REG - CVS Group plc - AGM Statement and Trading Update

CVSAnnouncement

24/11/2021 07:00

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RNS Number : 3428T  CVS Group plc  24 November 2021

24 November 2021

 

CVS Group plc

("CVS" or the "Company" and, together with its subsidiaries, the "Group")

 

AGM Statement and Trading Update

 

CVS, one of the UK's leading providers of integrated veterinary services, is holding its Annual
General Meeting at 11.00 a.m. today and provides the following
update to shareholders ahead of the meeting.

 

Summary

·    The positive start to the new financial year has continued into
September and October

·    Total sales grew by 13.8% in the four-month period to 31 October 2021
(vs. the same period last year)

·    Like-for-like sales(1)  increased by 12.4% for the same period

·    Adjusted EBITDA(2) margin for the four months remains strong at 19.2%
(prior year corresponding period: 18.7%)

·    Leverage(3) remained comfortably below 1.0x at 31 October 2021,
reflecting the positive trading performance coupled with continued strong cash
generation

·    Focus on organic growth has continued alongside further investment in
practice and clinical facilities under the Group's appropriate capital
allocation approach

 

Current Trading

The Board is pleased to report that the previously announced positive
performance for the first two months of the new financial year has continued
through September and October, with current trading ahead of that in the
prior year.

In the four-month period to 31 October 2021, the Group's total sales grew by
13.8% and like-for-like sales(1)  increased by 12.4%, reflecting strong
customer demand for our range of integrated veterinary services.

Our Healthy Pet Club preventative care scheme has seen a further increase in
membership, with 458,000 members as at 31 October 2021 (30 June 2021: 450,000
members) reflecting an increase of 7.1% over the last twelve months.

The Group continues to benefit from its integrated veterinary platform with
adjusted EBITDA(2) margin remaining strong at 19.2%, compared to 18.7% for the
corresponding period in the previous year.

Strong cash generation across our operations has continued since year end and
leverage(3) on a bank test basis has remained comfortably below 1.0x (30 June
2021: 0.68x).  Leverage remains in line with management expectations and the
Group is well placed for further investment in driving future growth.

Our People

As highlighted in the Group's full year results, the vet vacancy rate for the
last twelve months (LTM) to 31 August 2021 had risen slightly to 8.8%; this
metric is now averaging 9.2% (LTM to 31 October 2021) and continues to reflect
a number of new clinical roles advertised to meet increased client demand.
 The total number of vets employed by CVS has continued to increase since the
financial year end, including the Group's highest ever intake of newly
qualified graduate vets.

Acquisitions

CVS remains alert to additional, targeted opportunities for acquisitive growth
which forms a natural part of our business expansion, alongside investment in
the refurbishment of existing sites, and investment in new sites.

Dividend

As previously announced, subject to shareholder approval at the AGM, CVS
intends to pay a dividend of 6.5 pence per ordinary share on Friday, 3
December 2021 to holders on the register as at Friday, 19 November 2021.  The
ex-dividend date for this timetable is Thursday, 18 November 2021.

Outlook

We continue to focus on providing the best possible care to animals through
our integrated platform and to invest in our practices, improving the
facilities and expanding the offering of specialist facilities and clinical
procedures.  The Board considers that current trading is supportive of
management's full year expectations and the Group remains well placed to
deliver further growth over the longer term; we look forward to sharing
further updates as appropriate.

The Board would like to acknowledge and thank all members of the CVS team for
their continued dedication and support.

Notes

1     Like-for-like sales are defined as revenue generated from
like-for-like operations compared to the prior year, adjusted for the number
of working days. For example, for a practice acquired in September 2020,
revenue is included in the like-for-like calculations from September 2021.

2     Adjusted Earnings Before Interest, Tax, Amortisation and
Depreciation ("adjusted EBITDA") is profit before income tax adjusted for
interest (net finance expense), depreciation, amortisation, costs relating to
business combinations and exceptional items. Adjusted EBITDA is used as a
financial metric that removes the cost of debt, costs relating to depreciation
and amortisation and one-off costs to get a normalised earnings figure that is
not distorted by irregular items or structural investment.

3     Leverage on a bank test basis is drawn bank debt less cash; divided
by adjusted EBITDA annualised for the effect of acquisitions, including costs
relating to business combinations and excluding share option costs and
exceptional items, prior to the adoption of IFRS 16.

 

 Contacts:

 CVS Group plc                                                                                    via MHP Communications
 Richard Fairman, CEO
 Robin Alfonso, CFO
 Ben Jacklin, COO

 Singer Capital Markets (Nominated Adviser & Broker)                                              +44 20 7496 3000

 Aubrey Powell / Rachel Hayes / Jen Boorer

 MHP Communications (Financial PR)                                                                +44 20 3128 8549
 Andrew Jaques / Simon Hockridge / Rachel Mann / Charles Hirst

 

Notes to Editors

CVS Group is a fully integrated provider of veterinary services in the UK,
with practices in the Netherlands and the Republic of Ireland. CVS is focused
on providing high quality clinical services to its customers and their
animals, with outstanding and dedicated clinical teams and support colleagues
at the core of its strategy.

The Group has c.500 veterinary practices across its three markets, including
eight specialist referral hospitals and 35 dedicated out-of-hours sites.
Alongside the core Practices division, CVS operates Laboratories (providing
diagnostic services to CVS and third parties), Crematoria (providing pet
cremation and clinical waste disposal for CVS and third party practices),
Buying Groups and the Group's online retail business (Animed Direct).

The Group employs c.7,900 personnel, including c.2,000 veterinary surgeons and
c.2,500 nurses.

Further information is available via the Company's website, at
www.cvsukltd.co.uk (http://www.cvsukltd.co.uk)

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