For most pet owners, there is no price too dear for their animal healthcare but with an opportunity to reduce annual expenses most have quickly signed up to the Best Mates program run by Apiam Animal Health (ASX: AHX) as soon as it becomes available in their clinic for unlimited consultations via an annual subscription fee.
Since being introduced in 2020 across their vet network which now boasts 73 clinic locations around Australia, the Best Mates program has rapidly grown to now have 6,832 members as of March 2022. This represented a 37.5% year-on-year increase and has also been one of the driving forces behind new clinics seeking to join the Apiam network where new clinics have seen an immediate increase in clients upon offering the program.
In the last 9 months alone, Apiam has added 11 clinics to their network by acquisition, complimenting 3 brand new clinics opened in last 15 months in regional growth corridors that have seen an influx of residents during the pandemic.
“A lot of these clinics are now wanting to move into a corporate model where they can get the support around developing the business systems and capturing growth, so they can focus on veterinary services,” said Apiam Managing Director, Dr Chris Richards.
“Our Best Mates program has exceptional uptake and we’ve got about 7.6% of our active patients [on it].
“We’re expecting to be able to grow that based on what some of the other large corporate groups have done up to around 15%. What’s great about this program is when we do make acquisitions or Greenfield clinics, then we can apply this program and we do get some immediate uplift.”
The Best Mates program is offered across Apiam’s network of vet clinics which include their flagship Fur Life Vet brand, as well as acquired clinics which are co-branded with their clinic name upon entering the Apiam network.
For an annual subscription fee of $695 per pet ($595 each year after), owners are able to gain access to unlimited consultations for 12 months which includes microchipping, desexing or dental, vaccinations and blood tests. Members are also given discounts on food, pet products and medications as further benefits that have seen the program grow to almost 7,000 members.
Making the program possible is Apiam’s national network where most services can be integrated using Apiam’s nationwide supply chain where value benefits can be passed on to pet owners. These are just one reason why Apiam has continued to receive ongoing interest from independent clinic owners seeking Apiam’s support services by joining the network.
On top of the marketing, payroll, supply chain and HR services provided by Apiam, clinic owners have seen the organic growth these support services have generated, enabling Dr Richards to announce an aggressive growth strategy that will see Apiam double its revenue to $300m by 2024.
“What’s been happening in the industry from a veterinary point of view is that vet clinics have been growing and that growth has been exceptional in some regions,” said Dr Richards.
“But what that’s doing is putting a lot of pressure on veterinary clinics and their ability to resource additional vets, as well as manage that growth.”
“What’s different about Apiam is that rather than just being an aggregator of clinics, we also have a number of services that then lend leverage across that animal footprint within the clinics.
“In this part of the business is our diagnostic lab and pathology services and feed testing and some of the parasitology services which is a growing part of the business that we’re leveraging across those clinics and our client base.”
Alongside the re-opening of international borders, Apiam has recently undertaken an international recruitment drive which has seen experienced vets joining Apiam from the UK and South Africa to help meet surging demand for their services.
For the half year ended 31 December 2021, Apiam Animal Health reported a $75.1m in revenue which represented a 22.7% increase on the previous year which delivered gross profit of $46.2m, a 32.5% increase.
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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