CVS Group dashes to all-time high as acquisitions boost dividend

Veterinary services firm CVS Group reported an "outstanding performance" in its full-year results released on Friday, as it saw profit and revenue continue to grow as it steamed ahead on its rapid acquisition trajectory.

CVS said that for the twelve months leading to 30 June its pre-tax profit scampered up to £14.5m from the £9.1m a year earlier thanks to a 24.6% increase in revenue to £271.8m.

Directors proposed to pay a 4.5p final dividend, a 28.6% increase on 2016, and said the increased scale and growth of the business can now support a "meaningful increase in the level of dividend whilst retaining sufficient funds to continue to grow the business".

Throughout the course of its trading year, CVS gobbled up a total of 25 businesses to bring an additional 62 veterinary surgeries into its fold, a year after picking up 67 new surgeries. CVS also said it had acquired 10 more surgeries since the end of the reporting period, bringing its total surgery count to 432.

The company said like-for-like sales were up 5.2% as opposed to 2016's 5.4% figure, but noted that LFL growth had been "significantly higher" thus far in the second quarter.

"Like-for-like sales growth has remained robust since the year-end. The acquisition pipeline remains strong and the recent acquisition of B&W Equine will allow for further developments in our equine business. Further acquisitions in the Netherlands will continue the development of our business in Europe," said chairman Richard Connell.

"The recent launch of our MiPet Cover insurance is an exciting development which has significant long-term potential, although it is not expected to generate a profit in the current financial year," he added.

EBITDA came in 22% higher at £44.7m while margins remained flat at 18%, feeding down to basic earnings per share that improved 59.5% to finish the year at 18.5p.

Net debt grew £6.9m to £100m, and cash and equivalents gained just £100,000 as the firm finished the year with £6.8m on hand.

Connel said CVS's exposure to the potential impacts of Brexit "appears to be limited", with the greatest impact possibly being in the employment of European vets.

"We have not seen any significant impact on employment so far but, together with other major employers in the industry and the Royal College of Veterinary Surgeons, we are lobbying the UK Government to ensure that there are no adverse impacts," he added.

As of 1610 BST, shares had advanced 8.23% to 1,434p, setting a new all-time highest close.