Petbarn owner, Greencross, has recorded double digit revenue growth for the 53 weeks ended June 30, driven by strength in core pet-food categories and cross-shopping across its veterinary formats.
Group revenue, encompassing retail and veterinary operations, grew by 11 per cent over the prior 52-week period to $817 million, while underlying earnings before interest, taxation, depreciation and amortisation (EBITDA) increased 9 per cent to $104 million.
Underlying net profit after tax (NPAT), excluding one-off tax benefits, rose 7 per cent to $43 million.
Like-for-like retail sales growth of 4.4 per cent was achieved on a 7.4 per cent increase in comparable dog-food sales and a 7 per cent increase in comparable cat food sales, with private label lines showing strength and reaching 21 per cent of total sales.
Online revenue was up over 55 per cent after the launch of click & collect in February, which has quickly grown to represent 40 per cent of daily online sales.
A relaunch of its loyalty program in April drove stronger sales in the second-half, with 87 per cent of purchases now made through the program, coinciding with a 38 per cent increase in customers shopping across both retail and veterinary operations.
Cross shoppers are now 11 per cent of the company’s customer base, representing 26 per cent of total revenue and 30 per cent of gross margin
“FY17 was a pleasing year of growth against a downbeat consumer backdrop. We have made good progress in rolling out our convenient integrated pet-care offering and are committed to rewarding our customers’ loyalty,” CEO Martin Nicholas told the market on Tuesday morning.
“We increased our investment in the customer explicitly via our enhanced Friends for Life Group loyalty program. Pleasingly, after a softer start to [2H17], we saw stronger sales from April to June,” he said.
The first seven weeks of FY18 have continued the momentum from 2H17, with Australian retail LFL sales growth of 5 per cent underpinning an optimistic, albeit non-specific outlook.
The company signalled its intention to continue the roll-out of services, such as in-store vet clinics,with an additional 20 opened during FY17, bringing the total to 37.
The clinics contributed $9 million to the books in FY17, but losses from “immature clinics” are projected to increase from $800,000 to $2.2 million in FY18, with a further 20 slated to be opened.
The clinics are now present in 15 per cent of Petbarn’s 239 store network, which increased by 18 during the year.
An extensive store refurbishment plan is slated to begin in FY18, which will coincide with the planned addition of another 20 in-store clinics and the possible addition of a “number of” veterinary acquisitions, which Nicholas said are “currently in advanced discussions”.
A fully franked final dividend of 9.5 cents per share was declared, bringing full year dividends to 19 cents per share.
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