LONDON (Alliance News) - Premier Veterinary Group PLC shares rose by a quarter on Monday after it said it sold its veterinary business for GBP6.5 million in cash as the company moves its focus to its other activities.
Premier Veterinary shares were trading up 24% to 121.80 pence per share on Monday.
The company sold the business to Independent Vetcare Ltd, leaving Premier Veterinary focused on its other subsidiary, Premier Vet Alliance Ltd. The sale sees the company exit its operations of physically operating clinics, and it will now solely provide services to third-party practices.
Premier Vet Alliance provides services to veterinary clinics, including the administration of a preventative healthcare program for pets branded "Pet Care Plan", and the operation of a buying group which offers enhanced discounts to member practices.
"We are very excited that we now have additional resources to expand the (buying group) business. The board believes that the disposal, coupled with the resultant focus on the (buying group) business, will lead to the enhancement of shareholder value," said Chief Executive Dominic Tonner.
Its preventative healthcare programme, Pet Care Plan, was launched back in 2011 and has proven successful enough for the company to make it the company's main focus and long-term value driver. The company currently has 454 agreements with clinics related to the Pet Care Plan, looking after around 99,000 pets.
To put that into context, back in September 2013, the company was generating fees from just 26,000 pet care plans, which has steadily risen every year since. At the end of September this year, it had 79,000 pets signed up - suggesting a large rise over the past few months.
One of the reasons for the rapid expansion is its deployment in other countries after being launched in Denmark, Ireland and the Netherlands, which together have 120 clinics signed up covering 4,760 pets. Premier Veterinary is expecting "significant growth" in these areas going forward, especially as it can use the proceeds from the sale to roll out the Pet Care Plan quicker.
The sale of its veterinary business comprises of three subsidiaries, Zetland Ltd, Thanet One Ltd and The Veterinary Clinmic (Bearwood) Ltd. Independent Vetcare has paid GBP4.1 million in cash, plus repaying GBP2.1 million worth of loans owed by the subsidiaries to Premier Veterinary.
The veterinary business generated revenue of GBP5.5 million in the year ended September 30, and had net assets excluding the intercompany loans of GBP940,000.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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