CVS, one of the UK's leading providers of integrated veterinary services, is pleased to announce its interim results for the six months ended 31 December 2020 ('H1 2021') and provide an update on year-to-date trading.
£m except where stated
Group like-for-like ("LFL") sales growth1 (%)
Adjusted EBITDA2 margin (%)
Adjusted profit before income tax3
Adjusted earnings per share4 (p)
Profit before tax
Basic earnings per share (p)
Net bank borrowings5
1 Like-for-like sales are defined as revenue generated from like-for-like operations compared to the prior year, adjusted for the number of working days. For example, for a practice acquired in September 2019, revenue is included in the like-for-like calculations from September 2020.
2 Adjusted EBITDA (earnings before interest, tax, depreciation and amortisation) is profit before income tax, net finance expense, depreciation, amortisation, costs relating to business combinations and exceptional items. Adjusted EBITDA is used as a financial metric that removes the cost of debt, costs relating to depreciation and amortisation and one-off costs to get a normalised number that is not distorted by irregular items or structural investment.
3 Adjusted profit before income tax is calculated as profit before amortisation, taxation, costs relating to business combinations and exceptional items.
4 Adjusted earnings per share is calculated as adjusted profit before income tax less applicable taxation divided by the weighted average number of ordinary shares in the year.
5 Net bank borrowings is drawn bank debt less cash at bank.
6 The Group adopted IFRS 16 Leases from 1 July 2019 and applied the standard prospectively from that date. For the year ended 30 June 2020 there were changes to accounting estimates which affected the valuation of the right-of-use asset and right-of-use liability on transition. The period ended 31 December 2019 has been restated to reflect these changes and this has resulted in an increase in Profit before income tax for that period of £0.9m, an increase in Adjusted EBITDA of £0.4m, and an increase in Adjusted Earnings per share of 1.0 pence per share.
7 Percentage increases and decreases have been calculated throughout this document based on the unrounded values.
· Continued focus on service quality and harnessing our integrated model is driving growth:
o New client registrations up by c. 17%
o Average client spend in our primary care companion practices has grown by c. 6% reflecting our focus on patient care
o Revenue from our referrals division has grown by 20.6%
o Membership of Healthy Pet Club, our preventative care scheme, up 3.6% to 430,000
· New initiatives introduced to encourage staff retention, alongside a continued focus on the recruitment of new clinicians across the Group plus improvements to training and staff welfare
· Continued support across the business to ensure safe working practices for employees and clients in the face of COVID-19
· Four new practices acquired in the period
Current Trading & Outlook
· Like-for-like sales1 growth for the Group in the first eight months of 8.2% (29 February 2020: 7.9%)
· Stable vet vacancy rate, averaging 7.5% for the first eight months (29 February 2020: 7.9%)
· MiNightVet out-of-hours services expanded to 34 practices (30 June 2020: 29 practices)
· Four new acquisitions made since half year period end
Richard Fairman, Chief Executive Officer, commented:
"I am extremely proud of the dedication, commitment and professionalism of all CVS colleagues during this period, whose support has enabled us to continue providing the highest levels of veterinary care to our customers despite the difficult and uncertain backdrop of COVID-19.
Notwithstanding the ongoing uncertainty, we delivered a strong performance in the first half of the year, with our fully integrated model allowing us to cater for the veterinary needs of an expanding pet population. Through our integrated model, we are well positioned to benefit from opportunities presented by favourable consumer trends.
Trading in the first two months of our second half continues the positive trend and we remain well positioned to achieve both organic and acquisitive future growth."