Greencross net profit rises as CEO Martin Nicholas exits
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Outgoing Greencross CEO Martin Nicholas is leaving the pet and care retailer in good health. Peter Braig
by Sue Mitchell
Outgoing Greencross chief executive Martin Nicholas is leaving the pet and vet care retailer in good health, delivering a 9 per cent increase in December-half net profit to $23.2 million and flagging profit growth around 5 per cent for the full year.
Underlying net profit for the 26 weeks ended December 31 rose 10.7 per cent to $24.4 million, underpinned by solid sales growth, new stores and stronger gross margins in vet clinics, which countered discounting in retail stores.
Group sales rose 8.8 per cent (on a 26 week basis) to $433.3 million, with same-store sales growing 4.5 per cent as Greencross added in-store services such as grooming, dog washes and obedience training.
Australian online sales rose 92 per cent to $9 million and now represent 3.4 per cent of Australian retail sales. The company also opened eight new retail stores, eight new vet clinics, and three specialist and emergency practices.
May14GMT+1000 (AUS Eastern Standard Time)Feb13Feb18468103.86710.159
Last updated: Mon Feb 26 2018 - 10:10:44 AM View full quote
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Mr Nicholas said Greencross remained comfortable with consensus forecasts for the full year, which are around $45 million, compared with $43 million in 2017, implying 4 per cent growth in the June-half.
After 32 weeks, total sales were up 9 per cent and same-store sales had risen 4.2 per cent, with Australian retail comps up 3.7 per cent, Australian vet comps up 5.2 per cent and New Zealand comps up 4.8 per cent.
Citigroup analyst Sam Teeger said group same-store sales growth had slowed in the first six weeks of the June-half to 2.9 per cent, compared with 4.5 per cent in the December half, driven by Australian retail and vet.
"Despite the reiteration of 2018 guidance, we maintain our cautious stance given the slower start to the June half, uncertainty around the incoming CEO's strategy, and Amazon's likely expansion of its Australian pet offering in calendar 2018," Mr Teeger said.
Mr Nicholas is due to hand the reins to former Qantas executive Simon Hickey, who ran Qantas Frequent Flyers for five years and Qantas International for six years.
Mr Hickey has flagged a stronger focus on customer loyalty and data to grow the retailer's sales and defend its market share from competitors such as Amazon.
Greencross increased its interim dividend by 0.5 cents to 10 cents a share, payable March 23.
