CVS posts first-half growth as CMA market probe continues

(Sharecast News) - UK veterinary service provider CVS Group reported an 11.4% increase in revenue in its interim results on Thursday, to £329.9m, with a like-for-like sales growth of 6%. The AIM-traded firm said its adjusted EBITDA for the six months ended 31 December was ahead 8.9% at £63m, maintaining an EBITDA margin of 19.1%, aligning with its ambitions for the full year.

Membership in its preventative healthcare scheme, the Healthy Pet Club, grew to 500,000, reflecting sustained demand for companion pet veterinary care services in the UK.

Operationally, CVS said it was focussed on executing its mergers and acquisitions strategy, notably entering the Australian veterinary services market with 13 small animal acquisitions.

The group also completed four small animal practice acquisitions in the UK during the period.

Capital expenditure remained disciplined, with investments in infrastructure totalling £17.2m.

Notably, Bristol Vet Specialists, a flagship multi-disciplinary referral hospital, opened in October, offering a range of specialised services.

CVS said it had also prioritised improving standards of veterinary care, launching a new clinical governance framework aimed at enhancing standards across the profession and increasing veterinarian employment by 8.4% compared to the previous year.

Looking ahead, CVS said it was confident in its outlook, despite macroeconomic uncertainties and inflationary pressures.

The group anticipated continued growth, and reaffirmed its commitment to strategic goals including further expansion through acquisitions in both the UK and Australia.

CVS said it was aiming to double adjusted EBITDA over a five-year period, and was continuing to support the Competition and Markets Authority (CMA) in its market review of veterinary services in the UK.

"Our interim results reflect the continued resilience of our business despite the challenging macroeconomic backdrop affecting household incomes and inflationary pressures seen across UK and Europe," said chief executive officer Richard Fairman.

"We continue to execute on the growth strategy outlined at our capital markets day in November 2022 and during the period entered the Australian veterinary market, with 13 practices acquired alongside a further four acquisitions in the UK.

"We extended our bank facilities in January so that, alongside our cash-generative business model, we have committed funds in place for the next four years to help fund our investment plans."

At 1241 GMT, shares in CVS Group were down 5.94% at 1,495.5p.

Reporting by Josh White for Sharecast.com.