Like a dog with two tails: 1ST Group rides $580m pet grooming market
Health & Biotech
Health & Biotech
Link copied to
There are now more pet groomers in Australia than vets — good news for ASX-listed 1st Group which just signed up Petbarn to its online pet appointment service PetYeti.
There are 8000 registered vets in Australia but “many, many more multiples of pet groomers”, 1ST’s managing director Klaus Bartosch told Stockhead.
“There is no question that we spend considerable sums of money on our pets … especially those without children,” he said.
Australian households shell out an astonishing $580 million a year to keep their Bella, Fido or Max well-groomed,” according to a 2016 report, Pet Ownership in Australia, commissioned by pet industry group Animal Medicines Australia.
That is double the amount spent on pet training ($274 million) or alternative health treatment ($234 million).
1ST Group (ASX:1ST) operates a range of businesses, including an online human health services portal, myhealth1st.com.au, but Mr Bartosch says the burgeoning pet market was the one to watch.
“I think this has more potential than our health care business,” he said.
“Pets are often treated as members of the family… just as we have the option to make a health appointment on behalf of a family member, so too can we arrange a pet grooming visit.”
Nearly two in three Australian households (62 per cent) own a pet and, while many pets arrive in the family home at no cost, spending on pet products and services has now topped $12 billion annually.
The booming grooming business is good news for 1ST Group, which earlier this month borrowed $2 million in working capital from major shareholder John Plummer, the founder of recruiter Chandler McLeod.
1ST burnt through $774,000 in the June quarter, leaving $2.9 million in the kitty (before the loan). The business expected to spend $1.7 million this quarter.
1ST’s shares rose 7 per cent to 4.5c in afternoon trade, giving it a value of $9.3 million. Its shares have traded between 3c and 7c over the past year.