Veterinary and pet shop chain Greencross (GXL) disappointed investors at first yesterday, despite reporting a solid performance for the year to June with the results boosted by acquisitions, as expected.
Full-year profit has jumped 81.5% to $34.6 million, with final dividend up two cents a share to 9.5 cents, and the full year payout to 18.5 cents a share.
Revenue for the 12 months to June 30 rose 14% to $733.7 million as the group opened 21 stores and 23 clinics taking its total to 376 outlets.
Underlying net profit rose 10% to $42.1 million in the year to June, just topping market forecasts for a figure just under $42 million (and a second half rise of 19%).
Underlying earnings before interest, tax, depreciation, amortisation and depreciation (EBITDA) rose 12%to $97.5 million, falling slightly short of forecasts around $99 million.
Same-store sales in pet care stores rose 3.4%, despite a soft second half, when warm winter weather dented sales of bedding and coats.
The momentum continued into the new year, with same-store retails sales rising 2% in July and 4% in August. Vet GP clinic visits hare up 5% so far in 2016-17, in line with tyhe trend in the June 30 year.
But the shares lost just over 4% in early trading yesterday, but like a few other companies reporting yesterday, those earlier losses turned into either smaller falls or gains in the afternoon session. Greencross shares ended the day up 1.5% at $7.41 as investors took another look at the figures.
Chief executive Martin Nicholas said yesterday the company expects underlying net profit and EBITDA to rise at a similar rate in 2017 (around 10%).
“We have started the year in line with these expectations," he said.
Greencross is the country’s largest stand-alone pet-care chain after snapping up dozens of independent retailers and vet clinics in the past few years. It owns around 376 retail stores and vet clinics under the brands Petbarn, City Farmers, Animates and Greencross Vets.
Greencross sees its sales and profit growth coming from a strategy of taking share from supermarkets, private vet practices and pet-care suppliers, and rolling out small-format stores, vet clinics and co-located clinics, while increasing the focus on online retailing of products.
Earlier this year the company saw off private-equity suitors TPG and Carlyle Group (like TreasuryWine Estates did in 2014, and benefited enormously with the subsequent surge in the share price going to loyal investors).
Greencross shares have risen 9% this year, from $6.70 to $7.30. Yesterday’s small rise added to that gain. The company’s most recent peak was $7.98 in late June.
