With a drama filled weekend that resulted in the relocation of several AFL and NRL matches rescheduled in response to snap lockdowns, one sport remains consistent as a rock and a money spinner for Governments, having thrived since the start of the pandemic – horse racing.
At the same time as a mass exodus from Queensland was taking place for other sports, race meetings progressed on Saturday at Eagle Farm, Gold Coast, Townsville, Toowoomba and Goondiwindi. Between them, racing facilitated the employment of thousands and provided the State Government with crucial wagering turnover to assist with costly expenses that have been brought upon by the pandemic’s disruption.
Its just one example of why the Queensland Government committed an additional $15.5 million of funding in December 2020 to the racing industry.
“With more than 12,500 Queenslanders now employed in racing – an increase of more than 1,000 over the past two years – the Queensland racing industry continues to make a significant contribution to the state’s economy,” said Racing Minister, Grace Grace at the time.
For national veterinary operator Apiam Animal Health (ASX: AHX), the pandemic has resulted in major growth of their services from within the horse racing industry and the personal companion market, as locked down Australians turn to pets for companionship.
Queensland alone has been a major market of growth for Apiam, today settling their recent acquisition of Scenic Rim Vets which includes a clinic and hospital that are one of Queensland’s largest providers for racing and breeding vet services.
“We are pleased to have completed the Scenic Rim Vets acquisition and look forward to integrating the skills and expertise of our respective businesses,” said Apiam Managing Director, Chris Richards.
“We have materially expanded our Queensland presence in the past few months, more than doubling the number of clinics, and we see this region as an attractive growth opportunity for our Company, particularly as regional and rural veterinary markets continue to perform strongly”.
Alongside the three other Queensland veterinary businesses acquired in recent months, Apiam’s round of acquisitions will increase its annual revenue by $16.9 million and EBITDA by $3.82 million for a total purchase of $22.3m.
Core to those acquisitions will be the opportunity to integrate their existing customer bases into Apiam’s existing businesses that provide secondary services to animal owners. These include pathology services, animal health products and national support such as marketing and telehealth.
With Scenic Rim Vets being a leader in Queensland veterinary services, other clinics within the Apiam network will also gain access to some of the top equine reproduction and surgical veterinarians in the State as a big win for existing Apiam customers.
For the Half Year ended 31 December 2020, Apiam reported an 8.9% increase in revenue to $61.2m and 53.8% increase in NPAT to $2.6m.
As business thrives amid rising demand in the personal companion market and State Governments pumping money into horse racing through the pandemic, Apiam has capitalised on the market and is showing no signs of slowing.
Since 2017, the Queensland Government has grown returns to participants from $174 million to $223 million under the State’s Industry Investment Plan which is just one reason more trainers, jockeys and breeders have moved their operations from Victoria and New South Wales in recent years. The State expects to realise $250 million in returns as part of their growth initiatives to support the 112 towns in Queensland that engage racing and breeding.
Apiam Animal Health is expected to deliver their Full Year results later in the month.
*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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