CVS Group Regulatory News (CVSG)

08 November 2022

CVS Group plc

("CVS" or the "Group")

Capital Markets Day

Outlining key elements behind the Group's ambition to double EBITDA over the next five years

CVS, the AIM-quoted veterinary group and one of the UK's leading providers of integrated veterinary services, today is holding its Capital Markets Day in Rotherham. The event will set out the Group's medium term plans in support of its ambition to double EBITDA over the next 5 years.  

The event will cover management's highly-disciplined approach to investment and acquisitions that focuses on shareholder returns, and will highlight the following key elements of its five year ambition:

· Organic revenue growth of between 4% and 8% per annum;

· Adjusted EBITDA margin between 19% and 23% subject to mix, with the opportunity to improve practice margins through investment in facilities and equipment;

· Continued investment in further practice refurbishment and relocations delivering high-quality clinical care, with an opportunity to invest between £30m and £50m per annum to drive additional organic growth;

· Greenfield investment with plans to open three greenfield sites in the financial year to 30 June 2023 with further opportunities over the five year period;

· On-going opportunity to invest in technology, with the Group recently announcing a new cloud based practice management system;

· Continued investment in people;

· Acquisition opportunities in the UK and scalable international consolidation opportunities which will remain subject to our disciplined acquisition criteria with expected investment of upwards of c.£50m p.a. across the five year period;

· Organic operating cash conversion of > 70% with leverage (net debt / bank test EBITDA) remaining less than c.2.0x; and

· Sustainability and ESG remain at the heart of delivering this growth strategy.

There will be no new disclosures on current trading conditions, with the Group's overall performance in line with market expectations.

Richard Fairman, CEO, commented:

"I am delighted that the strategy set out in 2019 to focus on our organic growth augmented by acquisitions has delivered strong and robust growth for the Group. Whilst we are mindful of the macro-economic backdrop, our market is resilient and the Group remains well positioned to deliver further growth.

Today we set out key elements behind our ambition to double EBITDA over the next five years, by delivering our purpose of providing the best possible care to animals, and our vision to be the veterinary company people most want to work for. We will outline our plans for investment across a number of areas in support of organic and inorganic growth and margin enhancement. 

Combining the scope for enhanced earnings with the highly cash generative nature of our business, we believe that the Group is well placed to continue to offer attractive returns to shareholders."

The presentation and Q&A will be streamed live from 12.00pm GMT, please register via the following link https://stream.brrmedia.co.uk/broadcast/6357981498f6352ab0eba0c3

A copy of the presentation and a webcast recording will be available on the CVS Investor Relations website following the event.

CVS Group plc via Camarco

Richard Fairman, CEO

Ben Jacklin, COO

Robin Alfonso, CFO

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

Adrian Trimmings / Michael Burke / Andrew Clark / Lalit Bose

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

Toby Flaux / Ben Wright / Ciaran Walsh / Milo Bonser

Camarco (Financial PR)

Geoffrey Pelham-Lane +44 (0)7733 124 226

Ginny Pulbrook +44 (0)7961 315 138

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

CVS Group is an AIM-quoted 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 37 dedicated out-of-hours sites. Alongside the core Veterinary 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) and the Group's online retail business ("Animed Direct").

The Group employs c.8,100 personnel, including c.2,100 veterinary surgeons and c.3,000 nurses.