REG - CVS Group plc - Disposal of Crematorium Operations

CVSAnnouncement

24/04/2025 07:02

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RNS Number : 0163G  CVS Group plc  24 April 2025

For immediate release
 
                     24 April 2025

 

CVS Group plc

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

 

Disposal of Crematorium Operations

 

 

CVS, the UK listed veterinary group and a leading provider of veterinary
services, announces the disposal of its Crematoria operations ("Crematoria")
to Anima Care UK Limited a UK registered subsidiary of Anima Care Holding, the
parent company of the pet aftercare division of Funecap Group ("Funecap"), a
third-party European funeral services and infrastructure provider.  Cash
consideration is £42.4m which represents a 10x multiple of adjusted
EBITDA(1).

 

Rationale for the disposal

 

In light of the Group's significant growth opportunities and following an
attractive approach by Funecap, CVS has taken the decision to divest of its
Crematoria which currently represent 1.8% of the Group's revenues and 3.2% of
the Group's adjusted EBITDA.

 

The Group has exchanged contracts with Funecap for the disposal of its
Crematoria with an expected completion date within the next five weeks.

 

Funecap will provide clinical waste disposal and cremation services to CVS
practices and clients following completion.

 

The capital generated from the divestment provides additional firepower for
continued selective investment in the UK and expansion in Australia, where the
Group can acquire assets at attractive multiples, and supports leverage(2)
remaining below 2.0x.

 

Therefore, this capital recycling is expected to be value accretive to the
Group in due course and allows CVS to focus on its core veterinary and
diagnostics services, whilst continuing to provide a high-quality end to end
client service.

 

Financial effects of the disposal

 

For the financial year ended 30 June 2024 the Crematoria had revenue of
£12.0m; adjusted EBITDA of £4.3m; profit before tax of £3.6m and net assets
with a carrying value of £23.6m, as reflected in the Group consolidated
accounts.  The Crematoria forecast for the year to 30 June 2025 is an
adjusted EBITDA of approximately £4.3m and profit before tax of approximately
£3.3m.  It is expected that CVS will report a one-off profit on the disposal
of in the region of £32.0m in its FY2025 accounts.

 

This announcement contains inside information for the purposes of article 7 of
the Market Abuse Regulation (EU) 596/2014 as it forms part of UK domestic law
by virtue of the European Union (Withdrawal) Act 2018 ("MAR"), and is
disclosed in accordance with the Company's obligations under Article 17 of
MAR.  The person responsible for making this announcement on behalf of the
Group is Richard Fairman, CEO.

 

 

(Notes:)

(1.)(  )(   Adjusted EBITDA (Earnings Before Interest, Tax, Depreciation
and Amortisation) is profit before tax adjusted for interest (net finance
expense), depreciation, amortisation, costs relating to business combinations,
and exceptional items.)

(2.     Leverage on a bank test basis is net bank borrowings divided by
'Adjusted EBITDA', annualised for the effect of acquisitions, deducting) (cost
in relation to acquisition fees and adding back share option costs, on an
accounting basis prior to the adoption of IFRS 16.)

 

CVS Group
plc
        via Camarco

Richard Fairman, CEO

Robin Alfonso, CFO

Paul Higgs, Chief Veterinary Officer

 

Peel Hunt LLP (Nominated Adviser & Joint Broker)
                    +44 (0)20 7418 8900

Christopher Golden / James Steel / Andrew Clark / Lalit Bose

 

  Berenberg (Joint
Broker)
        +44 (0)20 3207 7800

Toby Flaux / Michael Burke / James Thompson / Milo Bonser

 

Camarco (Financial
PR)

Ginny Pulbrook
                                            +44 (0)7961
315 138

Letaba Rimmell

 

About CVS Group plc (www.cvsukltd.co.uk)

CVS Group is an AIM-listed provider of veterinary services with operations in
the UK and Australia.  CVS is focused on providing high-quality clinical
services to its clients and their animals, with outstanding and dedicated
clinical teams and support colleagues at the core of its strategy.

 

The Group now operates c.460 veterinary practices across its two territories,
including specialist referral hospitals and dedicated out-of-hours sites.
Alongside the core Veterinary Practices division, CVS operates Laboratories
(providing diagnostic services to CVS and third-parties) and an online retail
business ("Animed Direct").

 

The Group employs c.9,000 personnel, including c.2,400 veterinary surgeons and
c.3,300 nurses.

 

About Funecap Group

Funecap Group is a European leader in the funeral industry, Funecap Group
(€800m Revenue) principally operates in 6 countries (France, Italy,
Netherlands, Germany, Belgium and Switzerland) where it supports more than
400,000 families every year in its network of funeral infrastructure and
service branches. In 2023, Funecap created Anima Care Group, its subsidiary
dedicated to offering pet aftercare services. Anima Care Group operates in 4
countries (France, Italy, US and Canada) and supports more than 200,000 pet
parents every year. Funecap Group also owns Facultatieve Technologies, the
UK-based worldwide leader in the manufacturing and maintenance of cremation
equipment for humans and for pets.

 

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