Pacific Smiles Group Ltd Share Price up 13.21% (ASX:PSQ)

At the time of writing, the Pacific Smiles share price is sitting at $2.40 up 13.21%.

Pacific Smiles Group Ltd [ASX:PSQ] reported better-than-expected growth which moved the share price up.

ASX PSQ Share Price Chart

Source: Optuma

The growth of Pacific Smiles

The company took a hard tumble into the March low this year but have since recovered very well from falling over 65% from February to March.

From the March low the share price is up over 240% to where it trades at the time of writing, as can be seen below:

Pacific Smiles Share Price Chart 2

Source: Optuma

When COVID-19 swept through the country back in March, PSQ were forced to close a lot of their dental clinics.

Only 17 of the 93 centres the company operates could remain open.

Mainly in regional areas and only due to emergency care within their communities.

The majority of Pacific Smiles employees were stood down from 1 April.

But the company still managed to build strong momentum moving into FY21:

  • Strong same centre patient fee growth in June of 12.4% and July of 13.5% compared to pcp, following lifting of government mandated restrictions in May.
  • One new centre already opened, a further nine sites committed for FY21.
  • All Melbourne metro dental centres operational under Level 3 government mandated restrictions, but at reduced opening hours and emergency procedures only.
  • Same Centre Patient Fee growth tracking at approximately 10.6% YTD at 18 August 2020 (excluding VIC tracking at approximately 19.6% YTD).

Moving into 2021

The company is expecting big things for the coming year.

With patient fees expected to grow 25­–30% on the back of:

  • Strong year-to-date same centre fee growth performance as reported above.
  • Assuming H2 FY21 trading without significant COVID-19 disruptions.
  • The opening of approximately 14 new dental centres (previously 12).

A $0.024 fully franked dividend was paid in March, while a final dividend had not been declared while the company struggled with the significant impact of COVID-19.

Pacific Smiles Share Price Chart 3

Source: Optuma

The chart shows the share price is now sitting around the resistance level of $2.39. If it continues to move up then the level of $2.50 may become the focus.

On the downside if the share price retraces, then the level of $2.18 may be enough to halt the fall.

Pacific Smiles look to have navigated the disaster of 2020 well. With the expansion plans the company is involved in, I wouldn’t be surprised to see the company move even higher in 2021.

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Regards

Carl Wittkopp
For The Rum Rebellion


Carl Wittkopp writes for The Rum Rebellion and has a diploma in Financial Planning. He specialises in the technical analysis of stocks.


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