CVS eyes European expansion as vet group’s profits boom
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CVS sees expansion as vet group profits soar on strong demand from growing army of pet owners
- CVS reported a 22% increase in pre-tax profit and an 8% increase in revenue in the first half
- Group aims to expand in Europe and other ‘English speaking’ countries
- It expects to take full advantage of the increase in pets over the next five to 10 years
Veterinary group CVS is looking forward to further expansion outside the UK after reporting double-digit profit growth thanks to strong demand from the fast-growing pet business.
The Norfolk-based company reported a 22 per cent increase in pre-tax profit to £28m in the final six months of 2022, while revenue rose 8 per cent to £296.3m.
The group, which has around 500 veterinary practices in the UK, the Netherlands and the Republic of Ireland, said it is now entering new markets ‘both in Europe and in English-speaking areas beyond’.
Expansion: CVS is looking at more acquisitions as sales and profits increase
CVS is one of the UK’s six largest company vet groups and offers out of hours care, diagnostic labs and pet crematoria, among others.
The group has benefited from an increase in pet ownership since the start of the pandemic, which has led to increased demand for early childhood vaccinations, checkups and other procedures in recent years.
The number of pet owners who signed up for the preventive health care, Healthy Pet Club, rose 4.3 percent to 481,000 in the last six months of 2022 compared to the same period in the previous year.
However, the group expects to see the full benefit of the increase in pet numbers over the next five to 10 years, as these animals age and “might require more frequent and more complex veterinary interventions.”
“We are very aware of the ongoing challenges in the macroeconomic environment, but the Group’s ability to provide joint care throughout a pet’s life ensures consistent revenue streams,” CVS told shareholders.
The UK has seen a significant reduction in small, independent veterinary practices in recent years, mainly due to takeovers by large corporate groups such as CVS.
In the first half, the group acquired eight vet practice sites for £24.4 million, with a further three sites purchased in the second half to date and an ‘exciting pipeline of future acquisitions’.
Chief executive, Richard Fairman, said the first half results were in line with expectations, with strong performance continuing into the second half.
He also said the group had refinanced its debt facility in February, doubling it to £350 million, “with funding now in place to support our five-year growth ambition.”
CVS stocks were 0.2 percent lower at £19.08 in morning trading on Friday. They’re up about 18 percent over the past year, but remain below their pandemic peak of about £28.
The AIM-listed company paid an interim dividend of 7 pence per share, up from 6.5 pence in the same period in 2021.