Transcription of Greencross Limited
1 Greencross LimitedAnnual Report - 30 June 2013 ABN 58 119 778 862 Page124627283738394142108109111 Directors' reportAuditor's independence declarationCorporate Governance StatementStatement of cash flowsShareholder informationStatement of changes in equityNotes to the financial statementsDirectors' declarationIndependent auditor's report to the members of Greencross LimitedContentsFinancial reportStatement of profit or loss and other comprehensive incomeStatement of financial positionManaging Director's reportCorporate directoryChairman's reportGreencross LimitedContents30 June 2013 Fax: (02) 9279 0664 Solicitors123 Eagle Street15/270 Adelaide StreetWoolloongabba QLD 4102PO Box 8366 Woolloongabba QLD 4102 DirectorsCompany secretaryNotice of annual general Queen StreetGreencross Limited shares are listed on the Australian Securities Exchange (ASX code: GXL)WebsiteStock exchange listingBankersTel: (02) 9290 9600207 Kent StreetLevel 7 Boardroom Pty LimitedWoolloongabba QLD 4102 Postal addressFax: (07) 3435 3536 Tel: (07) 3435 3535 Brisbane QLD 4000 Commonwealth Bank of AustraliaSydney NSW 2000 PricewaterhouseCoopersAuditorLevel 15 Rostron Carlyle SolicitorsBrisbane QLD 40005/28 Balaclava Streetdatetime Principal place of businessRegistered officeShare registerTel: (07) 3435 3535 Fax.
2 (07) 3435 3536 Greencross Limited30 June 2013 Corporate directoryWesley CooteBrisbane QLD 4001 The annual general meeting of Greencross Limited :will be held atTBA 5/28 Balaclava Street11:00 AMWednesday 30 October 2013 Andrew Geddes - ChairmanDr Glen Richards - Managing DirectorDr John Odlum - Executive DirectorJeffrey David - Independent Non-Executive DirectorStuart James - Independent Non-Executive Director1 Greencross Limited Chairman s report For the financial year ended 30 June 2013 PERFORMANCE HIGHLIGHTS The Board and Management Team of Greencross Limited ( Greencross or the company ) are delighted to report a strong result for the financial year ending 30 June 2013. Some of the highlights of the financial results are as follows: Revenue for the group was $ million, up on the prior reported period; Underlying earnings before interest and tax ( EBIT ) was $ million, up on the prior reported period; Underlying net profit after tax ( NPAT ) was $ million, up on the prior reported period; Underlying earnings per share ( EPS ) was $ per share, up on the prior reported period; Operating Cash Flows was $ million, up on the prior reported period; Same clinic revenue and EBIT growth for the year of and respectively; and Healthy Pets Plus members had reached 14,000 members within its first full 12 months.
3 The Board is happy with the results achieved for the year and believe the company is well positioned to continue to deliver these kinds of financial results going forward. A capital raising of $ million in February 2013 assisted in the funding of a larger acquisition in Sydney with $ million applied to the Ku-Ring-Gai acquisition. Due to the way acquisitions land, the unutilised funds diluted earnings per share in FY2013. Six acquisitions have been made since mid- June and acquisitions will continue at a disciplined rate through FY 2014. The board expects EPS growth to exceed FY2013 in this financial year. ACQUISITION HIGHLIGHTS Greencross made the following acquisition during the year and since the year-end: 1. Kilsyth Veterinary Clinic 2. Eastwood House Veterinary Surgery 3.
4 Clifford Park Veterinary Surgery 4. Silkstone Veterinary Hospital 5. Anvet Coomera Surgery 6. The Vets Australia Helensvale 7. The Vets Australia Nerang 8. The Vets Australia Robina 9. Paradise Veterinary Hospital 10. Ku-Ring-Gai Veterinary Hospital 11. Roseville Veterinary Hospital 12. Strathalbyn Veterinary Clinic 13. The Pet Cemetery and Crematorium Greenbank 14. Armidale Veterinary Hospital 15. Uralla Veterinary Clinic 16. Glen Eira Veterinary Hospital (Settled 23 July 2013) 17. Warringal Veterinary Hospital (Settled 23 July 2013) 18. Tanilba Bay Veterinary Clinic (Settled 30 July 2013) 19. Pets Eternal Crematorium (Settled 1 August 2013) Furthermore, Greencross opened a new state of the art veterinary hospital at Morayfield in Queensland in April 2013. This new clinic has outperformed Directors expectations and is now expected to deliver revenue for FY2014 of approximately $ million.
