# GXL - Greencross Limited



## System (19 July 2010)

Greencross Limited (GXL) is an Australian-based veterinary services company through the acquisition and integration of 43 practices around the country.

http://www.greencrossvet.com.au


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## DVEOUS (29 July 2010)

*Re: GXL - Greencross*

So what's with the trading halt?

I only bought 1,100 shares last year for the 10% share holder discount at my local GXL vet... so I haven't really followed the company that closely.


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## robusta (14 September 2012)

*Re: GXL - Greencross*

Now I am curious, GXL emerged today as a substantial holder of a very illiquid business I have in my portfolio. KAM, I will have to do some digging and see what the go is. Looked at GXL a while ago but the debt scared me away.


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## McLovin (14 September 2012)

*Re: GXL - Greencross*

Interesting. I had a look at GXL about six months ago, it just seemed like a mini-ABC. From what i wrote at the time: NPAT had grown 35% but EPS only 5.5%. It's a low growth industry. They have made some claims about being able to extract savings by centralising buying but it hasn't really materialised yet. Payroll costs were rising as % of revenue. I guess they are trying to sell it as sort of steady earning industry that can wear higher debts. Anecdotally, from what I saw online, they are also more expenisve than most other vets.

Based on that I avoided. I haven't seen this year's report. I'll have to have a look.


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## Vader (14 September 2012)

*Re: GXL - Greencross*



robusta said:


> Now I am curious, GXL emerged today as a substantial holder of a very illiquid business I have in my portfolio. KAM, I will have to do some digging and see what the go is. Looked at GXL a while ago but the debt scared me away.




Other way around Robusta... KAM now own 5% of GXL.


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## robusta (14 September 2012)

*Re: GXL - Greencross*



Vader said:


> Other way around Robusta... KAM now own 5% of GXL.




My bad that does make more sense. May be worth me looking at this business again however.


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## Vader (14 September 2012)

*Re: GXL - Greencross*



McLovin said:


> Interesting. I had a look at GXL about six months ago, it just seemed like a mini-ABC. From what i wrote at the time: NPAT had grown 35% but EPS only 5.5%. It's a low growth industry. They have made some claims about being able to extract savings by centralising buying but it hasn't really materialised yet. Payroll costs were rising as % of revenue. I guess they are trying to sell it as sort of steady earning industry that can wear higher debts. Anecdotally, from what I saw online, they are also more expenisve than most other vets.
> 
> Based on that I avoided. I haven't seen this year's report. I'll have to have a look.




FY12 figures were NPAT +40%, EPS +35% (forecast of +15% for FY13)

Net debt to equity of 80%, so it's not quite in the ABC territory... not yet anyway. I hold some at the moment (up just over 11% in the short time I've held it)... but yes, I did notice the ABC parallels too.

They are looking at adding approx 12 vet practices a year to their group, so definitely need to keep an eye on performance, net debt etc.

...also (for what it's worth) got a shareholder benefits card from them a few days ago to, anyone with more than 1000 shares gets 10% discount on all vet services, products and retail items at any of their practices.


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## McLovin (16 September 2012)

*Re: GXL - Greencross*



Vader said:


> FY12 figures were NPAT +40%, EPS +35% (forecast of +15% for FY13)
> 
> Net debt to equity of 80%, so it's not quite in the ABC territory... not yet anyway. I hold some at the moment (up just over 11% in the short time I've held it)... but yes, I did notice the ABC parallels too.
> 
> ...




This year's result doesn't look that crash hot either. Debt up by 50%, interest coverage is now just a shade over 3x. Payroll costs as % of revenue continue to rise. How much of the EPS gain can be attributed to using debt to fund acquisitions this year, rather than equity?

They don't actually seem to be getting ahead with all these purchases, just building a bigger empire. And the PE of 16 makes me dizzy.

 My.


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## Ves (16 September 2012)

*Re: GXL - Greencross*

The debt is way too high for me.   It's about 3x  EBITDA. And the interest coverage is pretty tight as McLovin said, which may be OK in an environment with lowering interest rates, but they can go up pretty quickly without warning if the economy does a u-turn.

