Pet owners love for ‘fur babies’ knows no limits
ONCE confined to the backyard, pets are increasingly becoming an integral part of our busy lives and animal lovers are dipping into their wallets to ensure their happiness.
Spending on speciality services and products spurred on by the "humanisation" of animals is growing, and more than half of all Australian pet owners consider their furry friend as "part of the family", according to Animal Medicines Australia.
But the petcare industry still has its challenges as highlighted by the mixed profit results posted this week by the two big Queensland-based veterinary companies.
On Friday National Veterinary Care (NVC) posted a 41.9 per cent growth in statutory net profit to $6.23 million, with revenue jumping 26 per cent to $84.2 million for the financial year.
Its bigger rival Greencross on Monday posted a 51 per cent slide in net profit to $20.7 million, largely due to $24.2 million in impairments and other costs.
But it talked up its integrated vet and retail business model and delivered a 7 per cent jump in sales revenue to $878.7 million for the year.
Greencross chief executive Simon Hickey said the performance of the company's veterinary business during the past year had been "disappointing", but initiatives were in place to boost growth. "We are taking the first steps in modernising the delivery of our vet services through implementing extended hours, mobile vet, telemedicine and team-based medicine," he said.
According to industry research by IBISWorld, Australians fork out about $12 billion a year on petcare and spending per pet is tracking at about 3 per cent a year, which is ahead of inflation. It is a highly fragmented industry, with Greencross holding the largest market share in the veterinary sector at about 7.4 per cent, according to IBISWorld, followed by VetPartners (3.5 per cent) and NVC (2.3 per cent).
Over the past financial NVC has settled 13 acquisitions, taking the total number of clinics to 66 (56 in Australia, and 10 in New Zealand).
NVC chief executive Tomas Steenackers said veterinary services were changing from a model which was traditionally reactive, to proactive, as pet owners become more invested in the health and well-being of their "fur babies".
"Customers are a bit more caring about their pets . . . and are happy to utilise dental services, ultrasounds, pathology, and X-rays when needed - services which are similar for humans," he said. "People see their pets as part of the family."
The company has been championing its Best for Pet wellness program, which has achieved 76 per cent growth over the past 12 months, to more than 18,500 members.
Greencross operates more than 200 retail stores in Australia, and more than 140 in-store and stand-alone vet clinics.
Mr Hickey said these sites represented a unique offering to an "emotionally engaged segment".
Greencross closed 2¢ lower yesterday at $3.98 yesterday, while NVC shares finished at $2.25, up 3¢ or 1.35 per cent.