Greencross Ltd (ASX: GXL) held it annual general meeting on 2 November 2018 and following that the securities of company were placed in trading halt at the request of GXL, pending the release of an announcement by it. At the Annual General Meeting, the Chairman told the shareholders that FY 2018 was challenging year for the Company and this year the company expanded its integrated pet care platform, achieved strong like for like sales growth and customer metrics in its retail business and invested in the veterinary network through both new in-store clinics and vet acquisitions.
Greencross reported that in FY 2018, the revenue increased by 7.6 percent to $ 878.7 million due to the combination of a 5.4% increase in like for like sales and the contribution of new stores. The company achieved the Underlying EBITDA of $97.6 percent and Underlying EPS of 31.5 cents.
The company delivered strong revenue growth, but its earnings decreased as a result of disappointing results in the veterinary business and its decision to impair the value of some of the assets. The company took decisive action to address the operating performance of the Company by appointing a new leadership team and resetting the cost base of the Company.
The company is planning to expand its range of owned private label brands across all major categories to drive greater customer engagement, increased visit frequency and increased basket value.
The retail business, which comprises over 70% of Group revenue, performed well in FY2018. The Australian and New Zealand retail stores delivered strong top line growth and its private label sales increased to over $115m and private label food sales in Australia have increased by 25%, supported by strong sales of private label Leaps & Bounds pet food. Company’s investment in omnichannel is delivering successful results with click and collect proving very popular. The online sales of the company increased by 70 percent to $20 million in FY 2018. The company is currently having an outstanding and growing customer loyalty base of over 1.9 million active members with more than 90% of retail revenue linked to the Friends for Life program.
The company experienced strong sales momentum in FY 2018 and it has continued with the trend into FY 2019 (17 weeks) with 7.5% top line growth and 4.9% like-for-like (LFL) sales growth. In the last seventeen weeks, the company opened 3 new stores and 2 in-store clinics and it is targeting to open 5 new stores and 10 in-store clinics in FY 2019. Greencross continues to make progress in the delivery of the cost saving. However, the Company does not expect these cost saving initiatives to deliver incremental EBITDA in 1H 2019 due to lower cost capitalization and reinvestment in strategic initiatives.
In the last six months, the share price of the company decreased by 14.98 percent as on 1 November 2018. GXL shares last traded at $4.540 with a market capitalization of $546.9 million as on 2 November 2018. The trading for the stock has been slated by the release of announcement or by November 06, 2018.
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