Looking at the investor presentation organic revenue growth was 1%.  I don't see why you would pay 6 times earnings for this business because they rely on acquisitions (funded by debt moreso than cash flow) to fuel earnings growth  & it has no obvious competitive advantage.  The business model could be especially dangerous in a heavily regulated industry like this one.

edit:  Also watch out for the deferred settlement of practice acquisitions.  This went up substantially last year and it looks like they plan to purchase many more so it has not yet peaked.


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## Ves (16 September 2012)

*Re: GXL - Greencross*

As an aside, what happens to the previous practice owners once GXL owns these practices?  We take our dog to one of the local vets because we like the way they care for him.  I think there is a valid concern if the previous vets / owners do not continue working in the practices that GXL has sold... there is a lot of "human goodwill" in this industry.


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## Vader (16 September 2012)

*Re: GXL - Greencross*

Point(s) taken guys... they expect the level of debt to grow over the next 6 months before free cash flow starts to overtake it - so will definitely be keeping an eye on that.

...and I completely agree that if we get serious problems with the economy (more serious than we've already got, lol), then they could find themselves in big trouble really fast.

$2.35 was my entry price, and the dividend was paid last week...also got a few of the vets not that far from me, so may even get use from the shareholder discount card. For the time being I'm happy to keep it chugging along, but have a stop in place at $2.49 (just below a group of buy orders) in case things drop back that far.


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## skc (17 September 2012)

*Re: GXL - Greencross*



McLovin said:


> Interesting. I had a look at GXL about six months ago, it just seemed like a mini-ABC.




Sums it up pretty well... but minus the fraud one would hope.

Valuation was pretty attractive 12 months ago when I looked at it. But the empire-building / industry consolidator play rarely works out. Plus I see little synergy in vet practices. 

Re debt... I think vet surgeries are pretty recession-proof, and vets themselves are not that demanding. So may be it can take on higher debt...


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## McLovin (17 September 2012)

*Re: GXL - Greencross*



skc said:


> Sums it up pretty well... but minus the fraud one would hope.




Of course. And lest I have the company trying to track me down to slap a summons on me, I wasn't implying that at all.


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## Vader (17 September 2012)

*Re: GXL - Greencross*



Vader said:


> but have a stop in place at $2.49 (just below a group of buy orders) in case things drop back that far.




Probably not a smart thing to do, but rethinking it all, I've taken the stop away for the moment - the DRP price just paid out was $2.50, so that's probably explaining a bit of the drop in price over the past few days, I'm sure some people are making a quick profit out of that... so unless there is an adverse fundamental change, I'll just keep an eye on things, there still seems to be a fair bit of interest in the stock.


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## Country Lad (12 July 2013)

*Re: GXL - Greencross*

This has given plenty of buy signals on the way up.  I have been stopped out twice before it continued up on its merry way.  This time I may relax the stop a bit.

Cheers
Country Lad


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## craggles123 (20 August 2013)

*Re: GXL - Greencross*

Hi All,

Any of the more experienced have any extra opinions on this company?

Has a reasonable level of debt but seems to be performing reasonably well.

Has been on the up for quite some time, running out of steam maybe?


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## Country Lad (20 August 2013)

*Re: GXL - Greencross*

I was trying to keep an eye on this one today, but a bit difficult to gauge the market sentiment with the bots working overtime.

41.3% of the trades were less than 5 shares.
Only 11.1% of the trades were more than 50 shares.

Cheers
Country Lad


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## Tano (20 August 2013)

*Re: GXL - Greencross*

Where do you get this info from? Is it the market depth? Does market depth also show pre open orders?




Country Lad said:


> I was trying to keep an eye on this one today, but a bit difficult to gauge the market sentiment with the bots working overtime.
> 
> 41.3% of the trades were less than 5 shares.
> Only 11.1% of the trades were more than 50 shares.
> ...


