Oasis Healthcare, the AIM-listed chain of dentists, is to miss profit forecasts this year after failing to encourage enough patients to have implants instead of dentures.
The business has also been hit by the retirement of several dentists at a business it acquired a year ago, and by the costs of starting up a surgery in London's Selfridges store. Oasis shares tumbled 2.5p to 20p yesterday, leaving the group valued at £16.3m. The company has built up a chain of 127 dental surgeries since floating at 25p a share in 2000. It hopes to turn dentistry from the preserve of single-surgery partnerships into a business along the lines of Specsavers and other opticians.
It wants to move dentistry from the medical arena into a fashion and beauty category, where customers are told they can "buy a perfect white smile".
But yesterday Oasis said there was continuing underperformance by surgeries in the Dencare group it bought for £7.2m in December 2002. As a result of problems with integrating the group, 12 of the 36 sites acquired missed margin improvement targets, Malcolm Hughes, the chief executive, said.
Attempts to improve margins have centred on introducing expensive specialisms such as implants, where new teeth are screwed into a patient's jaw instead of making dentures, Mr Hughes said. "We were looking for something more significant in terms of growth profile. We have been planning to grow the level of implant activity, but we have needed to make sure we have strong surgical capabilities, then we need to spend time marketing the service before we get a stream of referral patients." A 3 per cent shortfall in turnover compared with expectations for the year ended 31 March will result in a reduction in profit to £1.2m, compared with the previous forecast of £2m.