May 18, 2024

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CVS Group revenue jumps 11pc in first-half

2 min read

Veterinary service provider CVS Group reported a positive first half in a trading update on Thursday, with total group revenue jumping 11.4% year-on-year to £329.9m as like-for-like sales increased 6%.

The AIM-traded firm said the figures fell within its target range of 4% to 8%, set during its capital markets day in November 2022.

It said the Healthy Pet Club, its preventative care scheme, had seen continued growth, boasting 500,000 members as of 31 December – a 4% increase over the last year.

Despite consistent adjusted EBITDA margins at around 19%, gross margins slightly improved, although that was offset by increased utilities and other costs, as well as ongoing investments in support functions.

CVS said it maintained its commitment to investment in practice refurbishment, relocations, clinical equipment, and technology, with £17.2m invested in the first half, consistent with the guidance provided during the capital markets day.

In terms of acquisitions, the group completed four acquisitions of small animal first opinion practices in Australia in H1 2024, bringing the total to 13 acquisitions comprising fifteen practice sites.

The aggregate initial consideration for the acquisitions was AUD 103.8m (£54.6m), as they performed in line with business plans.

Additionally, there was a strong pipeline of potential acquisition opportunities in Australia for the second half.

In the UK, CVS completed four acquisitions of small animal practices in the first half, comprising four practice sites, with an aggregate initial consideration of £10.1m.

The acquisitions followed the submission of briefing papers to the Competition and Markets Authority (CMA).

Due to investments in capital expenditure and acquisitions, net bank borrowings increased to £129.2m as of 31 December, compared to £74.1m on 30 June.

The group said its leverage on a bank test basis was 1.15x at the end of December, aligning with management expectations.

CVS said its banking syndicate had agreed to extend the bank facilities for one year, extending the term from 22 February 2027, to 22 February 2028, while all other terms of the facilities remained unchanged.

The company said it was continuing to support the CMA with its market review, and anticipated further updates from the competition regulator in early 2024.

Regarding the chair position, its senior independent director Deborah Kemp was currently serving as chair on an interim basis while the company conducted a formal search process for a permanent chair, expecting to make an appointment in the coming months.

“The board is pleased with the first-half performance and, whilst it continues to be mindful of the weak economic backdrop, expects to deliver full-year results in line with market expectations,” CVS Group’s directors said in a statement.

“The group remains excited by the growth opportunity in Australia with acquisitions made to date performing in line with its business case and a strong pipeline of acquisition opportunities in place.

“The group remains on track to deliver further growth over the longer term.”

At 1533 GMT, shares in CVS Group were up 1.94% at 1,679p.

Reporting by Josh White for


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