NVC KEEPS PICKING UP PACE

VET company NVC (ASX: NVL) picked up serious pace to perform ahead of prospectus expectations for the full year.

The Brisbane-based company, aiming to be number one in professional pet services, posted a pro forma net profit after tax of $5.27 million, 13.02 per cent ahead of its forecast.

The company's earnings before interest, taxes, depreciation and amortisation (EBITDA) grew 4.63 per cent to $10.06 million.

Managing director Tomas Steenackers says NVC has 'established in quick time a fresh business model'.

In the 10 months since listing to June 30, NVC settled 34 of the 35 clinics listed in its prospectus.

The company also acquired a further seven veterinary services between October and June.

Steenackers says NVC is just getting started.

"Heaps of clinics aren't yet owned by a major player in Australia. There are 2600, we own 43, Greencross owns around 140 and then VetPartners owns a little over 40.

"The problem in Australia, or around the world, there are a lot of smaller clinics that everyone overlooks because they are considered too risky. So we have probably 700 to 800 clinics that would fit really well with us on the acquisition front. They often have few staff and less expertise in management, so we have opened up the business with other management services and these clinics can pay to have access to different levels.

"I really wanted to have three different revenue streams - acquisitions, a training facility which has been open since March, and offering a range of different management services to clinics. There are a few levels in the last one, but we have about 300 clinics in there at the moment, and are just trying to increase the number in that segment."

Steenackers says, from that point of view, the management-minded NVC has a leg-up on competition.

He is still firm NVC won't dabble in retail, like it's biggest competitor.

The company is still consumer-facing though, with it's own loyalty program, Best for Pet, that was introduced in late 2015 and now has more than 4000 members. The program offers incentives for owners to undertake preventative healthcare for their pets, and is targeting 8000 members by the end of the year.

"We don't want to play in retail, for us it's about professional services and how we train clinics. If the people around you win, you also win with them.

"We want to partner with the right clinics - it's not about being the biggest player or having the most clinics - we would prefer returning a good profit to shareholders. We are really pushing in a positive way for professionals to be trained better."

Since the reporting period, NVC has acquired seven clinics in New Zealand and one more in Australia.

In light of its New Zealand expansion last week, NVC reports its addressable market has gone from $2.7 billion to $3 billion.

NVC's share price has been climbing steadily, the company trading at $1.57 just before market close.

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