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OAKVILLE, ONTARIO -- (Marketwire) -- 03/06/13 -- Pethealth Inc. (TSX: PTZ) ("Pethealth" or "the Company") today announced its financial results for the year and quarter ended December 31, 2012.
---------------------------------------------------------------------------- For the year ended For the quarter ended----------------------------------------------------------------------------($'000 except for per share Dec 31 Dec 31 Change Dec 31 Dec 31 Change figures) 2012 2011 % 2012 2011 %----------------------------------------------------------------------------Revenue 37,427 33,204 13% 9,413 8,758 7%EBITDA(1) 5,212 5,091 2% 982 1,491 (34%)Profit before taxes 2,402 3,259 (26%) 202 1,023 (80%)Profit after taxes 4,150 2,827 47% 575 906 (37%)Basic earnings per share 0.11 0.07 57% 0.02 0.03 (33%)Fully diluted earnings per share 0.09 0.06 50% 0.02 0.02 -----------------------------------------------------------------------------(1) EBITDA, a non IFRS accounting measure, is profit before amortisationand depreciation, interest and income taxes.
"I am pleased to present our Q4 and full results for 2012 where record revenues were achieved," said Mark Warren, President and Chief Executive Officer of Pethealth. "Sales of core policies achieved record levels every month during 2012 on a year on year basis and indeed policy growth has accelerated over the first two months of 2013. The requirement to expense acquisition costs in the quarter where policies are acquired creates a decline in cash flow from our insurance operations despite the overall positive impact especially when growth accelerates. In the longer term cash flow from these sales will rise significantly. Our non-insurance business continues to grow and this growth looks set to continue. We also expect to see rationalisation in the key markets in which we operate with some participants looking to exit over the course of 2013 providing us with potential acquisition opportunities."
Full year consolidated results:
Consolidated revenue increased by 13% to a record $37.4 million for the year which was the aggregate of a 2% growth in insurance segment revenues and a 35% increase in the Company's non-insurance segment revenues. The positive results from the insurance segment resulted from 4% growth in the U.S. insurance core commission revenues which were partially offset by a decline in insurance revenues both in the U.K. and Canada. Growth in non-insurance segment revenues is attributed to (i) the increase in the number of microchips sold coupled with increased pricing,(ii) an increase in the cross selling of products and services to the 24PetWatch database,(iii) an increase in sales through the PetangoStore.com and (iv) an increase in data publishing revenue.
Although consolidated revenues increased by 13%, consolidated profit before taxes was impacted by (i) the acceleration of the investment in organic growth in its insurance segment through the expansion of its 24PetWatch gift of insurance program in North America and through increased exposure on and sales completed through insurance aggregator websites the United Kingdom. The impact of these marketing expenses on income is a reflection of the accounting treatment applied to organic growth where the costs to acquire a new policyholder are expensed as incurred even though new insurance policies represent long-term recurring monthly revenues over the policies life, and (ii) a significant increase in amortisation and depreciation expense as a result of the deployment of the Company's internal ERP systems in Q1, 2012 and the deployment of the first phase of PetPoint Enterprise, the Company's first paid version of its cloud based animal welfare management system, in Q3 2012. The impact of the investment in insurance segment organic growth and the increased amortisation and depreciation expenses was partially offset by a significant reduction in the operating loss before taxes of its non-insurance operations.
