In the lead up to the Melbourne Cup, it’s likely you’ll be hearing the name Incentivise, a horse who has stormed to Cup favouritism after his dominant win in the Caulfield Cup.
But well before his Group 1 winning accolades were achieved, the boom horse’s humble beginnings trace back to Southern Queensland, a horse racing region that has been put on the map courtesy of Incentivise’s deeds.
While there are few racing participants that will achieve the amount of success breeder-owner Steven Tregea has with Incentivise who he bred himself, the horse’s success has highlighted the huge commercial market that Queensland has created.
Bred by Tregea under his Windemere Stud banner, Incentivise looked like any ol’ nag in March 2021 when beaten 16 lengths at a Toowoomba maiden.
Fast forward 8 months, and the horse has won 9 consecutive races which include three Group 1s that have come under the guidance of Queenslander-turned-Victorian trainer Peter Moody who was tasked with managing Incentivise’s Melbourne Cup campaign.
So how is it that the horse at the top of Australian racing is a Queenslander when New South Wales and Victoria are the larger equine markets?
It all comes down to the huge rise of racing and breeding in Queensland that has seen the industry undergo a major commercial transformation over the past five years, bringing with it major global players investing in the State’s gene pool and profile. And it’s not just the horses cashing in. It’s all industry participants from the boom in employment and service providers such as vets, feed suppliers and transportation businesses.
In June 2021, Apiam Animal Health (ASX: AHX), Australia’s largest supplier of regional veterinary services, made a big splash in Queensland when acquiring equine business Scenic Rim Vets for $16m as their third major equine hub, and first outside of Victoria. This included two clinics which employed 13 veterinarians and a support team which has established Scenic Rim Vets as one of the largest providers of equine veterinary services in Queensland which includes the Darling Downs region where Incentivise was bred.
It follows the growth observed in recent years in their Victorian equine businesses in Warrnambool and Gippsland.
“Having monitored the continued investment in Queensland’s racing industry in recent years, the Scenic Rim and Darling Downs regions were always high on Apiam’s list of expansion targets,” said Apiam Managing Director, Dr Chris Richards.
“While it is one of Queensland’s largest thoroughbred breeding regions, there is also a very large market for standardbreds and quarter horses there too which our team of vets service.
“In the years ahead, we’re expecting to see further growth in the Queensland equine market where Apiam provides animal health services to some of the State’s largest breeding operations.”
While all eyes are currently on Melbourne’s Spring Racing carnival, the equine breeding industry is in full swing. The Australian broodmare band commenced foaling in August and Stallion covers in September with Apiam having strategically settled its Scenic Rim acquisition prior to the start of breeding season.
Due to the timing of the financial reporting season, little of this was captured in their FY21 results when Apiam reported a 6.6% increase in revenue to $126.2m and 24.1% increase in net profit after tax to $5.1m.
In addition to their major equine hub at Scenic Rim, Apiam also acquired smaller veterinary businesses that service the equine industry in Samford Valley, Clermont, Dalby and Tara as part of their Queensland expansion.
Earlier in the year, Racing Queensland confirmed a $29m boost in prize money which will take the State’s total owner returns past $200m for the first time. Chasing a slice of this, top Sydney trainers Chris Waller and Kris Lees have set up Queensland-based stables. Other big coups for Queensland racing include Hall of Fame trainers Lee Freedman and John Moore electing to set up their stables in Queensland over the past 12 months following returns from Singapore and Hong Kong respectively.
On the breeding side, Hong Kong businessman Tony Fung entered the Australian Thoroughbred market in 2015 when purchasing Patinack Farm in Queensland’s Scenic Rim. He then re-named it Aquis Farm which has emerged as Australia’s third largest breeding and racing operation.
Come January, many Queensland breeders will be sending their yearlings to the Magic Millions Gold Coast Sale which in 2021 had an average yearling sale price of $252,101.
In times of gold rush, it is often said “you want to be the guy selling the shovels” and that is exactly what Apiam is doing with their Queensland expansion as the State seeks to produce its next Incentivise.
In September 2021, Emerald Financial released an Analyst Report on Apiam Animal Health which can be accessed here.
Alfred Chan is a Business Reporter at The Sentiment specialising in ASX-listed small cap companies, a bloodstock enthusiast and former equities analyst.
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