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## Country Lad (21 August 2013)

*Re: GXL - Greencross*



Tano said:


> Where do you get this info from? Is it the market depth? Does market depth also show pre open orders?




The day's sales from the live data system I use.  Yes. it also gives market depth and pre -open.   See the details here.


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## skc (13 September 2013)

*Re: GXL - Greencross*



McLovin said:


> Interesting. I had a look at GXL about six months ago, it just seemed like a mini-ABC. From what i wrote at the time: NPAT had grown 35% but EPS only 5.5%. It's a low growth industry. They have made some claims about being able to extract savings by centralising buying but it hasn't really materialised yet. Payroll costs were rising as % of revenue. I guess they are trying to sell it as sort of steady earning industry that can wear higher debts. Anecdotally, from what I saw online, they are also more expenisve than most other vets.
> 
> Based on that I avoided. I haven't seen this year's report. I'll have to have a look.




12 months on the stock is up 150% to $6. Trades at a lofty PE of 70x reported EPS of 8.54. Management said underlying NPAT was $6.4m so EPS is 17.1c - still 35x.

They said they plan to acquire 1-2 practices per month at EBIT multiples of 3-4.5 times. GXL itself trades at 18x.

Not sure how this disconnect works?!

It's hard to see how one make excess return on GXL at this level.


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## McLovin (16 September 2013)

*Re: GXL - Greencross*



skc said:


> 12 months on the stock is up 150% to $6. Trades at a lofty PE of 70x reported EPS of 8.54. Management said underlying NPAT was $6.4m so EPS is 17.1c - still 35x.
> 
> They said they plan to acquire 1-2 practices per month at EBIT multiples of 3-4.5 times. GXL itself trades at 18x.
> 
> ...




I'm glad I'm not the only one scratching their head over this. Virtually all their growth is from acquisition and acquisitions have been and are more than OCF. It's like the market is ignoring the cost of acquistions and pretending this is all organic growth done on a couple of million bucks capex. How bizarre, how bizarre.

Employee expense still rising, now almost at 50% of revenue. Could this be related to once the old vets retire the cost of getting in a new vet, without a equity stake in the business, isn't as cheap as the business model calls for?


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## skc (16 September 2013)

*Re: GXL - Greencross*



McLovin said:


> I'm glad I'm not the only one scratching their head over this. Virtually all their growth is from acquisition and acquisitions have been and are more than OCF. *It's like the market is ignoring the cost of acquistions and pretending this is all organic growth done on a couple of million bucks capex. *How bizarre, how bizarre.




Spot on. I read a Wilson's report which basically has revenue doubling up in 3 years and EPS pretty much growing inline... when in fact EPS will grow much slower as acquisitions are often equity funded. 



McLovin said:


> Employee expense still rising, now almost at 50% of revenue. Could this be related to once the old vets retire the cost of getting in a new vet, without a equity stake in the business, isn't as cheap as the business model calls for?




It's such a dis-incentive to keep working hard when you get paid out when acquiried. It's a great retirement present / excuse for those who are close. The recent buyout of Sinclair Knight Merz would be a great case study. Buying an engineering consultant which are basically people who could leave any moment... esp the senior partners who on average pocket a few $m. That's not the kind of lump sum that eingeers are used to. Makes you wonder what sort of retention rate they've factored in.


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## odds-on (16 September 2013)

*Re: GXL - Greencross*



skc said:


> It's such a dis-incentive to keep working hard when you get paid out when acquiried. It's a great retirement present / excuse for those who are close. The recent buyout of Sinclair Knight Merz would be a great case study. Buying an engineering consultant which are basically people who could leave any moment... esp the senior partners who on average pocket a few $m. That's not the kind of lump sum that eingeers are used to. Makes you wonder what sort of retention rate they've factored in.




FYI, the retention rate at engineering consultant firms is abysmal. Staff (the grunts) follow the work and $$$. The business model is no different to most other professional services firm i.e. Partner (owns stock, provides “leadership”) => Manager (desperate to own stock, manages "issues") => Grunt (does the work). Zero competitive advantage - more a case of right time, right place and a sharp pencil on the proposal paperwork.


