Further consolidating their position as the largest operator of regional veterinary clinics, Apiam Animal Health (ASX: AHX) is continuing its acquisition spree with Harbour City Veterinary Surgery the latest to join their network at a time when pet ownership has soared.
The clinic is located in Gladstone, Queensland, which is a rapidly growing town south-east of Rockhampton with a focus on domestic pets. It comes at a time when Australians have turned to animal companions more than ever before with a recent survey from Animal Medicines Australia (AMA) reporting 6.8 million Aussie households now own a pet, 15% more than pre-pandemic.
“The acquisition of Harbour City Vets supports our regional growth plans, taking us into a location we believe offer us strategic advantages,” said Apiam Managing Director, Dr Chris Richards.
“The clinic services the attractive and fast-growth companion animal segment, an area that is delivering significant growth for our business as we continue to capture market share.”
Acquired for $1.96m cash and $0.84m in AHX shares (half escrowed for 12 months, half for 24 months), Harbour City Vets adds $2.34m revenue to Apiam on a FY21 pro forma basis and expected to settle on 31 August 2021. The clinic employs five veterinarians and eight support staff.
Once settled, Apiam will commence the integration process which will include marketing support services and offering the Best Mates program where pet owners can become members for unlimited consultations.
The program has been hugely popular in the southern states to now boast more than 5,000 members, a number that continues to rise as more pet owners realise the cost savings of membership.
The addition of Harbour City follows similar acquisitions made earlier in the month by Apiam which acquired animal health clinics on the fringes of Geelong and Ballarat – the two biggest regional hubs in Victoria by population.
As long-time experts in regional animal health, Apiam’s primary business had previously focused on livestock animals. But such rapid growth in the companion animal market has created lucrative opportunities that capitalise on their existing infrastructure and diversify their species mix. Growth into the companion animal market has enabled Apiam to extend their ancillary services that include pathology, vaccinations, animal health products and tele-triage which has led to new enquiries from clinic owners interested in joining the Apiam network.
According to the AMA report, Australia’s total annual spend on dogs is $20.5 billion on dogs and $10.2 billion on cats which covers food, veterinary care and health care products.
For the Half Year ended 31 December 2020, Apiam reported an 8.9% increase in revenue to $61.2m with a 53.8% increase in NPAT to $2.6m. The Company will be reporting their Full Year results on 30 August 2021 and invites investors to register for their online results presentation here.
*Owners of this website are AHX shareholders
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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