The headlines from yesterday’s annual meeting of pet care retailer and veterinary services provider Greencross was defiance in the face of the approaching arrival of Amazon, but the better story was the solid first quarter sales performance.
Greencross chair Stuart James told the meeting the company’s unique features will make it very competitive when Amazon arrives.
He said Greencross has more than 650 vets and can provide a “one-stop” for pet owners seeking veterinary services, grooming salons, dog wash, pet insurance, pet hotel booking, dog walking and obedience training.”
Mr James also pointed out Greencross has a large and loyal customer base, with more than 87% of the group’s sales made on the group loyalty card, which provides the company with in valuable data on pet owners’ shopping habits.
“A lot has been made recently of the potential impact of Amazon on the Australian retail landscape," Mr James said at the company’s annual general meeting in Wednesday. "In response to this discussion, it is worth pointing out that our business has many unique features which differentiate us from both online and bricks-and-mortar competitors."
And to emphasise the internet he said Greencross is also expanding its own online business, which grew by 55% in fiscal 2016-17.
But it was the more immediate sales performance news from CEO Martin Nicholas that investors focused on. Group total sales are up by 8.5% and group like-for-like sales are 4.4% higher.
Retail like-for-like sales have risen by 4.1%, and Australian veterinary like-for-like sales are up 5.4%.
Mr Nicholas said the pet care business is proving resilient in a downbeat consumer environment. In fact they are sales (like Super Retail group revealed on Monday) that would gladen the heart of any retailer, large and small at the moment. Greencross expects to add 15 stores and 20 in-store clinics to its network in 2017-18. So far this financial year the company has opened 5 stores, 4 in-store clinics and 4 grooming salons.
That was after 18 stores, 25 clinics (including 20 in-store clinics) and 13 grooming salons were opened in 2016-17. Mr Nicholas said Greencross’ Petbarn Foundation had “saved the lives of over 7,000 animals and raised more than $2.8 million for the RSPCA, Seeing Eye Dogs Australia and our other charity partners.”
Greencross shares ended 2.5% higher at $5.73.
Meanwhile three Asian investors, led by a Beijing-based private equity group called Hosen Capital, have paid $A1 billion the Australian pet food company, Real Pet Food Company from the Australian private equity group, Quadrant. The deal needs FIRB approval.
Hosen has bene joined by Chinese agricultural group New Hope Group and Singapore’s state investment company Temasek to buy Real Pet Food (http://realpetfoodco.com.au) from Quadrant and the founding Quinn family and management, which which paid $A410 million for it’s stake in 2015.
The new owners say they plan to invest in the business to help it expand into overseas markets including the US and China. "For the past two years Quadrant have supported us to grow strongly in our home markets,” said David Grant, chief executive of Real Pet Food. Its brands include Fussy Cat, Ivory Coat, Tucker Time For Pets and V.I.P. Petfoods.
“Now our Asia-Pacific partners are ideally suited to support us as we look to take our success to the Chinese and North American markets.” Mr Grant forecast company revenues would surpass $A500m in the 12 months through end-June 2018, up from just below $A300m when Quadrant bought the business.
