Australian veterinary service provider Greencross Limited (GXL) released strong full year results lifting revenue by 45% and NPAT by 77%.
During FY15 Greencross delivered underlying revenue of $644.5m which compares to $445.5m during FY14, The company increased the size of its network by 35% extending its reach significantly. Underlying EBITDA increased by 60% to $86.8m while NPAT rose 77% to $38.2m. Therefore earnings per share (EPS) increased to 34.3 cents.
Greencross’s Chief Executive Officer Jeffrey Davis said “In FY2015 we not only delivered a 77% increase in underlying NPAT, we strengthened our foundations for another year of strong revenue and earnings growth in FY2016.”
The strong double-digit growth is a result of organic same store sales growth, new store openings as well as vet clinic acquisitions. Greencross opened 65 new retail stores bringing the total amount of stores to 200. 173 stores are located in Australia and 27 stores in New Zealand. The Veterinary clinic network increased by 21 vet clinics to 132 in total. The company expects an additional $31m in revenue derived from the acquisitions completed in 2015. The estimated contribution account for roughly 5% of total revenue achieved.
According to CEO Jeffrey David Greencross has a 8% share of the Australasian pet care market which he values at $8.7bn. The company aims to further extend its network and facilitate access to all retail stores and clinics owned by Greencross Vets.
The stunning results have certainly made an impact on investor sentiment as GXL shares gained ~15% on the opening on Tuesday morning before retreating slightly. At 10:10am the stock is trading at $6.60. GXL closed at $5.98 on Monday afternoon. GXL’s share price halved in value in the past 12 months and fell below the $5 mark in July.
Wise-owl has officially initiated coverage on Greencross (GXL) as a potential short-term trading strategy. We will inform our subscribers in due course if we believe there is an appropriate opportunity.
Author: Simon Herrmann
Aug 11, 2015
Simon is a financial analyst at independent research firm Wise-owl specialised in small-mid cap growth opportunities and ethical investment opportunities. Simon's aim is to disrupt the cliché approach to investment decision making as he believes that socially and environmentally responsible behaviour is a necessity to long-term wealth creation. Simon has a deep fundamental understanding of the global financial landscape and has compiled 300+ research reports, valuations and corporate appraisals. Simon is commonly featured in major media outlets and his research is published weekly in The Australian.