Transcription of Finance News Network Interview with Greencross Limited (ASX:GXL) CEO, Jeffrey DavidLelde Smits: Hello I’m Lelde Smits for the Finance News Network and joining me from integrated pet care company Greencross is its CEO, Jeffrey David. Jeff welcome back to FNN.
Jeffrey David: You’re welcome Lelde; it’s nice to be here.
Lelde Smits: Greencross has just reported record first half results. What were the highlights?
Jeffrey David:We have Lelde; it was a great first half. On an underlying basis our revenue was up 43 per cent, our EBITDA up 62 per cent and our net profit after tax, up 81 per cent.
Lelde Smits: Consumer conditions have been patchy. How did like-for-like sales trend over the period and how do you expect trading conditions would impact the second half?
Jeffrey David: So we’re very fortunate that the pet industry is quite resilient and we’ve seen that in the past, when we’ve had tough consumer times. At the moment we’re trading strongly. For the first half, our like-for-like sales and our retail business in Australia was 6.5 per cent. We were 6.1 per cent in our New Zealand business and 6.2 per cent in our vet business. And since Christmas, like-for-like trading has strengthened.
Lelde Smits: On to mergers and acquisitions. What progress has Greencross made in terms of realising synergies from the Greencross Mammoth merger?
Jeffrey David: So we’re going very well, everything’s on track. All of the cost synergy goals that we set ourselves have been met and have been delivered. And the revenue synergies are progressing very, very well.
Lelde Smits: Greencross also bought the City Farmers business in July last year. How has the integration progressed?
Jeffrey David: The integration’s going very, very well. We’ve purchased 42 stores from City Farmers, which gave us a market leading position in Western Australia. All of our goals for cost synergies and trading term margin synergies have been achieved. And we’re going very well with the remerchandising and the reformatting of all of those stores.
Lelde Smits: The Company is now diversified across veterinary care, retail and even pathology. Are there any complimentary businesses you’re considering?
Jeffrey David: We’re working now to bring the services and the retail businesses that we have together, to co-locate the facilities that we have, so that we can make it easier for our pet consumers to own a pet. Putting grooming with a pet store, vet clinics with a pet store in a co-located facility and we’re seeing some great success from that.
Lelde Smits: On to your outlook, the Company’s guidance has flagged 25 new Greencross stores by the end of FY15. How is the roll out of new stores progressing?
Jeffrey David: We’ve had a great year to date. In addition to the 42 City Farmer stores, we’ve opened 21 stores and we have lease commitments for a further nine, of which four will open in early 2016. So we’re absolutely on track to deliver our guidance.
Lelde Smits: What about vet acquisitions?
Jeffrey David: We’ve done well on vet acquisitions this year. We’ve achieved 14 acquisitions so far with annualised revenue of $27 million, beating our target of $25 million and the pipeline remains strong.
Lelde Smits: Greencross is targeting earnings per share of 36 cents over the full year. How are you tracking toward that goal?
Jeffrey David: We’ve had a very strong first half delivering 48 per cent of that target and so we’re confident of delivering the 36 cents.
Lelde Smits: Finally Jeffrey. What are Greencross’ key priorities over the coming six months?
Jeffrey David: The key priorities are the same as they always are; delivering on our growth targets by opening more stores, acquiring more vet practices and deepening our engagement with our pet consumers.
Lelde Smits: Jeffrey David, thank you for the update from Greencross.
Jeffrey David: Thank you Lelde.
Ends
