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CVS Group hails ‘strong base’ for growth as turnover and profits rise

PUBLISHED: 10:53 31 March 2017 | UPDATED: 12:51 31 March 2017

Chief executive Simon Innes at CVS Group in Diss. Picture: SONYA DUNCAN.

Chief executive Simon Innes at CVS Group in Diss. Picture: SONYA DUNCAN.

Archant Norfolk Photographic © 2016

Veterinary group CVS saw revenue and profits rise in its interim results as its chairman pointed to a “strong financial base” for further growth.

Veterinary group CVS saw revenue and profits rise in its interim results as its chairman pointed to a “strong financial base” for further growth.

The Diss-based group’s interim results for the six months to December 31, 2016, show revenue grew to £129.4m, up 28.5% from £100.7m in the same period of 2015, while adjusted pre-tax profits were up 47.1% to £16.5m.

The company acknowledged the impact of acquisitions, after buying 20 new surgeries in the second half of 2016 for a total of £12m and a further 13 since at a cost of £17m, but also highlighted like-for-like sales growing by 7.2%.

Richard Connell, chairman of the Diss-based EDP/EADT Top100 firm, said: “The group has delivered another strong set of results showing further growth in revenue and underlying profit, generated both organically and through acquisitions.

“The period saw a continuing high level of acquisition activity and the successful raising of £30.2m cash through a placing of equity in December 2016 has provided a strong financial base on which the group can continue to grow, both through acquisitions and other developments.”

A move into the Netherlands, where CVS has bought six sites, was “particularly exciting” said Mr Connell, adding: “It is intended that these acquisitions are the start of the development of a business in The Netherlands on a similar basis to the CVS Group in the UK.”

MORE: Veterinary practice group CVS is driving change in the animal care business

As well as funding acquisitions, the share sale allowed the company to cut net debt by £25.1m to £68m.

CVS Group operates more than 380 veterinary practices, including more than 30 in East Anglia – with 5,000 employees, and won the Top100 Accelerator Award at the EDP Business Awards in 2016.

It also has a growing research and diagnostics business at its Harleston and Weybread laboratories, seven pet crematoria, a pharmaceuticals range, and will soon launch a pet insurance brand.

Mr Connell said trading in 2017 was in line with expectations, and a dividend at least equal to 2016 3.5p per share was expected by June’s financial year end.

“With our wide range of organic opportunities, healthy cash generation and a strong acquisition pipeline, the board looks forward with confidence to the remainder of the year and beyond,” he said.

Mr Connell said trading in 2017 was in line with expectations, and a dividend at least equal to 2016’s 3.5p per share was expected by June’s financial year end.

“With our wide range of organic opportunities, healthy cash generation and a strong acquisition pipeline, the board looks forward with confidence to the remainder of the year and beyond,” he said.

Revenue from the group’s practices rose 30.2% to £118.4m, with like-for-like sales growing 7%, while it added 30,000 new members to its Healthy Pet Club - a loyalty scheme designed to link pet owners more closely to CVS surgeries.

The company’s online pharmacy, Animed, which recently moved to CVS’s 50,000 sq ft warehouse in Diss, saw revenues increase by 36.6% as a new management began to take effect, but adjusted earnings before deductions remained at £0.2m after rounding.

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