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Greencross to open more instore clinics

Petrina Berry  |  22 Aug 2017Text size  Decrease  Increase  |  

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BRISBANE - [AAP] Greencross (ASX: GXL) says its strategy of locating more of its veterinary clinics inside its petcare shops is boosting group sales and profit.

The Petbarn, City Farmers and Animates stores owner made a $42 million net profit for the 53 weeks to July 2, up 21.5 per cent on its 52-week 2016 financial year.

Revenue rose 11.4 per cent to $817.5 million, with its Australia retail stores sales revenue up 10 per cent and its crucial like-for-like sales, which strips out new store openings, growing 4.3 per cent.

Greencross' Australian vet clinics revenue also lifted 10 per cent with a 4.8 per cent in like-for-like sales.

Its New Zealand clinics did even better, with total sales up 21 per cent driven by network expansion, and like-for-like revenue up 4.9 per cent.

Chief executive Martin Nicholas said it had been a pleasing year of growth given a backdrop of weak consumer spending that had hurt other retailers.

He said instore clinics continued to perform well and had contributed $14 million of revenue for 2016/17.

"Our customers have embraced the convenience of obtaining expert medical treatment and advice for their pets at veterinary clinics located inside our retail stores," he said.

Greencross incurred a loss in the initial ramp-up phase, but the ongoing rollout of instore clinics is expected to continue to bolster sales and profit.

"These in-store clinics utilise existing real estate and will generate superior margins to stand alone clinics as they mature," Mr Nicholas said in a statement on Tuesday.

So far, 15 per cent of the group's 239 retail stores have vet clinics; the group hopes to eventually get that to 60 per cent.

Over the first seven weeks of the 2018 financial year, group sales had lifted 10 per cent and like-for-like sales were up 4.9 per cent.

Shares in Greencross were down 33 cents, or 5.6 per cent, to $5.79 at 1130 AEST.

GREENCROSS FY17 RESULTS:

* Profit up 21.5 pct to $42m

* Revenue up 11.4 pct to $817.5m

* Final dividend unchanged at 9.5 cents a share, fully franked

 

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