CVS Group Regulatory News (CVSG)

Trading update and Acquisitions

The Board announced on 19 May 2010 that it expected results for the year to be below market expectations. Trading conditions have remained tough throughout the rest of the group's financial year which will end on 30 June 2010. Having reviewed flash numbers the Board now believes that turnover for the year will be in the region of £85m (net of inter company sales of £2m). This is in the region of £1m below Directors' expectations for the final quarter.

Whilst the Board is disappointed to report lower than anticipated turnover, the performance will still reflect modest like-for-like growth for the year as a whole (after adjusting for the weather affected months of December 2009 and January 2010) despite the challenging environment.

The Board is pleased to report that the Group has delivered a better than expected level of acquisition activity in the year, which is expected to generate annualised turnover in the region of £21 million, compared to the £12m expected at the start of the financial year. However, as previously highlighted, the bulk of these have been acquired in the latter part of the financial year, which means that they will only deliver £6 million of sales in this current year. The total number of surgeries acquired in the year amounted to 41 together with one laboratory.

Three new acquisitions have been completed in June funded by internally generated cash, comprising five surgeries located in the vicinity of Mansfield, Horsham and Burgess Hill respectively. The combined annual turnover for the five surgeries is circa £2.7 million.

Senior Management Appointment

The Board is also pleased to confirm the recent appointment of Steve Scully as the Director of Practice Operations for the Group. Steve will sit on the Executive Committee and brings with him a broad range of experience and a proven track record in driving growth within large multi site operations.

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