Greencross Limited

GXL Details

Greencross Limited (ASX: GXL) has suspended the operation of its dividend reinvestment plan (DRP) until further notice, and the DRP will not apply to the upcoming final dividend for FY2017. Recently, Animates (Company operates under the brand name of Animates in New Zealand) has completed the acquisition of four veterinary clinics in Auckland for cash consideration of NZ$4.1 million, and these clinics are located inside the Animates retail stores at Botany, Glenfield, Henderson and Takanini. The clinics are expected to contribute annualized revenue of over NZ$3.3 million and annualized EBITDA of approximately NZ$0.6 million. Following the acquisition, currently, Animates network in New Zealand comprises 15 veterinary clinics and 39 retail stores. In addition to the 4 in-store clinics acquired in Auckland, the company has opened 8 in-store clinics in FY2017, while 10 in-store clinics under construction. As a result, Greencross now expects to add a total of 22 in-store clinics to its network in FY2017, which will bring the total number of in-store clinics across Australia and New Zealand to 39. The company continues to expect strong cashflow conversion in FY2017 with underlying EBITDA and NPAT growth at similar levels to FY2016. Given the modest performance despite increasing competition during H1FY17, we maintain a “Buy” rating on the stock at the current market price of $6.26


GXL Daily chart; (Source: Thomson Reuters)

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