CVS trading as expected as it expands vet network

(Sharecast News) - Veterinary service provider CVS Group said in an update on Wednesday that it saw a strong performance in line with expectations in the four months leading up to 31 October.

The AIM-traded firm, holding its annual general meeting, said total sales grew 11.9%, with like-for-like sales increasing 5.8%.

Additionally, the Healthy Pet Club preventative care scheme experienced a 4.2% increase in membership, totalling 499,000 members as of October.

CVS introduced a new clinical governance framework during the period, while its adjusted EBITDA margin remained steady at about 19%.

With robust operating cash conversion, CVS Group continued to invest in acquisitions and capital expenditure while maintaining leverage below 1.0x.

In the year-to-date, the group has invested £10.9m, with plans to spend between £30m and £50m in capital expenditure for the entire year.

CVS said it completed nine acquisitions comprising 11 practice sites in Australia, totalling AUD 67.6m (£35.6m) in initial consideration.

In the UK, it acquired four practice sites for £10.1 million, with all acquisitions in both regions meeting expectations.

The company said it was engaged with the Competition and Markets Authority (CMA) following submissions in September around the regulator's probe into the veterinary and animal health sector.

It said it would continue to support the CMA's review and expected further updates from the authority in the coming months.

CVS Group said it intended to pay a dividend of 7.5p per share on 8 December, pending shareholder approval at the annual general meeting.

The ex-dividend date was 2 November.

CVS said it had also started a formal search for a successor to Richard Connell, who had resigned as chair due to health reasons.

In the interim, Deborah Kemp, the group's senior independent director, would assume the role.

"We continue to focus on the delivery of our well-defined strategy, with our purpose to give the best possible care to animals and our vision to be the veterinary company people most want to work for," the company said of its outlook.

"We remain committed to investing in our practices and clinical equipment in order to drive quality services and organic growth.

"We are delighted with the progress made in Australia in both completed acquisitions and in developing a strong pipeline of opportunities.

"Whilst mindful of the wider macro-economic uncertainty, the group continues to trade in line with full-year market expectations and the group remains well placed to achieve further growth over the longer term and to deliver on our five-year plan."

At 0909 GMT, shares in CVS Group were down 0.6% at 1,489p.

Reporting by Josh White for Sharecast.com.