CVS Group profits soar as UK pet ownership boom continues to boost veterinary services business after M&A frenzy
- The veterinary services provider’s full-year profit rose by a third to £25.7 million
- Sales were boosted by a strong performance by its online retail arm, Animed Direct
- Since the pandemic began, there has been a surge in the number of Brits adopting animals
The CVS Group has reported another surge in profits as a rising UK pet population helped the company through a tougher economic climate.
The veterinary services provider’s profits rose by a third to £25.7 million for the year ended June 30, thanks to lower acquisition costs and an 8.6 per cent increase in sales to £554.2 million.
Sales were boosted by a strong performance of its online retail business Animed Direct and the release of pent-up demand for non-essential procedures that had been postponed by Covid-related restrictions.
Treatment: CVS Group sales were boosted by the release of pent-up demand for non-essential procedures postponed by Covid-related restrictions
Organic sales were responsible for most of the top-line growth, although the company made nine acquisitions during the fiscal year.
One of those acquisitions involved Quality Pet Care, which the company was then forced to sell after the UK competition regulator said the transaction was likely to result in a “significant reduction” in competition in certain local areas.
This resulted in CVS incurring a one-off impairment charge of £12.4m, although the overall cost remained low enough to ensure the group saw an increase in profits.
The London-based veterinary practice operator has seen significant growth in recent years as UK pet ownership boomed during the pandemic.
About 5.4 million pets have been purchased since March 2020, while more than a third of UK pet owners got their first pet, according to a report by the veterinary organization PDSA published in late June.
Membership in CVS’s Healthy Pet Club and Healthy Horse programs, which offer discounts and the ability to spread the cost of preventative veterinary care over a longer period of time, rose another 4.4 percent to $475,000.
Richard Fairman, Chief Executive of the Company, said: ‘The veterinary market remains resilient, with a growing pet population providing favorable momentum and a strong platform for sustained growth in our integrated services.’
CVS employs an estimated 5,000 nurses and veterinarians in more than 500 veterinary practices across the UK, Republic of Ireland and the Netherlands, including 35 off-hours locations and eight specialist referral hospitals.
Last month the company opened a location in a Dobbies garden centre, Britain’s largest garden center retailer and once owned by supermarket giant Tesco.
In addition, there are plans to open three more Greenfield branches and a new veterinary clinic in Bristol in the current financial year.
Company Chairman Richard Connell said: “The veterinary sector is seeing favorable market and consumer trends with a growing pet population, longer life expectancies and the continued humanization of pets, with owners willing to spend more on their care.
‘Our approach to providing the best possible care through our fully integrated veterinary service delivery model positions CVS well to benefit from these favorable trends.’
CVS Group shares rose 1.1 percent to £16.27 early Thursday afternoon, despite its value falling over 36 percent over the past 12 months.
