Pacific Smiles Group (PSQ) H2 2024 earnings summary

Executive summary

• Achieved strong operational and financial performance in FY 2024, with a 7.9% increase in patient fees to AUD 291.8 million and a 16.9% rise in underlying EBITDA year-over-year, despite no new centre openings.

• Underlying net profit after tax nearly doubled to AUD 8.9 million, reflecting revenue growth and operational efficiencies.

• Maintained a debt-free balance sheet with net cash of AUD 17.7 million, enabling a fully franked final dividend of AUD 0.0325 per share.

• Successfully navigated external acquisition interest and board changes without disrupting core business operations.

• Staff and dentist turnover rates continued to decline, supporting centre stability and improved financial outcomes.

Financial highlights

• Patient fees reached AUD 291.8 million, up 7.9% year-over-year, with attended appointments increasing 3.5% and modest price/mix improvements.

• Underlying EBITDA rose to AUD 28.2 million, a 16.9% increase, with margin expansion of 110 basis points to 9.7%.

• Underlying EBIT margin to revenue rose by 200bps to 6.7%.

• Free cash flow remained strong at AUD 18.8 million.

• Return on equity improved to 26.4% from 13.2% in FY23.

Outlook and guidance

• Early FY 2025 trading strong, with patient fees up 10.9% year-over-year (8.4% normalized for trading days), and July a record month.

• No formal FY 2025 guidance provided due to economic uncertainty and recent corporate activity; update on first quarter trading to be given at the AGM.

• Two new HBF Dental Centers to open in FY 2025; unlikely to open new Pacific Smiles centers in H1 FY 2025.

• Fair Work wage increase for FY25 is 3.75%, lower than the 5.75% in FY24.