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## skc (16 September 2013)

*Re: GXL - Greencross*



odds-on said:


> FYI, the retention rate at engineering consultant firms is abysmal. Staff (the grunts) follow the work and $$$. The business model is no different to most other professional services firm i.e. Partner (owns stock, provides “leadership”) => Manager (desperate to own stock, manages "issues") => Grunt (does the work). Zero competitive advantage - more a case of right time, right place and a sharp pencil on the proposal paperwork.




Been there myself in my past life so can definitely relate.. although it has been many years since. 

Anyway - that's why I can never understand why someone would acquire an engineering consulting outfit... however, Cardno (CDD) has been doing that for ages so may be it can be made to work.


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## craft (16 September 2013)

*Re: GXL - Greencross*

Earnings accretion growth models like this are ponzi schemes imo.  Works a treat whilst GXL can equity fund at 18X. But when the market price rises falter and people look at the underlying business, still arguably worth around what was paid to vendors(or less)  The price corrects and the earnings differential creating the EPS accretion disappears – further external growth is then reliant on borrowing which is normally maxed out and limited by the low return on asset ratio. OCF certainly can’t maintain previous growth rates, it normally has a hard time covering the interest payments. 

Industry consolidators that don’t suffer a major pull back when the music stops are a rare thing – they must be so much more efficient in operating the business they acquire to justify the higher multiples on an ongoing basis. 

How high will it go – no idea.
When will it end  – no idea.
Ultimate outcome – pretty predictable.


Sometimes it’s hard being a value investor  - the market sirens look real pretty on the surface. But simply, some stocks lend themselves to trading the price some lend themselves to long-term investing. As a longterm investor I don’t see much in GXL I like and that beautiful trending price channel does not change my mind – other than to look for a longer barge pole, or maybe  a mop -  sometimes there’s something in the mopping up.


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## McLovin (16 September 2013)

*Re: GXL - Greencross*



skc said:


> Spot on. I read a Wilson's report which basically has revenue doubling up in 3 years and EPS pretty much growing inline... when in fact EPS will grow much slower as acquisitions are often equity funded.




Wilson like WAM or Wilson HTM?  Geoff Wilson is usually pretty clued up on these sort of things, I couldn't imagine him coming up with those forecasts??





odds-on said:


> FYI, the retention rate at engineering consultant firms is abysmal. Staff (the grunts) follow the work and $$$. The business model is no different to most other professional services firm i.e. Partner (owns stock, provides “leadership”) => Manager (desperate to own stock, manages "issues") => Grunt (does the work). Zero competitive advantage - more a case of right time, right place and a sharp pencil on the proposal paperwork.




I think the same of SGN, even though it's a different industry they constantly need to buy agencies because as soon as they do plenty of the talent will jump ship and the returns will start to diffuse.


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## skc (16 September 2013)

*Re: GXL - Greencross*



McLovin said:


> Wilson like WAM or Wilson HTM?  Geoff Wilson is usually pretty clued up on these sort of things, I couldn't imagine him coming up with those forecasts??




Wilson HTM. Report dated 13 Sept. I just cleared my email trash bin this morning so I can't find the report anymore.


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## McLovin (16 September 2013)

*Re: GXL - Greencross*



skc said:


> Wilson HTM. Report dated 13 Sept. I just cleared my email trash bin this morning so I can't find the report anymore.




Ahh...that makes more sense. Gotta drum up a bit of business!


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## craft (16 September 2013)

*Re: GXL - Greencross*



McLovin said:


> Employee expense still rising, now almost at 50% of revenue. Could this be related to once the old vets retire the cost of getting in a new vet, without a equity stake in the business, isn't as cheap as the business model calls for?




