LONDON (ShareCast) - (Sharecast News) - CVS Group reported a 19.2% improvement in revenue in its final results on Thursday, to £510.1m, with "strong" group like-for-like growth of 17.4% benefitting from "favourable" market dynamics, and its focus on providing quality care to clients and animals.
The AIM-traded veterinary services provider said it delivered adjusted EBITDA growth of 37.3% to £97.5m for the year ended 30 June, which it put down to the increase in revenue across all divisions, and "effective" cost management.

Profit before income tax increased 234.3% to £33.1m, while leverage fell to 0.68x from 1.14x, as a result of strong EBITDA growth and a reduction in net debt.

Cash generated from operations decreased to £80.3m from £94.8m, despite the increase in adjusted EBITDA, due to VAT and taxes deferred in the prior year amid the Covid-19 pandemic, paid in the current year.

Looking ahead, CVS reported total sales growth of 17.5% in the first two months of the new financial year, with like-for-like sales up 14.4% thanks to a further price increase in July, in addition to the delayed price increase implemented in January.

It reported a "strong" adjusted EBITDA margin of 19.5% for the first two months, up from 18.7% a year earlier, while its vet vacancy rate was "stable", averaging 8.8% for the last 12 months to the end of August, compared to 6.8% a year ago, with "continued initiatives" in place to attract and retain talent.

Those initiatives included an acceleration in annual pay increases from 1 July to align with the start of the financial year, while remuneration was changed in line with feedback focusing on fixed income for clinicians, and introducing bonus schemes to reward collaboration across the group, with an additional day's holiday awarded for each year worked at CVS, up to a maximum of five years.

Continued growth was reported in the company's 'Healthy Pet Club' scheme to 455,000 members as at 31 August, up 7.9% year-on-year.

CVS noted that it had made one new acquisition since the financial year ended, adding that its leverage was "flat" at 0.7x, compared to 0.8x at the end of August 2020.

"We have delivered a very strong performance for the year with credit to every single one of our colleagues for their extraordinary efforts to provide the best possible service to our customers and their animals, against a difficult backdrop of restrictions and evolving regulatory guidance," said chief executive officer Richard Fairman.

"These results demonstrate the resilience of our fully integrated veterinary model and our commitment to providing the very highest standards of clinical care.

"We continue to expand and develop our business, and, alongside our ongoing investments in high quality facilities and practices, we have welcomed a number of new vets and nurses to the group, as demand for veterinary services continues to increase in light of rising pet ownership."

Fairman said the company was looking into a number of opportunities to grow the business through favourable consumer trends, further improving its specialist offering, and by continuing to invest in support.

"Although management expectations for the full-year are not based on attaining annual growth at the high levels of the first two months, the very positive start to the new financial year is encouraging.

"We remain focused on providing first class veterinary care and look forward with confidence."

At 0854 BST, shares in CVS Group were up 2.81% at 2,565p.

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