GREENCROSS BARKS UP THE MONEY TREE

GREENCROSS BARKS UP THE MONEY TREE
GREENCROSS (ASX: GXL) has lodged another successful year, with the pet company increasing its revenue and NPAT substantially.

The Greencross network has grown 35 per cent in the past year, contributing to a 75 per cent increase in revenue to $644.5 million and a 77 per cent increase in underlying NPAT to $38.2 million.

Shareholders will receive a fully franked final dividend of 9 cents per share, paid on 18 September, which represents a dividend payout ratio of approximately 50 per cent.

Sales, store openings and vet clinic acquisitions all drove these figures up, and the company's EBITDA suggests the trend will continue despite a consolidating veterinary services sector.

EBITDA increased 60 per cent to $86.8 million, a reflection of economies of scale and benefits from an integrated pet care model, according to the company.

Perhaps the biggest physical change experienced across the year was seen in the Greencross retail footprint, the network growing from 65 stores to 200 stores due to a City Farmers acquisition in July last year.

Greencross CEO Jeffrey David says the company is poised to further capitalise on a burgeoning industry.

"Greencross currently has a ~8 per cent share of the fast growing $8.7 billion Australasian pet care market and our aim is to achieve 20 per cent market share," says David.

"We estimate that 59 per cent of Australian families have easy access to at least one of our retail, grooming and veterinary service offerings.

"A key element of our strategy is to extend our customer reach by expanding our store and clinic network and developing our digital offering so as to increase the number of pet owners who can conveniently access our products and services."

The payoff of this integrated pet care approach is already perceivable, with the company estimating retail customers who expand their engagement to grooming and vet services spend five times as much.

"[It's] a win/win for our customers and our shareholders," says David.

This strategy differs from that of new Brisbane pet company on the block, NVC Limited (ASX: NVL), which will initially focus primarily on vet services.



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