Last checked at 21 Jul 2014 07:00
21 July 2014
CVS Group plc ("CVS" or the "Group")
Trading Update
CVS, the UK's leading provider of integrated veterinary services, is pleased to provide the following trading update in respect of the financial year ended 30 June 2014. Comparative data relates to the year ended 30 June 2013 unless otherwise stated. The Group will announce its full year results on Friday 19 September 2014 and these are expected to be in line with market expectations.
Group revenue for the year showed total like-for-like growth of 6.9%. This figure benefitted from good weather throughout the winter months and is stated after adjusting for one extra day's trading in the year to 30 June 2013. Like-for-like sales performance was strong in all the main businesses, particularly in Animed Direct. CVS continues to see opportunities for organic growth across all of its activities and continues to invest in the estate to capitalise on this potential.
Strong organic growth has been achieved in the core veterinary practices especially in the second half of the year. Membership of our Healthy Pet Club loyalty schemes grew by 50,100 (44.8%), from 111,900 pets at the start of the year to 162,000 at the year end. In the previous year membership grew by 46,400. Based on the current run rate these schemes are now contributing over 11% of the total revenue from practices (2013: 9%).
The scale and increasing density of our practice network has enabled the Group to open four emergency out-of-hours centres during the year, bringing work previously performed by third parties into the Group. Further opportunities for similar changes will be sought during 2015.
Good progress has been made in developing our referrals business with organic growth continuing in the centres that we already operate. In July 2014 we purchased the freehold of Lumbry Park, Alton, Hampshire for £800,000 and we are now developing plans for fitting it out as a first-class multi-disciplinary referral centre. This centre is expected to open in the summer of 2015.
It is pleasing to report that significant growth has continued in Animed Direct, our online dispensary. It is currently generating some £10.4 million of annualised revenue, based on revenue for June 2014, compared with £6.7 million based on June 2013. The varying regulatory requirements in Europe have led to a slight delay in launching our planned local language European websites and the first is now expected to be launched within the next few months.
Acquisition activity has continued to play an important part in the Group's strategy. In addition to the seven practices acquired in the first half of the year, three practices - 3 Mile (Glasgow), Ashfield (3 sites around Halifax) and Castle (3 sites in Barnard Castle, County Durham) - and a pet crematorium (Silvermere Haven in Cobham) were acquired during the second half. These acquisitions extend the Practice Division's operations and the practices are an excellent geographic fit with the Group's existing surgeries. The acquisition of Silvermere Haven is an important step in the geographic development of our Crematoria Division and will allow almost all of our practices to be serviced internally.
All of the acquisitions have been successfully integrated into the Group. The aggregate turnover of acquisitions in their last financial year prior to acquisition totalled £13.3 million. The actual post acquisition turnover of businesses acquired during the year ended 30 June 2014 was £6.6m.
The Group now operates a total of 262 veterinary practices across the UK, an on-line dispensary, 5 diagnostic laboratories and 3 pet crematoria.
The Board is encouraged by the recent improvement in like-for-like sales performance, the continuing potential for further acquisitions and the general progress in all divisions of the Group.
For further enquiries please contact:
CVS Group plc: 01379 644 288
Simon Innes - Chief Executive
Nick Perrin - Finance Director
N+1 Singer (Nominated Adviser & Broker) 020 7496 3000
Aubrey Powell / Alex Wright
Nick Owen