The company has consolidated its first-mover advantage in Australia’s booming regional growth corridors.

Apiam (ASX:AHX) is set to deliver further growth in the June quarter as its regional expansion strategy gathers pace.

In the wake of a busy start to the year, the national animal health and pet services company provided an update for investors that highlighted its momentum across a number of key segments.

For starters, the group’s booked revenue for the March quarter came in at $30.3m, which brought the year-to-date total to $91.6m and flowed through to a 9.7% gain in gross profits (to $52m).

Along with improved operating efficiencies and service expansion, that growth is also a reflection of Apiam’s expanded national footprint across both its dairy operations and mixed-animal veterinary clinics.

And it’s all being driven by the “rapid acceleration in pet ownership and population numbers in regional growth corridors”.


Regional growth

To capitalise on those tailwinds, Apiam continues to expand its services for those growing addressable markets with a regional growth strategy underpinned by targeted M&A.

Institutional investors have recognised the market opportunity, as evidenced by the $6m share placement the company announced in mid-April that was heavily oversubscribed.

PETstock – its joint venture partner in several clinics – has recently strengthened its ties with Apiam increasing its stake in the business to 16.5pc.

And based on the AHX stock price so far in 2021, the market is also starting to get on board.

Shares in the company are up by around 50 per cent so far this year, and advisory firm Shaw & Partners expects to see more growth to come.



In a research note appraising Apiam’s Q3 results, Shaw analyst Jonathan Higgins put a near-term price target on Apiam shares of $1.02 – a premium of around 15pc to the current share price.

Higgins noted the company’s $6m cap raise, which gives it balance sheet flexibility to pursue acquisitions, as well as unique recent weather conditions which have contributed to bumper farming crops along Australia’s east coast. This helps reduce input costs Apiam’s livestock customers.

And he said the emergence of PETstock on the AHX share register is one the “most significant” recent events to occur.

PETstock is a “highly profitable and a dominant player in Australian pet products and services”, Higgins said, adding that “whilst AHX and PETstock enjoy a JV around clinics, Petstock has not disclosed intentions with the greater stake at AHX”.

Along with its JV partnership that connects Apiam clinics to PETstock stores, Apiam has been busy opening more clinics serving high-growth regional corridors including Torquay North in Victoria (around 20km from Geelong).

More Apiam standalone clinics are already in the building phase, and with a large balance sheet and nationally integrated operating system, Apiam has established a first-mover advantage in key markets that aren’t targeted by metro veterinary networks.

“Apiam’s focus for the year ahead continues to be pursuing our regional expansion strategy,” MD Dr Chris Richards said.

“As an established regional player, Apiam is well-placed to scale up and leverage its market position in fast-growing regional veterinary markets.”

This article was developed in collaboration with Apiam, a Stockhead advertiser at the time of publishing.  

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.