Employment expenses affected by auditors making them put deferred purchase payments through employment expenses to the extent vendors were obliged to remain working in the practices for a period. GXL was trying to capitalise those work outs into Goodwill.  Hmmmm

Think one of their one off adjustments was for this issue.  So if the auditors won’t let you capitalise labour call it a one off when you make the numbers up for your shareholders –cool.


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## craggles123 (16 September 2013)

*Re: GXL - Greencross*

lol in spite of all that still up nearly 3% today


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## piggybank (3 October 2013)

*Re: GXL - Greencross*

Hit a new ATH today of $6.38, before closing lower at $6.30.


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## craggles123 (4 October 2013)

*Re: GXL - Greencross*

Up again with another aquisition today.

Where too from here?

Surely the market will wake up soon?


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## craggles123 (14 October 2013)

*Re: GXL - Greencross*

Not sure what impact this will have but Greencross have just announced they are in preliminary discussions with Petbard regarding a merger

http://clients.weblink.com.au/clients/greencrossvet/article.asp?asx=GXL&view=2760997


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## McLovin (14 November 2013)

*Re: GXL - Greencross*

They're merging with Petbarn. 15x EBITDA. The presentation says the market is $7b in size, but I'm wondering how much of that is people buying Meaty Bites when they do their weekly shopping at Coles, rather than actually going into a speciality store. They've already got 138 Petbarn stores, which leaves me wondering how many more they can build.


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## craft (14 November 2013)

*Re: GXL - Greencross*



McLovin said:


> They're merging with Petbarn. 15x EBITDA.




Next years NPAT is proforma @ 10.9M and equity component is 325M
 that equates to them paying a P/E of 30!

with the additional 78M in debt taken on NIBD/EBIT will be over 3x

Something nice to say......... at least they used their own overpriced shares to pay for it.


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## skc (14 November 2013)

*Re: GXL - Greencross*



craft said:


> Next years NPAT is proforma @ 10.9M and equity component is 325M
> that equates to them paying a P/E of 30!
> 
> with the additional 78M in debt taken on NIBD/EBIT will be over 3x
> ...




Lol. 

Q. How do you make an EPS accretive acquisition when you are paying PE 30x?
A. When you use your own shares that are trading at PE 36x.

It's almost impossible for them not to make an EPS accretive acquisition using script...


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## McLovin (14 November 2013)

*Re: GXL - Greencross*



craft said:


> Next years NPAT is proforma @ 10.9M and equity component is 325M
> that equates to them paying a P/E of 30!




I bet the Petbarn people don't see it that way.

They said they won't sell until after FY14 results are out. I wonder where the SP will be by then.


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## piggybank (4 December 2013)

*Re: GXL - Greencross*



> I wonder where the SP will be by then.




I don't know either but what I know is that the volume has been increasing over the past 4 sessions.


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## piggybank (23 December 2013)

*Re: GXL - Greencross*

Still powering on...


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## piggybank (29 December 2013)

*Re: GXL - Greencross*


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## piggybank (24 January 2014)

*Re: GXL - Greencross*



McLovin said:


> I bet the Petbarn people don't see it that way.. They said they won't sell until after FY14 results are out. I wonder where the SP will be by then.




Well I cannot see into the future but what I can see presently is that the stock has risen (in the past year) by just more than 140%. However more than doubled in price since this time last year, the P/E is nearly 40 suggesting it is  getting very expensive.


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## craggles123 (24 January 2014)

*Re: GXL - Greencross*



piggybank said:


> Well I cannot see into the future but what I can see presently is that the stock has risen (in the past year) by just more than 140%. However more than doubled in price since this time last year, the P/E is nearly 40 suggesting it is  getting very expensive.




Very expensive which is why im contemplating just taking profits and walking away happy, I bought at the 3.50 range


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## craggles123 (16 June 2014)

*Re: GXL - Greencross*

16/06/2014
Today Greencross has advised it has agreed to acquire 100% of the equity in City Farmers, an Australian store with 42 outlets Australia Wide, including 21 in WA.

To be funded through fully underwritten equity raising, a placement to the vendors and a drawdown from a resized debt facility.

