Greencross Fulfilled All The Pre-Conditions For FIRB Approval

Greencross Fulfilled All The Pre-Conditions For FIRB Approval

The pet care company Greencross Limited (ASX: GXL) reportedly fulfilled all the terms precedent to the Scheme Implementation Agreement which was required for securing the Foreign Investment Review Board (FIRB) approval.

In the announcement dated 30 January 2019, the company stated that Greencross and TPG BidCo are not aware of any conditions that may impact the fulfillment of any of the remaining Conditions Precedent of the Scheme Implementation Agreement.

The company’s Scheme Meeting is scheduled to be held on 6 February 2019 at Northside Conference Centre, New South Wales. Further, the company assured that in case of any material change, shareholders would be informed through an announcement to ASX.

On the financial performance front, a specialist pet care provider Greencross Limited reported the sales revenue of $878.7 million in FY18, up 7.5% on prior year. It reflects strong like-for-like sales growth of 5.1% in the company’s Australian retail business driven by the 3.1% like-for-like transaction growth. The gross margin of the company inclined by 90 bps to 56.3% reportedly driven by the higher gross margin across all divisions.

As per the company’s 2018 Annual Report, its Australian online retail sales increased by 70% to $20 million in Fiscal 2018 on the back of continued growth in click and collect transaction that underscores the company’s 50% of online transactions. The Australian Vet revenue was reported to be increased by 12%.

During the Fiscal 2018, there has been a decline of $5 million in Australian Vet Underlying EBITDA which is reported to be driven by $0.6 million short term earnings impact of the rollout of its immature in-store clinics. Group’s New Zealand business delivered 11% growth in revenue of $114.5 million in FY18.

The company reported a 6.4% decline in EBITDA to $97.6 million which led the Group underlying EBITDA margin to dip to 11.1%. Group’s NPAT attributable to shareholders decreased by 51% to $20.7 million inclusive of non-cash exceptional items.

The Directors announced the fully franked final dividend of 5.5 cents per share that took the FY18’s total dividend to 15.5 cents per share fully franked.  

Looking into Full Fiscal Year 2019, Greencross targets to reduce its total capital expenditure to approximately $50 million while maintaining the pace of its strategic expansion of integrated networks. Further, the company targets the operating cost savings to between $10 million and $13 million.

In today’s trading session, GXL stock price has plunged by 0.181% or $0.010 (as at 12:50 PM, 31 June 2018). The stock is trading at a Price to Earnings ratio of 31.450 x with a market capitalization of $663. 75 million. Over the past 12 months, the stock has witnessed a negative performance change of 13.91% despite a massive upside price movement of +20.83% over the last three months. 


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