TIDMCVSG
RNS Number : 9738U
CVS Group plc
29 November 2023
29 November 2023
CVS Group plc
("CVS" or the "Group")
AGM Statement and Trading Update
Positive start to the financial year, trading in line with
expectations
CVS, the UK listed veterinary group and a leading provider of
veterinary services, is holding its Annual General Meeting at
11.00am today and provides the following update to shareholders
ahead of the meeting.
Current Trading
The Board is pleased to report a good start to the financial
year with performance in the first four months in line with
expectations.
In the four-month period to 31 October 2023, the Group's total
sales grew by 11.9%, with like-for-like sales (1)
increasing by 5.8%, reflecting positive performance across all
business areas.
Our Healthy Pet Club preventative care scheme has seen a further
increase in membership, with 499,000 members as at 31 October 2023
(31 October 2022: 479,000 members) reflecting an increase of 4.2%
over the last twelve months.
In the period we have launched a new Clinical Governance
Framework, demonstrating our commitment to driving standards of
care across the veterinary profession.
The Group's adjusted EBITDA(2) margin remains in line with the
prior period at c.19%, reflecting continued investment in support
functions and clinical care.
Strong operating cash conversion has supported investment in
acquisitions and capital expenditure with leverage (3) on a bank
test basis remaining in line with management expectations and below
1.0x (30 June 2023: 0.73x). The Group has continued to increase its
investment in practice refurbishment, relocations, clinical
equipment and technology with GBP10.9m invested in the year-to-date
vs GBP10.8m in the prior year corresponding period. The Group
expects to spend between GBP30m and GBP50m in capital expenditure
for the full year.
Acquisitions
Australia
The Group has completed a further four small animal first
opinion practice acquisitions bringing the total to nine
acquisitions comprising eleven practice sites in the financial year
to date, for aggregate initial consideration of A$67.6m / GBP35.6m.
The acquisitions made to date, together with our strong pipeline,
provide a meaningful platform for our operations in Australia:
Name of business combination % acquired Date of acquisition
Vetright Pty Ltd t/a McDowall Veterinary
Practice 75% 26 July 2023
---------- -------------------
McDowall Veterinary Hospital Pty.
Ltd t/a Warner Vet 100% 26 July 2023
---------- -------------------
Brunker Road Veterinary Centre Pty
Limited 100% 17 August 2023
---------- -------------------
North Road Veterinary Centre 100% 23 August 2023
---------- -------------------
Cattle Dog Health Pty Ltd t/a Happy
Pets Family Vet 100% 23 August 2023
---------- -------------------
Northgate Veterinary Surgery and St
Vincents Vets 100% 25 October 2023
---------- -------------------
Parkinson Veterinary Surgery 100% 25 October 2023
---------- -------------------
10 November
Southside Animal Hospital Pty Ltd 100% 2023
---------- -------------------
28 November
Brimbank Veterinary Clinic 100% 2023
---------- -------------------
United Kingdom
The Group has completed a further two small animal first opinion
practice acquisitions in the UK bringing the total to four
acquisitions comprising four practice sites, for aggregate initial
consideration of GBP10.1m. The acquisitions were completed
following the submission of briefing papers to the Competition and
Markets Authority ("CMA").
Name of business combination % acquired Date of acquisition
3Tab Holdings Limited and Bridge 100% 15 September
Veterinary Practice Limited collectively 2023
trading as Bridge Veterinary Practice
---------- -------------------
18 September
Masefield Veterinary Services Ltd 100% 2023
---------- -------------------
The Liverpool Vets Limited 100% 3 October 2023
---------- -------------------
Fernside Veterinary Centre Limited 100% 9 November 2023
---------- -------------------
All Australia and UK acquisitions are performing in line with
expectations.
CMA
Following our update in September, we have met with the CMA and
responded to a number of questions and information requests. We
will continue to support the CMA with their review and look forward
to a further update from the CMA in the coming months.
Dividend
As previously announced, and subject to shareholder approval at
the AGM, CVS intends to pay a dividend of 7.5 pence per ordinary
share on 8 December 2023 to holders on the register as at 3
November 2023. The ex-dividend date was 2 November 2023.
Board appointment update
Following the resignation of the Group's Chair, Richard Connell,
due to ill health, we have commenced a formal search to appoint a
successor. The board would like to take the opportunity to thank
Richard Connell for his considerable contribution as Chair over the
past 16 years. In the interim period Deborah Kemp, the Group's
Senior Independent Director continues to undertake this role.
Outlook
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. 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.
The Board would like to thank all members of the CVS team for
their continued dedication and support.
Notes
1. Like-for-like sales shows revenue generated from
like-for-like operations compared to the prior year, adjusted for
the number of working days. For example, for a practice acquired in
September 2022, revenue is included from September 2023 in the
like-for-like calculations.
2. Adjusted EBITDA (Earnings Before Interest, Tax, Depreciation
and Amortisation) is profit before tax adjusted for interest (net
finance expense), depreciation, amortisation, costs relating to
business combinations, and exceptional items. Adjusted EBITDA
provides information on the Group's underlying performance and this
measure is aligned to our strategy and KPIs.
3. Leverage on a bank test basis is drawn bank debt less cash
and cash equivalents, divided by adjusted EBITDA annualised for the
effect of acquisitions, including acquisition costs arising from
business combinations and excluding share option costs, prior to
the adoption of IFRS 16.
CVS Group plc via Camarco
Richard Fairman, CEO
Ben Jacklin, Deputy CEO
Robin Alfonso, CFO
Peel Hunt LLP (Nominated Adviser & Broker) +44 (0)20 7418
8900
Adrian Trimmings / Michael Burke / Andrew Clark / Lalit Bose
Berenberg (Joint Broker) +44 (0)20 3207 7800
Toby Flaux / Ben Wright / James Thompson / Milo Bonser
Camarco (Financial PR)
Geoffrey Pelham-Lane +44 (0)7733 124 226
Ginny Pulbrook +44 (0)7961 315 138
About CVS Group plc ( www.cvsukltd.co.uk )
CVS Group is an AIM-listed provider of veterinary services in
the UK, Australia, the Netherlands and the Republic of Ireland. CVS
is focused on providing high quality clinical services to its
clients and their animals, with outstanding and dedicated clinical
teams and support colleagues at the core of its strategy.
The Group has c.500 veterinary practices across its four
markets, including nine specialist referral hospitals and 39
dedicated out-of-hours sites. Alongside the core Veterinary
Practices division, CVS operates Laboratories (providing diagnostic
services to CVS and third-parties), Crematoria (providing pet
cremation and clinical waste disposal for CVS and third-party
practices), Buying Groups and the Group's online retail business
("Animed Direct").
The Group employs c.9,000 personnel, including c.2,400
veterinary surgeons and c.3,300 nurses.
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END
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