CVS Group – Profits Rise But CMA Investigation Lingers

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  • Full year revenue rises 9.8% to £608.3m
  • Underlying cash profits (EBITDA) up 13% to £121.4m, reflecting higher revenue and investment in facilities, tech and staff
  • Entered Australian market during the year
  • Vet practices expected to deliver year-on-year growth in new financial year, despite economic uncertainties
  • The group said it will “work closely with the CMA in support” of its investigation

CVS Group Sees A 10% Jump In Revenue

“Veterinary giant CVS Group Plc (LON:CVSG) has seen its underlying profits increase by double digits following a 10% jump in revenues. Almost half a million of us are now signed up to the group’s Healthy Pet Club, which is a preventative health scheme – and crucially, is something that makes custom even stickier.

Pet owners want what’s best for their companions and that makes the vet industry a lucrative place to be, especially post-pandemic after the pet boom. Ways of life are changing to be more accommodating towards pets and the importance they hold in our lives, and a continued humanisation trend plays directly into the hands of vets, who are on hand for every overly concerned first-time dog owner.

The rapid changes in the industry have included skyrocketing treatment prices, as well as CVS Group’s continued focus on acquiring smaller local clinics and bringing them into the fold – not always in a way that’s obvious to customers. This has caught the attention of the CMA who are investigating whether the vet industry is fighting fair. Findings are due early next year, and CVS Group investors are waiting to hear what changes may be needed.

A continued struggle for the group is the recruitment and retention of vets. This is a problem plaguing the industry and keeping staff on board comes with higher expenses, which is partly why prices are so high. Of course, we’ll soon find out if the hikes have gone above and beyond reasonable and explainable levels.”

Article by Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown