PVG.L Regulatory News (PVG)

Premier Veterinary Group PLC

("PVG PLC", the "Company" or the "Group")

Trading Update

London, UK, 24 October 2018 - Premier Veterinary Group PLC (LSE: PVG) provides a pre-close trading update.

Trading update for the year ended 30 September 2018

Group turnover for the year ending 30 September 2018 is expected to be approximately £3.15m representing growth of 24% on the previous year. Unaudited Earnings before Interest, Tax, Depreciation and Amortisation ("EBITDA") for the year is expected to be a loss of £3.25m.

Growth in Pets on plan

The Group's recurring revenue streams are driven by the number of pets that are signed up to Premier Pet Care Plan ("PPCP"), a preventative healthcare programme for pets. The number of revenue generating pets on active plans for the final quarter of its 2018 financial year, and in the preceding four quarters was as follows:

The number of revenue generating pets on plan at the end of September 2018 has increased by 30% in the last 12 months to 244,000 (30 September 2017: 188,000).

UK

In the UK, the number of pets on plan has increased by 24% to 193,000 as at 30 September 2018 (30 September 2017: 156,000).

The increase in revenues from veterinary clinics driven by the continued growth in pets on plan was partially offset by a reduction in revenues from other third parties. Overall revenue for the full year ended 30 September 2018 is expected to be approximately £2m, at the lower end of management's expectations.

Europe

The number of pets on plan in Europe has increased by 50% to 42,000 (30 September 2018: 28,000).

The Group's most significant territory in Europe is the Netherlands which, as anticipated, has started to become cash generative during the latter part of the financial year. The number of pets on plan has grown by 38% to 33,000 as at 30 September 2018 (30 September 2017: 24,000). The Group is contracted with over 250 clinics, representing approximately 25% of the clinics in the Dutch market. In the last 12 months, there have been increased levels of clinic acquisitions by corporate veterinary groups. This presents both opportunities and threats for the Group's operation but as a consequence some reduction in future rates of growth are expected in the future.

In France, at 30 September 2018, there were 7,000 pets on plan (30 September 2017: 1,000). The business now has 183 clinics contracted with 117 currently launched. The pipeline of clinics to launch and the strong pipeline of new sales opportunities provides encouraging signs for continued growth in this region.

Overall the performance of the European business for the current financial year is in line with management's expectations, with revenue of approximately £0.8m. However, the pressures on growth in the Netherlands are expected to slow overall growth in Europe in the future.

US

The number of pets on plan increased to 9,000 as at 30 September 2018 (30 September 2017: 4,000). 158 clinics have currently launched PPCP and a further 98 clinics are awaiting implementation. This excludes any of the clinics referred to in the contract referred to below.

On 15 August 2018, PVG announced that it had signed a contract with a major corporate veterinary consolidator in the US ("the Customer").

The Customer has over 140 hospitals across 25 States with in excess of 700 Full Time Vet Equivalents ("FTVE"). Of these hospitals in excess of 100 are companion animal, the target market for PVG, with an FTVE compliment of over 500.

This contract ("the US contract"), initially, is to introduce PVA's preventative healthcare programme for pets, branded "Premier Pet Care Plan" ("PPCP"), to 15 of the Customer's companion animal hospitals. At the end of the pilot phase, which is expected to last between three and six months, the contract can be extended to a 3 year term with a full roll out to all of the Customer's companion animal hospitals.

The pilot clinics are being launched and of those that have been launched, the initial sign up rates achieved are significantly higher than those seen in independent clinics. Whilst the volume of data is too small at this stage to be conclusive the signs are encouraging and PVG is fully focussed on achieving a successful pilot and moving to full roll out.

The performance of the US business for the financial year ended September 2018 is below management's expectations, with revenue of approximately £0.4m. However, upon completion of a successful pilot, the above mentioned contract will be pivotal in driving the US business of PVG towards profitability.