The aquisition is expected to be completed by the 17th of July 2014.

I prefer the City Farmers outlets compared to the Petbarns so hopefully they'll keep them seperate


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## TPI (17 June 2014)

*Re: GXL - Greencross*



craggles123 said:


> 16/06/2014
> Today Greencross has advised it has agreed to acquire 100% of the equity in City Farmers, an Australian store with 42 outlets Australia Wide, including 21 in WA.
> 
> To be funded through fully underwritten equity raising, a placement to the vendors and a drawdown from a resized debt facility.
> ...




I read this, I think they are paying $215M for a business that generates $20M EBITDA, isn't that a bit pricey?

With a dilutive capital raising to help partially fund it.

Hopefully ROE won't drop too much as a result.


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## The Falcon (27 April 2015)

*Re: GXL - Greencross*

Great comments McLovin / Craft and SKC on this one. Spent a bit of time looking at GXL and GEM over the weekend, a big "pass" on both, came to the same conclusion. Even in light of SP pullbacks, they don't make sense to me (as a long term holder).


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## tinhat (2 May 2015)

*Re: GXL - Greencross*

There's been quite a bit of negative sentiment here over the past few years over this company and its growth through acquisition strategy. Although ROA and ROE have reduced significantly over the past few years, EPS has more than doubled. I haven't looked into this company closely, but on the surface the growth strategy appears to have paid off so far.

The chart is certainly looking interesting. A head and shoulders with the first shoulder forming from Nov 13-May 14, the head between May-Dec 14 and the second shoulder between Dec-May 15. Note that the second shoulder contains its own head and shoulder formation. If we expect that the second corrective wave down has the same range as the first, the price is close to bottoming in the low $6 area.

I would be interested to hear thoughts from anyone who follows this stock.


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## waimate01 (4 May 2015)

*Re: GXL - Greencross*

A problem with GXL's Vet acquisition strategy is that they're buying small practices where the owner (and frequently the owners spouse) work long hours at less than market rates. It's a calling, a lifestyle and an obsession. For vets, selling out to GXL is a fabulous exit opportunity. No more working 80 hrs while being paid for 40. Yay!

But there's a big difference between putting unpaid weekend hours into your own business versus someone else's. 

Seems to me it's likely the financials of the practice will steadily erode once GXL buys it, the prior owner banks his cheque and eventually wanders off.


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## tinhat (4 May 2015)

*Re: GXL - Greencross*



waimate01 said:


> A problem with GXL's Vet acquisition strategy is that they're buying small practices where the owner (and frequently the owners spouse) work long hours at less than market rates. It's a calling, a lifestyle and an obsession. For vets, selling out to GXL is a fabulous exit opportunity. No more working 80 hrs while being paid for 40. Yay!
> 
> But there's a big difference between putting unpaid weekend hours into your own business versus someone else's.
> 
> Seems to me it's likely the financials of the practice will steadily erode once GXL buys it, the prior owner banks his cheque and eventually wanders off.




Very interesting thoughts. A very interesting business model of both vertical and horizontal integration but alas I doubt I have the time to investigate it as much as I need to to make an investment decision. It's got to be a growth industry. It's got to be one of the more inelastic consumer discretionary sectors. As such I imagine there must be all sorts of synergies and value-add opportunities available to providing full life-cycle services and products. I look forward to reading their next report.


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## skyQuake (15 December 2015)

*Re: GXL - Greencross*

Geeze they stuffed that raid up. Got 2.3% after looking for 15%... Should have nibbled on market for a few days


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## skc (15 December 2015)

*Re: GXL - Greencross*



skyQuake said:


> Geeze they stuffed that raid up. Got 2.3% after looking for 15%... Should have nibbled on market for a few days




Why would someone sell to them? A 'financial buyer' is a private equity fund right?! Who else can it be? And why else would a buyer want 15% if he/she didn't have more grand plans?

