TIDMCVSG
RNS Number : 2786H
CVS Group plc
23 November 2022
23 November 2022
CVS Group plc
("CVS" or the "Group")
AGM Statement and Trading Update
CVS, the AIM-quoted veterinary group and one of the UK's leading
providers of integrated veterinary services, is holding its Annual
General Meeting at 11.00am today and provides the following update
to shareholders ahead of the meeting.
Summary
-- Positive start to the financial year with total sales
increasing by 7.4% in the first four-months to 31 October 2022 (vs.
the same period last year)
-- Like-for-like sales (1) in creased by 7.4% for the same
period, within the organic revenue ambition of between 4% and
8%
-- Adjusted EBITDA (2) margin for the four months in line at
c.19%, within the adjusted EBITDA margin ambition of between 19%
and 23%
-- The Group has completed a further two acquisitions bringing
the total to four acquisitions comprising seven practice sites in
the financial year to date, for initial consideration of
GBP22.1m
-- Further investment under the Group's ambition, as outlined at
the recent Capital Markets Day (CMD), to drive growth and benefits
to the Group through practice refurbishment, relocations, clinical
equipment and technology with GBP10.8m total Capex spent year to
date (31 October 2021: GBP7.1m)
-- Good operating cash conversion with leverage (3) remaining
comfortably below 0.5x at 31 October 2022, reflecting the positive
trading performance coupled with continued strong cash
generation
Current Trading
The Board is pleased to report a positive start to the financial
year with performance in the first four months in line with our
expectations.
In the four-month period to 31 October 2022, the Group's total
sales grew by 7.4% and like-for-like sales (1) also in creased by
7.4%, reflecting positive performance across all business areas
with continued resilient customer demand for our range of
integrated veterinary services.
Our Healthy Pet Club preventative care scheme has seen a further
increase in membership, with 479,000 members as at 31 October 2022
(31 October 2021: 458,000 members) reflecting an increase of 4.6%
over the last twelve months.
The Group continues to benefit from its integrated veterinary
platform with adjusted EBITDA (2) margin remaining in line with the
previous corresponding period at c.19%.
Good operating cash conversion leading to leverage (3) on a bank
test basis remaining in line with management expectations and
comfortably below 0.5x (30 June 2022: 0.40x). The Group has
continued to ramp up its investment in practice refurbishment,
relocations, clinical equipment and technology with GBP10.8m
invested in the year to date vs GBP7.1m in the prior year
corresponding period. The Group is well placed for further
investment to drive organic and inorganic growth.
Acquisitions
The Group has completed a further two acquisitions bringing the
total to four acquisitions comprising seven practice sites in the
financial year to date, for combined initial consideration of
GBP22.1m:
-- Werrington Vets - Single site practice in Peterborough acquired July 2022
-- Woodlands Vets - Two site practice in Cheltenham acquired September 2022
-- Market Cross Veterinary Clinic - Single site practice in Edinburgh acquired October 2022
-- Seadown Vets - Three site practice in Southampton acquired November 2022
Subject to shareholder approval at the AGM, CVS intends to
complete a further acquisition in November 2022 of The Harrogate
Vet, a single site practice in Harrogate. CVS continues to monitor
its UK pipeline along with new international territories in support
of its targeted acquisition strategy.
Dividend
As previously announced, and subject to shareholder approval at
the AGM, CVS intends to pay a dividend of 7.0 pence per ordinary
share on 2 December 2022 to holders on the register as at 18
November 2022. The ex-dividend date for this timetable is 17
November 2022.
Outlook
We continue to focus on our purpose to provide the best possible
care to animals through our integrated platform and to invest in
our practices and clinical equipment to drive organic growth,
whilst continuing to explore acquisition opportunities in both the
UK and internationally. Whilst mindful of the wider macro-economic
uncertainty, the Group continues to trade in line with full year
market expectations and the Group remains well placed to achieve
further growth over the longer term and deliver on our ambitions as
set out at the CMD.
The Board recognises the opportunity to further increase its
diversity, and commenced a formal search process to appoint an
additional Non-Executive Director in the previous financial year.
The Board is determined to select the most appropriate candidate,
and is confident that this search process will be concluded with a
suitable appointment in the current financial year.
The Board would like to thank all members of the CVS team for
their continued dedication and support.
Notes
1. Like-for-like sales shows revenue generated from
like-for-like operations compared to the prior year, adjusted for
the number of working days. For example, for a practice acquired in
September 2021, revenue is included from September 2022 in the
like-for-like calculations.
2. Adjusted EBITDA (Earnings Before Interest, Tax, Depreciation
and Amortisation) is profit before tax adjusted for interest (net
finance expense), depreciation, amortisation, costs relating to
business combinations, and exceptional items. Adjusted EBITDA
provides information on the Group's underlying performance and this
measure is aligned to our strategy and KPIs.
3. Leverage on a bank test basis is drawn bank debt less cash
and cash equivalents, divided by adjusted EBITDA annualised for the
effect of acquisitions, including costs relating to business
combinations and excluding share option costs, prior to the
adoption of IFRS 16.
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
Toby Strong
+44 (0)7789 151 644
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), Buying Groups 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.
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END
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November 23, 2022 02:00 ET (07:00 GMT)
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