Like-for-like sales rose 17.4% for the full year, helped by a strong end to the last quarter as the group lapped last year when clinics were affected by restrictions. CVS Group Plc (LON:CVSG) now expects underlying cash profits (EBITDA) to be slightly ahead of the upgraded targets announced at the end of April. EBITDA margins are expected to be higher than the 18.4% seen at the half year, and the 16.6% reported last year.
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The group expects full year net debt to be “significantly” below underlying cash profits. CVS said it’s “well placed to pursue further targeted acquisitions”.
More detailed full year results are expected on 23 September 2021.
The shares rose 2.2% following the announcement.
CVS Group's Clinics Thrive During The Pandemic
Sophie Lund-Yates, senior equity analyst at Hargreaves Lansdown commented:
“Pandemic or no pandemic, the UK still needs to care for its pets. While there was some disruption to service because of restrictions, on the whole CVS Group’s vet clinics fared much better than other businesses. As restrictions have allowed clinics to offer a wider range of treatments once more, business has boomed, allowing full year profit expectations to be upgraded yet again. A best-in-show performance is especially welcome given the group’s arguably frothy valuation. CVS Group has reached the point where even a good performance could see the share price wobble, so its results need to stand out from the crowd.
CVS Group is also likely being buoyed by the phenomenal rise in pet ownership brought about during lockdowns, which should act as a long-term boon. CVS Group’s revenues are particularly attractive, because once a pet owner registers an animal with a clinic, they’re very likely to be a repeat customer over its lifetime. Recurring revenues are somewhat of a luxury in the world of business, adding a layer of certainty others could only hope for.”
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