LONDON (Alliance News) - Premier Veterinary Group PLC on Wednesday said it is confident on achieving further growth but at a slower rate than previously expected.
Shares were down 36% on Wednesday at a price of 55.30 pence each following the statement.
PVG also is discussing financing, which would allow it to expand, and is in "advanced" talks with a UK corporate group to roll-out PVG's pet healthcare plans across that company's outlets.
For its year ended September 30, PVG is guiding for revenue of about GBP3.2 million, with a loss at the earnings before interest, tax, depreciation, and amortisation level of GBP3.3 million.
Revenue in PVG's previous financial year was GBP2.5 million, boosted by expansion into Europe and the US, with Ebitda showing a GBP3.8 million loss.
PVG's revenue is driven by how many pets are on its plans. As at the end of September it had 244,000 fee-generating pets on plan, 30% higher year-on-year.
In the UK, those pet numbers rose 24% to 193,000 year-on-year, in Europe by 50% to 42,000, and in the US by more than double to 9,000 from 4,000.
However, UK revenue is set to be at the lower of end of expectations at around GBP2 million due to a fall in third-party revenue.
In the Netherlands, PVG's main European market, the company has become cash generative, with the continent as a whole expected to meet expectations, but a rise in acquisitions of clinics by bigger firms is likely to threaten future growth, because it shrinks the pool of potential customers.
PVG is currently "encouraged" by the roll-out of pilot pet clinics in the US, but the business has still failed to meet expectations. However, this pilot scheme, once fully rolled-out, will be "pivotal" in helping the business reach profitability.
Turning to financing, PVG is in talks over further funding with Bybrook Finance Solutions Ltd, which is owned by PVG's Corporate Development Director Raj Uppal.
The company has secured "outline terms" for a new long-term loan to replace its existing GBP2.3 million facility with Bybrook. A company owned jointly by PVG Chief Executive Dominic Tonner is likely to take part in the funding.
Regarding its talks with a "leading" UK corporate firm to provide collection, administration, and support services for animal health plans across its outlets, PVG said it is at an advanced stage.
The contract would bring around GBP1 million of revenue a year, but this would not be felt until its next financial year, ending September 2020.
Overall, though growth will be slower than hoped going ahead, PVG said the contract would bring a "significant" rise in revenue generating pets, and alongside its US roll-out plans will help the group grow in future.