Shares in the Greencross fell sharply after the petcare company announced a profit downgrade and a cost cutting campaign.
A short time ago, the shares were down 20% to $4.25.
Greencross, which includes Petbarn and Greencross Vets, says it now expects to deliver full year underlying EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortisation) of between $97 million and $100 million, or about flat on last year’s $100 million.
The company also expects to recognise between $16 million and $20 million in non-cash impairments.
Simon Hickey, who took over as CEO in March, announced a review of operating costs with targeted cuts of between $10 million and $13 million.
“Since our last update to the market at our half yearly results in February, our retail division has continued to perform well, delivering 4.3% LFL sales growth and stable gross margin despite an increasingly competitive consumer environment.
“However, our veterinary business has failed to deliver the previously budgeted uplift in second half activity primarily due to disappointing visit numbers in both our standalone GP clinics and instore clinics.
“I remain confident in our integrated petcare model and the medium and long-term outlook for both our retail and veterinary businesses.”
The half year results posted in February showed revenue up 9% to $433.3 million and net profit after 9% higher at $23.2 million.
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