GREENCROSS SNUBS TAKEOVER, SITS ATOP RECORD RESULT

GREENCROSS (ASX: GXL) has reported a record first half result and taken a swipe at 'opportunistic' suitors.

The operator of Petbarn, City Farmers, Animates and Greencross Vets saw its revenue climb 18 per cent to $362.7 million, driven by network expansion and group like for like (LFL) sales of 5.1 per cent.

Brisbane Business News can also report the company has come off a record month for online sales in January, up 70 per cent.

Greencross CEO Martin Nicholas (pictured right) says the result validates the board's view of the company's long term value.

Armed with the results, Nicholas also took a swipe at recent comments concerning the company's valuation, with respect to TPG and Carlyle's recent $736 million takeover proposal.

"Greencross' first half performance validates the board's view of the long term future value of the company and endorses the board's response to recent opportunistic approaches which fundamentally undervalued Greencross," says Nicholas.

"We are delivering on our strategic growth initiatives, adding 11 new stores and 17 new clinics (including 9 'in store' co-located clinics) to our expanding network.

"Greencross' integrated pet care model is proving successful with the number of cross shoppers who both shop at our retail stores and use our veterinary services increasing by 27 per cent to almost 50,000 customers over the past 12 months.

"Our profitable online business recorded 70 per cent revenue growth and is expected to reach $10 million in annualised revenue by the end of FY2016."

Greencross was able to deliver this result by increasing the top 1000 lines to over 95 per cent while store inventory levels decreased. 

Retail sales revenue at Petbarn stores grew 15 per cent for the company in Australia over the period, while vet sales revenue climbed 25 per cent.

Online sales revenue was the big winner, however, with visits to the Petbarn website increasing to over 550,000 per month.

"We are committed to investing further in our digital and online platform to become the #1 player in the $150 million Australian online pet market," says Nicholas.

"Our store network actually provides us with a unique competitive advantage compared to pure online players, as it provides us with over 300 locations for click and collect."

Greencross intends to add 20 stores and open 12 'in store' co-located clinics in financial year 2016, and the level of vet acquisition activity in the second half is expected to be similar to that of the first half.

Greencross has declared a fully franked interim dividend of 9c per share, 13 per cent higher than the dividend for the previous corresponding period. The dividend will be paid on 23 March 2015.