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Published 22 March 2013 11:43, Updated 25 March 2013 07:21
“Some people will spend on their pets before they spend on their kids,” says Vetshare chief executive Paul Rennie. Photo: Anna Warr
Newly formed vet supplies wholesaler VetShare is making inroads into an industry dominated by foreign-owned giants, with monthly revenue surpassing $1 million after just half a year of trading.
A non-listed public company, VetShare sells drugs and other supplies to vets, and hopes to keep their loyalty by allowing them to buy into the company. A prospectus last year was oversubscribed by 50 per cent, raising 4 million shares at $1 a share, with 5.8 million share applications received.
Chief executive Paul Rennie says revenue in February this year alone was $1.05 million, and the industry is resilient to downturns.
“March is heading the same way,” Rennie says. “It might sound like it’s plateaued but it’s seasonal. You sell more flea and tick products through summer.”
“Some people will spend on their pets before they spend on their kids.”
VetShare’s prospectus estimated the national market for vet services at more than $2.39 billion in 2010-11 with an annualised growth rate of 4.5 per cent.
The sector has had increasing foreign ownership in recent years. Major wholesaler Provet, formerly an Australian company, is now owned by Henry Schein Inc, based in New York. Another supplier, Lyppard Australia, is now owned by Symbion Pharmacy Services, part of The Zuellig Group, based in Hong Kong.
VetShare only makes up a very small percentage of the market, but Rennie believes there is demand for a local supplier, and the “customer shareholder” base is attractive.
“Provet was set up in 1962 with local ownership,” Rennie says. “A group of vets I got to know said, ‘Why don’t we do it? Why don’t we have our own wholesale so we can invest into our own future?’
“We have over 200 shareholders. You’re not just another wholesaler – you own part of your business. Some of these guys have put in $50,000 or $100,000.”
The company operates out of a warehouse in Smithfield in western Sydney, and hopes to have a warehouse in Victoria within two years to offer same-day service to Melbourne.