CVS Group hiring more vets after solid first half

Veterinary operator CVS Group reported an 8.6% improvement in revenue in its final results on Thursday, to £554.2m.

The AIM-traded firm said its “strong” group like-for-like sales growth of 8% in the year ended 30 June benefitted from favourable market dynamics and its continued focus on delivering against its strategy.

Adjusted EBITDA was up 10.2% to £107.4m, which the board put down to strong revenue performance and operational efficiencies.

Profit before tax increased 8.8% to £36m, benefitting from the increase in adjusted EBITDA and a reduction in costs relating to business combinations, partially offset by an impairment of investment relating to the acquisition of Quality Pet Care.

Leverage fell to 0.4x from 0.68x year-on-year, as a result of strong EBITDA growth, continued good operating cash generation and a reduction in net debt.

CVS said cash generated from operations increased 15.9% to £93.1m, primarily as a result of the increase in adjusted EBITDA.

Looking ahead, the company reported “strong” sales and like-for-like growth in the first 10 weeks of the new financial year, with the board saying it was “pleased” with its momentum and trading, in line with market expectations.

It was seeing continued growth in its ‘Healthy Pet Club’ to 475,000 members, while a record number of new graduate vets had been recruited.

Two new acquisitions had been made since the year-end for consideration of £7.8m, with a healthy pipeline of potential deals.

CVS noted a further growth opportunity with its strategic partner Dobbies, to co-locate its practices in garden centres, with a successful first site opened in August and more to follow.

The company also planned to open three further greenfield sites during the 2023 financial year, as well as a new “state-of-the-art” veterinary hospital in Bristol.

Its directors said that, while they were mindful of the wider macroeconomic backdrop and inflationary pressures, the company was “well-positioned” to continue delivering attractive growth and shareholder value.

“I'm pleased that we have delivered a strong set of results, with good growth against all of our key financial metrics despite a challenging macroeconomic backdrop,” said chief executive officer Richard Fairman.

“Our continued focus on providing the best possible clinical standards, led by our fantastic colleagues who are committed to high quality veterinary care, has contributed to the strength of our performance.

“The veterinary market remains resilient, with an increasing pet population providing favourable dynamics and a strong platform for sustainable growth across our integrated services.”

Fairman said continued investment in facilities, clinical equipment and people supported that growth, adding that “significant enhancements” to pay and benefits ensured CVS was an attractive employer, with the firm recruiting more graduates than ever before.

He added that the company now employed around 5,000 vets and nurses across the group.

“Our pipeline for acquisitions also continues to build, supplementing the organic growth opportunities in the business.

“With a positive start to the new financial year, we remain confident in our ability to deliver value for all our stakeholders.”

At 1050 BST, shares in CVS Group were up 0.111% at 1,613p.

Reporting by Josh White at Sharecast.com.