Greencross looks like it could be abit like ABS Learning, its got the same sort of growth plans ahead.


Pets big business

TONY RAGGATT

02May07

A VETERINARY practice model which started in the dog heaven of Currajong is headed for the national stage.

The Greencross vet group managed under the skilful eye of award-winning business operator and vet Dr Glen Richards is going public and aims to list on the Australian Stock Exchange in the middle of next month.

Dr Richards and stockbrokers from Sydney firm Bell Potter Securities were in the city last night to launch the proposal to potential Townsville investors.

A prospectus offering shares at a $1 each and forecasting earnings of 9.4c per share in 2008 is due to be released later this week.

"I feel we are creating a vehicle that is going to be great for investors and great for our clients and patient care," Dr Richards said.

"The most important aspect is that it will also be a vehicle that is going to be great for our staff."

Greencross Veterinarians began when Dr Richards, the son of cattle and sheep graziers Neil and Sandra Richards from Richmond, bought the former Currajong veterinary hospital in 1994.

The business has since been developed into five Townsville practices and, in a management relationship with Dr Richards' colleagues in Brisbane, another 10 practices trading under the Greencross model and brand.

Under planned acquisitions, another 15 practices and a specialist veterinary centre are to be added to the group, providing a total of 31 outlets in Townsville, Brisbane, the Gold Coast, Melbourne and Adelaide, creating an enterprise estimated to be worth about $35 million.

Dr Richards said the Greencross brand would be launched nationally with plans to quickly add practices to the group.

"We plan to have 150 vet practices in five years," he said.

"There's over a thousand (practices) in Australia that fit our investment criteria with turnover of $800,000 or more per practice."

Dr Richards believed the timing was right to take the model to the market, with many practices owned by ageing vets looking for appropriate succession plans and with many of the vets graduating from universities, mostly women, without the cash or willingness to take on the $500,000 investment required for practices.

He said Greencross could provide the management expertise, equipment support and career paths the vets and their staff needed to get on with the job.

The group could also provide better supply chains and strike better margins for inventories which represent much of the practices' income.

Dr Richards is set to be managing director of Greencross Limited, based in Brisbane, with a board including Count Financial director Andrew Geddes, vet and Greencross Veterinary Hospitals director John Odlum and PetsFirst CEO Associate Professor Stephen Coles.

Greencross is looking to raise $11 million from the float, creating a group with a market capitalisation of $21.5 million and an enterprise value of $35.3 million.

A price to earning ratio for 2008 has been calculated at 10.7 per share.

If all goes to plan, Greencross will list on June 15 and will follow in the footsteps of another successful Townsville venture, 1300 Smiles Ltd, a dental practice management model paying good returns, which has expanded throughout Queensland since listing on the exchange about two years ago.