More Smiles in Challenging Times

1300SMILES Managing Director Dr. Daryl Holmes has announced excellent results for the half-year to 31 December 2015.

Most notable among the period's results is the fact that Net Profit Before Tax, Net Profit After Tax, and Earnings Per Share are each up about 20% on the previous year's first half, despite having only modest (3%) Revenue during this period, due to somewhat challenging economic times across many of the regions 1300SMILES owns and operates it's dental Practices.

The company's interim dividend, at 11c, is the largest dividend the company has ever paid, interim or final. Dr Holmes said, "This dividend reflects our belief that 1300SMILES is stronger than ever before."

The company reported continued strong demand for its $1-a-day Dental Care Plan and increased growth of 1300SMILES DMA Dental Vouchers.

Dr Holmes said, "For those people who do require more extensive dental treatment, our 1300SMILES DMA Dental Vouchers enable people to control the cost of necessary treatments and spread the expense, interest free, over an extended period. The enthusiasm with which the voucher program has been received continues to impress us."

The company also reported making significant investments in digital imaging platforms and other clinical and managerial technologies. Dr Holmes said, "We make these capital investments for the purpose of improving patient care and reducing our operating expense, and I and I believe our first half results provide evidence that this technology investment is paying off."

1300SMILES has supported YWAM for many years now. YWAM has just marked another major milestone with the launch of their newest ship, the MV YWAM PNG. This former cruise ship has been transformed into a brand new four chair dental clinic and day procedure surgery for optical care and general emergency care. This unit will provide thousands of people in Papua New Guinea access to dentistry, eye care, and general medical care--care which would otherwise be completely unobtainable.

Dr Holmes also expressed his enthusiastic thanks to all of their hard working dentists, clinical staff, and management staff, all of whom have worked hard to deliver the good results reported here, and also thanked all their shareholders, for your continuing trust and support.

ABOUT 1300SMILES LTD

OVERVIEW OF THE COMPANY'S BUSINESS

1300SMILES Ltd owns and operates full-service dental facilities at its sites in New South Wales, South Australia, and in the ten major population centres in Queensland. The company continually seeks to expand its presence into other geographical areas throughout Australia. It does so both by establishing its own new operations and by acquiring existing dental practices. The administrative and corporate offices are in Townsville.

1300SMILES enables the delivery of services to patients by providing the use of dental surgeries, practice management and other services to self employed dentists who carry on their own dental practices. The services provided by the company allow the dentists to focus on the delivery of dental services rather than on the administrative aspects of carrying on their businesses. The dentists pay fees to the company for the provision of these services under a Dental Service Agreement with the company. In some circumstances the company also employs qualified dentists.

The dentists who use the company's services range from new graduates to experienced dental professionals. Several dentists who use the company's services have special interests and experience in such areas as endodontics, oral surgery, implants and periodontics and cross-refer work to other dentists who use the company's services.

The company provides comprehensive services in the areas of marketing, administration, billing and collections, and facilities certification and licensing to all participating dentists. The company also provides all support staff, equipment and facilities, and sources all consumable goods using the buying power which derives from such a large group of dental businesses.

FUTURE DEVELOPMENTS

The company's core objective is to continue to increase profits and shareholder returns while providing a rewarding environment for our staff and the dentists using our facilities.

The company aims to achieve a combination of organic growth in its existing locations and the addition of new practice management facilities.

The key drivers for future growth of the company are:

• Increasing profits by attracting more dentists to our existing facilities and expanding those facilities which are already at full capacity;
• Assisting dentists who already practice within the 1300SMILES system to increase their turnover and income through benchmarking, training, and mentoring;
• Establishing new practices in existing and new regions (greenfield sites);
• Acquiring substantial existing practices where we can do so on favourable terms; and
• Managing dental facilities owned by others.