Network expansion delivers Kiwi growth for pet retailer

petbarnGreencross 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 including seven more stores and eight in-store clinics, 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,” 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.

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