I had a tiny few long which I bought when GXL was first mentioned as a potential target in the AFR. I closed the position yesterday as it didn't move much and the overall market looked like it wanted to puke anytime (still does). 

Yup... I am a professional trader with impeccable timing!


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## Ves (18 December 2015)

*Re: GXL - Greencross*

Not sure I really understand what private equity could achieve with this business?

It's already pretty highly leveraged (around 3x EBITDA - based on 2015 earnings and debt).

I assume the vet business & pet shop businesses have pretty high fixed costs,  so cutting them too deep might end up being a disaster (or not possible at all).   

Not sure they could create synergies easily with an overseas business they already own either due to the geographic distance and the business model itself  (although it may be possible for EBOS in New Zealand).  This is especially the case for the Vets business,  as most centres by their very nature are pretty decentralised,  and I suspect it'd be hard to add much value in the distribution channels.

Any ideas?


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## skc (18 December 2015)

*Re: GXL - Greencross*



Ves said:


> Not sure I really understand what private equity could achieve with this business?
> 
> It's already pretty highly leveraged (around 3x EBITDA - based on 2015 earnings and debt).
> 
> ...




Not too sure but as mentioned in this AFR article, plenty of Private Equity outfits have a pet-related business in their stable. Is running a chain of vet surgeries that different to say running a network of hospitals in terms of economies of scale and synergies? Perhaps there are better buying power (in clinical supplies), better human resource management (rostering of vets), better brand value etc etc? Another thing GXL has done is to double every vet surgery as a pet store.. leveraging the space and foot traffic. The question is, how much is left for the would be acquirer to further exploit?

What I found interesting was that two of the bigger acquisitions made by GXL (City Farmers and Mammoth Pet Holders) were sold to them by Private Equities. It seems odd that they'd want it back so quickly?!

http://www.afr.com/street-talk/credit-suisse-in-market-for-greencross-stock-20151217-glqe5y


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## ROE (15 February 2016)

*Re: GXL - Greencross*

interesting announcement today
they team up to buy this baby cheap and screw retail holders.

so they team up with founder and various willing parties and form a separate entity to bid for GXL
I assume these willing parties will have an economic interest in this new entity

so they have the upside but current holder get none.

it ain't going to fly I dont think, they need to bid north of $8 for anyone to seriously consider
especially long term fund managers.

I got in between 4 and 5 but I aint selling for less than $8, I just got some more today at $6.50

I think the floor price has been set around around $6 regardless of what is happening for the next 
6 months at least.


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## skc (15 February 2016)

*Re: GXL - Greencross*



ROE said:


> interesting announcement today
> they team up to buy this baby cheap and screw retail holders.
> 
> so they team up with founder and various willing parties and form a separate entity to bid for GXL
> ...




The announcement made it sounds like they are going to report something pretty solid tomorrow. Let's see what those numbers are.

The PE funds have made 3 attempts already so clearly they are keen. But it's a long way from $6.75 to $8 unless there are some takeover tension.


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## ROE (16 February 2016)

*Re: GXL - Greencross*

Decent result out bye bye at this take over price - ... I bought yesterday for that reasoning ... Outright rejection of take over approach several time mean they have decent result up their sleeves


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## ROE (23 August 2016)

*Re: GXL - Greencross*

Another decent result, exactly how I like it, reducing debt slowing, fund expansion via cash flow and margin increase

Another long term hold but the market doesnt agree with me


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## skc (23 August 2016)

*Re: GXL - Greencross*



ROE said:


> Another decent result, exactly how I like it, reducing debt slowing, fund expansion via cash flow and margin increase
> 
> Another long term hold but the market doesnt agree with me




I had to dig a bit to find what explain the large differences between reported and statutory NPAT....and they thought they'd hide this on the last page of the presentation as appendix.




With the exception of the $2.7m acquisition and defence costs... it's hard to tell if the other costs are should actually be excluded from "underlying" performance?! Terms like integration and restructuring costs are such generic accounting bucket for unwanted costs...