5 The Board is pleased with the progress of this clinic and four further sites have been identified in which new veterinary clinics will be established over the next 6 months. This includes the scheduled opening of a new veterinary hospital at Strathfield in Sydney in September 2013. The company established veterinary pathology laboratories in both Melbourne and Brisbane during the year. The Melbourne pathology laboratory was opened in September 2012 while the Brisbane pathology laboratory opened in February 2013. However, a number of operational delays hindered the start-up phase of these businesses and operational expenses, which could not be capitalised for accounting purposes, were incurred until April 2013. Both businesses are now fully functional and revenue has grown between April 2013 and July 2013 by approximately In addition, the company is in the process of finalising a deal which will see it partner with a human pathology laboratory in Sydney.
6 This will ensure the company has full coverage in regards to veterinary pathology services along the east coast of Australia. 2 Greencross Limited Chairman s report For the financial year ended 30 June 2013 The company purchased the remaining 51% of share in Care Veterinary Group Pty Ltd and the remaining 37% of the share in Greencross Vets South Coast Pty Ltd during the year. The company now owns 100% of both entities. Furthermore, the company purchased a further 39% of Pet Accident and Emergency Centre Pty Ltd, taking its total ownership to 90%. The combination of the new acquisitions and start-ups are expected to deliver annualised revenue and EBIT for the group of approximately $ and $ respectively. ACQUISITION FUNDING As already stated, on 28 February 2013 the company raised $ million through a share placement to institutional and sophisticated investors.
7 $ million was deployed for the Ku-Ring-Gai acquisition on 28 February 2013, with the remaining funds raised yet to be fully utilised to assist future acquisition growth. At year end the company had cash on hand of approximately $ with an unutilised acquisition funding facility with the Commonwealth Bank of Australia of approximately $ The funds will be utilised as the company continues to target, as a minimum, twelve new acquisitions per year. The company will continue to fund new acquisitions through a mix of debt, free cash and vendor deferred payments. The company is now utilising less debt, and more free cash, when funding its stated acquisition growth strategy. This will see gearing (Net Debt/Equity) remain around the 55% - 65% in the short to medium term. Moreover, the company is rapidly moving towards self-funding future acquisitions which will see the stated acquisition growth rate funding completely through free cash and vendor deferred payments.
8 Once this occurs, gearing is expected to reduce to the company s long term target of less than 50%. DEDICATED STAFF Greencross currently employs over 1,200 highly skilled, talented and dedicated vets, nurse and support staff. The exemplarily results achieved by the company over the last couple of years are a credit to all the hard work and levels of engagement of all staff within the Greencross . On behalf of the Board, I would like to thank all team members for their hard work and dedication. The commitment and passion shown by all staff ensures Greencross can continue to deliver per stakeholders expectations and ensures the continued success of Greencross . SHAREHOLDERS RETURN This financial year shareholders have already received a fully franked interim dividend of 5 cents per share.
9 Furthermore, a final dividend of 5 cents per share has been recommended by the Board and is expected to be paid on 16 September 2013. This represents a total fully franked dividend of 10 cents per share and a dividend payout ratio of approximately 54% for the year, based on underlying NPAT. This is up 20% on the previous year s dividend of 8 cents per share. The company has in place a Dividend Reinvestment Plan ( DRP ) which will balance the need for shareholders to receive a return via a dividend and the company s need for cash to fund future acquisitions. The Board continues to monitor the company s strategic plan to ensure solid organic management continues to be achieved, acquisitions execution and integration occurs in a timely manner and the best use of the shareholders funds occurs and the greatest returns on capital employed is achieved.
10 Andrew Geddes Chairman 3 Greencross Limited Managing Director s report For the financial year ended 30 June 2013 Innovative Greencross Outperforms the Veterinary Industry Our vision for a network of exceptional veterinary businesses across Australia continues to be realised. As well as expanding our footprint further across Australia with the addition of another 13 general practices (12 acquired and one new to industry), Greencross Limited ( Greencross ) continue expansion into vertical businesses with the opening of two pathology laboratories and the acquisition of two crematoria. Greencross is continually working on team and client engagement through innovative strategies such as our Healthy Pets Plus proactive health care plans, benchmarking and coaching activity, the use of social media and electronic direct mail, client and team surveys and Net Promoter Score programs, remuneration and reward programs, supply chain partnerships and education programs to deliver exceptional like for like growth ( revenue and EBIT like for like growth).
