reflecting the reduced operations of dental offices worldwide and the distributors of the Company.

Signifying the strength of the balance sheet of the Company, SDI’s fully franked interim dividend of 1.35 cents per share as previously revealed on 14 February 2020 would be paid on 17 April 2020.

Stock Information- On 8 April 2020, the stock of SDI was trading at $ 0.715 down by 0.694% (at AEST 11:52 AM), with the market capitalisation at nearly $85.58 million and almost 118.87 million shares outstanding. SDI stocks 52 weeks high and low price was noted at $1.050 and $0.650, respectively.

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