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## ROE (23 August 2016)

*Re: GXL - Greencross*



skc said:


> I had to dig a bit to find what explain the large differences between reported and statutory NPAT....and they thought they'd hide this on the last page of the presentation as appendix.
> 
> View attachment 67849
> 
> ...




Maybe a once off to do with staff movement due to them taking full control of logistic and supply chain in house?


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## ROE (21 February 2017)

Oh yeah baby give it to me
Debt down, revenue up, margin up another good combo following ITD result

 Revenue up 14% to $412.3 million
 Gross margin (%) strong at 55.6%
 EBITDA up 14% to $51.4 million
 Underlying EBITDA up 11% to $53.9 million
 NPAT up 17% to $21.9 million
 Underlying NPAT up 9% to $23.0 million
 EPS up 15% to 19.0 cents
 Underlying EPS up 7% to 19.9 cents
 Interim dividend up 6% to 9.5 cents per share
 Net debt down $5.1 million to $222.8 million

4.3% LFL sales growth across the Group that what I like to see better than inflation grow is good


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## skc (26 June 2017)

Just a little example of how tiny little bit of news can offer trading opportunity. Last Thursday GXL announced the full year result release date and the suspension of DRP. Sounds like a very innocent, non-price sensitive news, doesn't it?

But it pricked my interest because:
1. GXL has been sold off along with other retail stocks on the Amazon threat and general tightening of consumer spending.
2. The stock has consolidated for 3 weeks around this low level and refused to go lower.
3. If trading has been poor, this would have been an opportunity to make a market update. So in this sense no news was good news.
4. DRP suspension may also be interpret as not negative for cash flow.
5. Overall retail sector has also stopped free falling for now.

So it was a simple case of buy the breakout of the little consolidation, which happened today (or for the more aggressive, just buy the news last Thursday).






Obviously it could all be wishful thinking and unravel tomorrow... so the usual risk management (position sizing and stop placement) applies.


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## greggles (9 May 2018)

Greencross down around 20% to $4.25 today after announcing a FY2018 EBITDA downgrade of approximately 12%. Full year earnings are now expected to be between $97 million and $100 million.

The company also announced that it now expects to recognise between $16 million and $20 million of  primarily non-cash impairments which will be reflected in the FY2018 full year statutory result.

I think that today's share price bloodbath may have been an overreaction as the market seems to be in no mood for earnings downgrades at the moment. As a result, the sell-off may have been a little overdone.

In any case, the GXL share price is now back to where it was in the first half of 2013, so some may see this dip as a buying opportunity. My gut feeling is that it probably won't be too long until it sees $5 again.

Time will tell.


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## greggles (10 October 2018)

greggles said:


> My gut feeling is that it probably won't be too long until it sees $5 again.
> 
> Time will tell.




My gut was wrong. However, speculation today about a takeover of Greencross has pushed its share price up 17.9% to $4.88. So it's almost back at $5. Here's the text of the announcement:


> *Response to Press Speculation *
> 
> Greencross Limited (“Greencross”) refers to press speculation regarding potential interest in Greencross.
> 
> ...




Very cautious language but it sounds to me like a deal is ready to be made. It's no surprise that someone thought GXL represented value at these levels. All will be revealed very soon I'm sure.


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## greggles (5 November 2018)

Greencross Limited has announced this morning that it has entered into a Scheme Implementation Agreement with Vermont Aus Pty Ltd an entity owned by funds managed by TPG Capital  Asia and TPG  Growth to acquire 100% of Greencross shares for $5.55 a share.

Greencross directors have unanimously recommend the Scheme subject to an Independent Expert's Report concluding that the Scheme is in the best interests of Greencross shareholders and there being no superior proposal.


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## System (1 March 2019)

On February 27th, 2019, Greencross Limited (GXL) was removed from the ASX's Official List in accordance with Listing Rule 17.11, following implementation of the scheme of arrangement between GXL and its shareholders in connection with the acquisition of all the issued capital in GXL by Vermont Aus Pty Ltd.


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