Pipeline

PVG is in advanced discussions to finalise an agreement (the "Agreement") with a leading UK corporate group to provide collection, administration and support services to facilitate the provision of animal health plans across all of that group's outlets. The contract would provide annual revenues of approximately £1 million based on the current number of pets on plan, once fully implemented. The Agreement, if finalised, is expected to be implemented in the second half of the current financial year, so that the full benefit will not be realised until the financial year ending 30 September 2020.

Financing

As at 30 September 2018, the Group held cash balances of approximately £0.7m and has drawn down £1m of its £2.25m unsecured loan note facility with Bybrook Finance Solutions Limited ("BFSL"). A further £0.5m is scheduled to be received on 1 November 2018. Rajan Uppal, a director of PVG, is the sole shareholder and director of BFSL.

PVG requires additional funding to support the directors' going concern assessment, maximise the growth opportunities referred to above and to reach overall profitability. PVG has received outline terms from BFSL for a long term secured loan facility with an increased level of funding and earlier drawdown dates to replace the existing facility. Crossroads Finance Limited, a company jointly owned and controlled by Dominic Tonner, Chief Executive Officer of PVG, and his spouse, is expected to partake in the PVG funding by entering into direct arrangements with BFSL. The independent directors of PVG, being Graham Dick, Neil Wood and Will Evans, are discussing those terms with BFSL whilst the full Board are ascertaining what alternative funding arrangements may also be available. The directors are confident of being able to raise the additional finance required.

Outlook

Excluding the Agreement and the US contract, the outlook for further growth for the Group remains positive albeit at a slower rate than expected.

The successful signing and implementation of the Agreement would provide a significant increase in the number of pets on plan and, taken together with the roll out in the US for the Customer referred to above would underpin PVG's existing growth expectations for 2019 and beyond. It should be noted there is no guarantee that PVG will finalise an agreement or that the US pilot and any subsequent US rollout will be successful. The Board will provide an update in due course.

For further information, please contact:

The information contained within this announcement is deemed by the Company to constitute inside information stipulated under the Market Abuse Regulation (EU) No. 596/2014. Upon the publication of this announcement via the Regulatory Information Service, this inside information is now considered to be in the public domain.

Note to Editors:

PVG's services to third party veterinary practices, through its wholly-owned subsidiary, Premier Vet Alliance Limited ("PVA"), include the administration and support of a preventative healthcare programme for pets branded "Premier Pet Care Plan" ("PPCP"). In the US, PPCP is marketed through the Company's wholly-owned subsidiary, Premier Vet Alliance (US) Limited.

PPCP is a structured, preventative healthcare programme for cats, dogs and rabbits and is available only through veterinary practices. The programme is seen as a way of providing gold standard care for pets at an affordable price for the client, by way of fixed monthly payments.

PPCP uses a clinical approach to prevention, as this is the most effective method of ensuring illnesses are diagnosed more quickly and not given a chance to advance. What truly sets PPCP apart is its unique approach of offering an end-to-end solution and support to the practice, which has been proven to work extremely well. PVA works alongside practices to create a tailor-made, cost-effective service for clients, one that delivers excellent care to their patients and significantly improves practice performance.

For further details: http://www.premiervetalliance.co.uk/

This announcement includes "forward-looking statements" which include all statements other than statements of historical facts, including, without limitation, those regarding the Company's financial position, business strategy, plans and objectives of management for future operations, and any statements preceded by, followed by or that include forward-looking terminology such as the words "targets", "believes", "estimates", "expects", "aims", "intends", "will", "can", "may", "anticipates", "would", "should", "could" or similar expressions or the negative thereof. Such forward-looking statements involve known and unknown risks, uncertainties and other important factors beyond the Company's control that could cause the actual results, performance or achievements of the Company to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. Such forward-looking statements are based on numerous assumptions regarding the Company's present and future business strategies and the environment in which the Company will operate in the future. These forward-looking statements speak only as at the date of this announcement. The Company expressly disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking statements contained in this announcement to reflect any change in the Company's expectations with regard thereto or any change in events, conditions or circumstances on which any such statements are based. As a result of these factors, readers are cautioned not to rely on any forward-looking statement.