GXL Greencross Limited/ Veterinarians

[Lizard]

What do you mean by a roll up model Lizard?

Cheers
4be

Hi 4be,

Just referring to the type of business that grows by acquiring existing businesses - often in the professional services sector. This sort of model has its peculiar risks - seen some spectacular failures - but can make good money for holders in the good patches.

[4be]

Hi 4be,

Just referring to the type of business that grows by acquiring existing businesses - often in the professional services sector. This sort of model has its peculiar risks - seen some spectacular failures - but can make good money for holders in the good patches.

Oh yeah cheers Lizard.

I am a holder of these since before divy. I am a pet owner so I know the cost involved in keeping them healthy! I like this company b/c of its growth but also defensive qualitys - debt does worry me abit tho. I contemplated getting out a few days ago b/c of the weak market and if greencross breaches 1.00 id be worried- i don't want to go down with the ship.

[Lizard]

Up 6cps to $1.35 today on no news. New high, I think. Not bad in this market.

[percy]

Up 6cps to $1.35 today on no news. New high, I think. Not bad in this market.

Very much enjoying the ride thanks Lizard.

[mark100]

I sold too early...don't like hanging around too long in this market

[Lizard]

Seems to be holding up well, but I have sold two-thirds at $1.40.

Still think they will be fine - and bearing in mind that the MD needs the s.p. at about $1.70 in around July (from memory) for his shares to vest...but planning to re-deploy funds elsewhere as the value gap has closed here.

[Lizard]

Strong result for GXL and forecasting $4.6 - $4.9m NPAT for the year (coming in at high end so far, but it can be a bit seasonal). Div up - now 4cps for the half.

MD should almost certainly hit his $1.77 s.p. target for July and 1st tranche of performance shares will vest... better go back and see what next year's target was... $2.40 from memory.

(currently $1.66)

[h2so4]

It seems to me they will do it easily. Looks like a much more profitable business now.

[Lizard]

Dropped back to $1.03 after going ex-dividend. Briefing today sparked a little interest, confirming they are well on track for at least a 15% increase in eps this year and planning 7cps in total divs.

I have to admit I'm surprised that a year later they are at $2.57, having achieved eps growth of 40%. It was a good ride and I got out at around $2.

They seem to be ticking along, running the model very well. However, the value gap that was evident last year has now closed, so the share price trend will have to slow. They're forecasting at least 15% growth in eps again this year - achieving 40% probably tougher off this higher base. If shares stay up here though, it may be worth either using an equity component in acquisitions or running a rights issue/cap raising to support future growth.

[h2so4]

Agree the value gap has closed, margins have dropped a bit but still a very profitable business. I think they will turn in another good year.