Greencross profit up 18.7pc to $21.2m Greencross said the...

Greencross profit up 18.7pc to $21.2m

Greencross said the strength of its first-half result proves its suitors are being opportunistic as the company reported a 18.7 per cent rise in underlying net profit to $21.2 million.

The vet and pet retail group rejected a sweetened $770 million takeover bid from private equity firms TPG and Carlyle, saying that the $6.75 a share offer "fundamentally undervalues Greencross".
Greencross has a target of 30 vet clinics within retail stores) by the end of the 2016-17 year.

Chief executive Martin Nicholas said the first-half performance vindicates the board's dismissal of the private equity approach.
He told Fairfax Media there was "no value" in the latest offer and, as a result, there has not been even low-level engagement with the bidders.
"We remain very focused on running the group for the benefit of all shareholders. The group remains focused on delivering the results. The distraction [from the takeover approach], if anywhere, is contained very much to myself," Mr Nicholas said.
"There won't be any deviation from our strategy."
'In-store' clinics
Revenue for the six months ended December 31 rose 18 per cent to $362.7 million while underlying earnings climbed 17 per cent to $48.5 million.
During the half, Greencross established nine additional vet clinics within retail stores with a target of 30 "in-store" clinics by the end of the 2016-17 year.
The company pitches its co-location strategy as a key driver of growth by cross-selling vet services and retail products.
On a call with analysts and investors, Greencross management said that vet customers who also shop in the retail store are worth twice as much revenue, while retail shoppers who also use vet services are worth five times as much.
"Greencross is accelerating its retail co-location store rollout as the vet acquisition market intensifies," Bank of America Merrill Lynch analyst Silvia Spadea said in a research note.
"The clinics that opened in [financial year 2015] are performing ahead of expectations and have reached profitability within the first 12 months."
On a statutory basis, Greencross' profit jumped to $19.7 million from $2.61 million.