CVS eyes expansion as vet group’s profits boom thanks to strong demand from growing army of pet owners
- CVS reported a 22% rise in pretax profit and 8% rise in revenues in its first half
- Group is eyeing expansion in Europe and other ‘English speaking’ countries
- It expects to see full benefit of the increase in pets over the next five to ten years
Veterinary group CVS is eying further expansion outside the UK after reporting double-digit profit growth thanks to strong demand from booming pet ownership.
The Norfolk-based firm reported a 22 per cent rise in pre-tax profit to £28million in the last six months of 2022, as revenues rose 8 per cent to £296.3million.
The group, which has around 500 veterinary practices in the UK as well as the Netherlands and the Republic of Ireland, said it was now looking at entering new markets ‘both in Europe and in English-speaking geographies further afield’.
Expansion: CVS is looking at more acquisitions as revenues and profits surge
CVS is one of the six largest corporate vet groups in the UK, offering services including out-of-hours care, diagnostic laboratories and pet crematoria.
The group has benefited from a surge in pet ownership since the start of the pandemic, leading to greater demand for first vaccinations, check-ups and other early-life procedures in recent years.
The number of pet owners signing up to its preventative healthcare scheme, Healthy Pet Club, increased by 4.3 per cent to 481,000 in the last six months of 2022 compared to the same period in the previous year.
However, the group said it expects to see the full benefit of the increase in pet population over the next five to 10 years, as these animals grow older and ‘may require more frequent and complex veterinary interventions’.
‘We are highly aware of the ongoing challenges in the macroeconomic environment, however the Group’s ability to provide joined-up care throughout a pet’s life provides consistent revenue streams,’ CVS told shareholders.
The UK has seen a sizeable reduction in small, independent veterinary practices in recent years, primarily as a result of acquisitions by big corporate groups like CVS.
In its first half, the group acquired eight vet practice sites for £24.4million, with a further three sites bought 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 having continued into the second half.
He also said the group had refinanced its debts facility in February, doubling it to £350million, ‘with funding now in place to support our five year growth ambition’.
CVS shares were 0.2 per cent lower at £19.08 in morning trading on Friday. They have risen by around 18 per cent over the last year, but remain below their pandemic peak of around £28.
The AIM-listed company paid an interim dividend of 7p per share, up from 6.5p in the same period in 2021.