Veterinary services and petcare retailer Greencross has upgraded its expansion plans as increasing demand for its "one-stop shop" offering helps lift the group's first-half net profit by 17.2 per cent.
Net profit for the six months to December 31 was $21.9 million, after like-for-like sales lifted 4.3 per cent across the group.
Chief executive Martin Nicholas says the group's double-digit growth in revenue and earnings show that the company's integration strategy - locating as many vet clinics and petcare outlets in the same place as possible - is working.
Greencross intends to accelerate the number of new clinics and retail outlets that it opens over the full financial year, especially in-store clinics which it says deliver superior economic returns.
"I look at ourselves effectively as a combination of a grocery and pharmacy channel for animals," Mr Nicolas said on Tuesday.
"In other words: there's a large staple component to our business.
"So, as far as network capacity is concerned, I think it's more relevant to compare us with grocery or pharmacy stores than other more discretionary retail formats in terms of the optimum number of stores in the Australia and New Zealand market."
Greencross added 16 stores to its retail network - under the Petbarn, City Farmers and Animates banners - in the first half to bring the total to 237.
Strong revenue growth from services such as grooming, dog wash and obedience training, and record sales of dog and cat food drove like-for-like sales growth of 4.0 per cent across the retail operations.
"Following a strong first half, Greencross has upgraded its FY2017 full-year network expansion target to 21 stores," Mr Nicholas said.
Greencross opened 10 vet clinics in the first half to bring the total to 164.
The veterinary division lifted like-for-like sales by 5.3 per cent, driven by a rapid ramp-up in visits to the group's in-store clinics and cross-referrals from the retail stores.
Greencross added seven in-store clinics in the first half and one in-store clinic in the current half to bring the number of veterinary clinics inside retail outlets to 25.
"I am pleased to confirm that Greencross has now upgraded its FY2017 full-year expansion target to 16 in-store clinics," Mr Nicholas said.
Mr Nicholas said Greencross could comfortably fit an in-store clinic into 60 per cent of its store fleet.
Greencross expects full-year growth in group underlying earnings and net profit growth similar to that of 2016.
"We have a significant and healthy growth runway ahead of us," Mr Nicholas said.
Greencross shares were 38 cents, or 5.73 per cent, higher at $7.01 at 1228 AEDT.
GREENCROSS TO KEEP EXPANDING AS PROFIT LIFTS
* First-half net profit up 17.2pct to $21.9m
* Revenue up 13.7pct to $412.3m
* Interim dividend up 0.5 cents to 9.5 cents, fully franked
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