LONDON (Alliance News) - Premier Veterinary Group PLC Wednesday said revenue was up 3% in the six months to end-March, while profitability significantly increased in its veterinary practice business as operational efficiencies the company put in place last year drove up its gross margin, although it expects its planned European expansion to significantly increase costs in the remainder of the financial year.
The company, which was created when AIM-listed Ark Therapeutics acquired Premier Veterinary Group in a so-called reverse takeover, said its total revenue was GBP3.9 million in the first half of its financial year, up from GBP3.8 million a year earlier, driven by growth in its Pet Care Plan business.
Revenue from its veterinary practices, excluding the practice it sold at the end of March, were broadly flat on the year at GBP2.7 million, but profitability rose as the efficiency measures pushed gross profit up to 52% of revenue, from 45% a year earlier.
Revenue in its Premier Vet Alliance business rose 18% to GBP1.1 million, driven by an increased number of pets covered by its 'Pet Care Plan', a preventative healthcare plan for companion animals. It said revenue generated from the unit's buying group, which provides independent veterinary practices with enhanced discounts and rebates, was in line with the prior year.
The number of animals covered by the 'Pet Care Plan' was up 72% on the year to 56,629 animals at the end of March. The monthly cash value of the direct debit collections has increased by 71% to GBP887,004, it said.
The plan is set to get a further boost because it's being rolled out across all of the 114 UK practices of privately-owned Medivet under a three-year deal.
Premier Veterinary also expects to generate revenue from the plan elsewhere in Europe for the first time in the second half, as it rolls out the plan in the Nordic region after signing a deal with a fast-growing animal hospital and vet clinics operator, and launches the plan in Ireland and the Netherlands through its own initiatives.
"A significant investment will be required in connection with these European expansion plans that will have an impact on group profitability," it warned.
The company said it will report full results for the first half of the financial year on May 29.
Premier Veterinary shares were down 0.2% at 69.83 pence Wednesday morning.
By Steve McGrath; stevemcgrath@alliancenews.com; @stevemcgrath1
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