CVS Group sales growth accelerates in first half

CVS Group reported an 11.4% improvement in its first-half revenue on Thursday, to £273.7m, as its board said it was “well-positioned” for further growth.

The AIM-traded veterinary group said group like-for-like sales growth accelerated by 1.8 percentage points in the six months ended 31 December, to 9.6%.

Adjusted EBITDA rose 15.5% year-on-year to £52m, as its adjusted EBITDA margin expanded by 0.6 percentage points to 19%.

Its adjusted profit before income tax jumped 21.9% to £36.2m, and adjusted earnings per share were 24.6% higher at £41.5m.

Operating profit was up 42.9% at £26.3m, with basic earnings per share rocketing 54.4% to 24.7p.

CVS reported net bank borrowings of £63.2m at period-end on 31 December, up 42.3% from the same time a year earlier.

Looking ahead, CVS said like-for-like group sales growth in the first eight months of the year stood at 10%, and 11.4% on an underlying basis, with total sales growth standing at 11.5%, compared to 8.7% at the end of February last year.

Its adjusted EBITDA margin improved to 18.6% as at 28 February, from 18.1% a year earlier.

The company described its vet vacancy rate as “stable”, averaging 10.3% for the first eight months, up from 7.5% a year ago, while membership of its ‘Healthy Pet Club’ service increased to 466,000 members.

Its board said the firm was “well-positioned” for future growth, with increased investment in facilities, equipment and a pipeline of further acquisition opportunities.

CVS said it was on course to deliver full-year results in line with management expectations.

“We continue to focus on providing high quality care to our clients and their animals, through our evidence-based clinical approach,” said chief executive officer Richard Fairman.

“Our integrated model ensures that we can provide end-to-end, joined-up and continuous care.

“Demand for our services continues to increase as consumers seek the best possible care for their animals.”

Fairman said the company’s ongoing strategy of investment in its people, practice and other facilities, and in its clinical equipment was generating beneficial returns through organic growth.

“We will continue to augment this organic growth through acquisitions.

“The positive trading momentum in the first half has continued into the first two months of our second half, and with a strongly cash generative model we remain well placed to continue to invest and acquire to deliver future growth.”

At 1017 GMT, shares in CVS Group were up 1.25% at 1,782p.