Greencross barks up right tree with integration plan
VETERINARY services and petcare retailer Greencross has upgraded its expansion plans as increasing demand for its “one-stop shop” offering helped lift its half-year profit by 17 per cent.
The Petbarn and vet clinic owner made a net profit of $21.9 million in the six months to December 31, as like-for-like sales lifted 4.3 per cent.
Chief executive Martin Nicholas said double-digit growth in revenue and earnings showed the company’s integration strategy – locating vet clinics inside its petcare outlets – was working.
Brisbane-based Greencross intends to accelerate its rollout of new clinics and retail outlets over the full financial year, especially in-store clinics, which it says deliver superior economic returns.
“I look at ourselves effectively as a combination of a grocery and pharmacy channel for animals,” Mr Nicholas said.
“In other words: there’s a large staple component to our business. So, as far as network capacity is concerned, I think it’s more relevant to compare us with grocery or pharmacy stores than other more discretionary retail formats in terms of the optimum number of stores in the Australia and New Zealand market.”
Greencross added 16 stores to its retail network – which includes the City Farmers and Animates banners – in the first half of the year, bringing its total to 237.
Strong revenue growth from services such as grooming, dog wash and obedience training, and record sales of dog and cat food, drove likefor-like sales growth of 4 per cent across retail operations.
It now plans to open 21 stores in the full year.
Greencross opened 10 vet clinics in the first half to bring the total to 164.
The veterinary division lifted like-for-like sales by 5.3 per cent, driven by a rapid rampup in visits to the group’s instore clinics and cross-referrals from the retail stores.
Greencross has added seven in-store clinics in the first half and one in-store clinic since the end of December, taking its total to 25. It now plans to open 16 over the course of the full year.
Mr Nicholas said Greencross could comfortably fit an in-store clinic into 60 per cent of its stores.
The company has forecast full-year underlying profit growth similar to the 10 per cent achieved in 2015/16.
Greencross shares rose 45¢, or 6.8 per cent, to $7.08.