NVC PLAYS A DIFFERENT GAME, AND WINS
Written on the 27 February 2017 by Laura Daquino
AS its profits rise, National Veterinary Care's (ASX: NVL) focus on training over retail is proving to be a winning strategy.
Managing director Tomas Steenackers says NVC, which is a healthcare conglomerate of vet clinics across Australia and New Zealand, is 'well placed to deliver shareholder value in H2FY2017 and beyond'.
In one year, NVC's share price has grown by $1 to around $2.20 today.
NVC acquired nine veterinary practices during the half year to December. The company's initial portfolio of clinics grew organic revenue by 3.75 per cent in these six months.
NVC's 41 clinics produced a statutory profit after tax of $2.6 million for the period, up from a loss of $302,000 the prior corresponding period.
The founding team hail from consumer companies including Greencross (ASX: GXL) and G8 Education (ASX: GEM) and are targeting a three-tier growth strategy to increase market share.
First, NVC is focused on organic growth of veterinary services, then acquisitive growth 'to address the fragmented nature of the industry', and finally, the company has identified 'significant opportunity' to grow its management and procurement units by leveraging things like buying power and its Centre of Excellence Training Academy.
Steenackers says NVC's training academy is already adding value, and while the company isn't training vets from its more retail-focused competitor Greencross - 'who didn't want to take the offer on board' - it has attracted corporations like the University of Sydney.
"We open it up to everyone in Australia and soon New Zealand, and 50 per cent of people coming through are non-NVC," Steenackers tells Business News Australia.
"We come in with really low prices and can guarantee to improve skills within one day or one week. We are a corporate but care about progressing the industry in the right way, even if [the training academy] doesn't lead to acquisitions, it's about progressing the industry over time."
NVC has 54 workshops planned at its purpose-built training facilities the near future. On top of its original training facility, a new site in Melbourne will service vets in South Australia and Tasmania, and the company is looking to open a facility in New Zealand next year too.
Steenackers is partly attributing organic revenue growth to NVC's Best for Pet wellness program, launched November 2015. The program currently has 9000 members, rewarding pet owners for undertaking preventative healthcare for their animals.
Steenackers likens using the program to visiting the dentist for a regular checkup, rather than waiting years when there's bound to be problems.
NVC is forecasting it will have 10,000 pet owners on its Best for Pet books by the end of this financial year.
If all proposed acquisitions go to plan by April 30, the company will also soon increase its clinic count from 41 to 54.
NVC has provided guidance for statutory revenue growth to be greater than 20 per cent above its pro-forma FY2016 revenue of $53.8 million.