CVS shares tumble as group looks set to fall short of market expectations

AIM-listed veterinary group CVS warned investors on Tuesday that it looked set to fall short of market expectations in the first half of its trading year.

CVS, which has poured much of its attention into the Dutch farm and equine markets over the last two years, said the early performance from its new focus points had been "disappointing", with results falling short of board expectations.

While sales increased 23.7% across the group, gross margins contracted to 76.2% from the 79.5% seen in the first half after an increased mix of lower margin farm business in the latter half of the year.

CVS also noted that employment costs in the six months ended 31 December were "well above" those seen in 2018.

"In light of the above and certain other cost increases, the group expects to announce EBITDA for H1 2019 that is broadly flat compared to H1 2018," said CVS.

Looking forward, CVS said it had highlighted "a number of cost savings" which it anticipates will generate savings in both the second half and the remainder of the calendar year.

As of 1200 GMT, CVS shares had tanked 28.335% to 467.65p.