CVS Group PLC posts positive revenue trends after strong half-year

PLC () said the positive trends seen in the first half of the year have continued in the second half.

The veterinary services company said like-for-like sales were up 8% in the eight months to February 29, with stable clinical staff retention as the vet vacancy rate averaged 7.5%, which leads to improved margins.

MiNightVet out-of-hours services were expanded to 34 practices from 29 practices in June 2020 and four new acquisitions were made since the half-year period-end.

In the six months to December 31, revenue rose 8% to £245mln following strong demand for services, procedures and online goods during lockdown.  

Adjusted profit before tax climbed 39% to £30mln due to higher top-line sales and lower depreciation and amortisation.

Net bank borrowings decreased to £44mln at period-end, from £63mln last June, after funding £10.6mln of acquisitions in the period.

The firm said it will make a decision on the final dividend at the full-year results after skipping the interim distribution.

“The pandemic has seen pet ownership skyrocket, which offers a growth opportunity for those in the business of pet care… There’s no denying current market trends are favourable, but there’s a chance this could be the bottom of the treat tin – conditions are about as favourable as they’ll ever be,” said Sophie Lund-Yates, analyst at Hargreaves Lansdown.

“It’s true that more pets should translate into more vet visits overall, especially as they age. The group also has growth opportunities, where increased pet ownership should translate into better cross selling, especially across its digital pharmacy and retail business. However, CVS Group will need to peddle hard to keep sales at a level its valuation demands. The market’s very excited about CVS Group, but that means there’s a lot of pressure to perform.”

Shares rose 3% to 1,933.6p on Thursday morning.