Earnings release
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RNS Number : 3987S CVS Group plc 24 July 2025 For immediate release 24 July 2025 CVS Group plc("CVS" or the "Company" and, together with its subsidiaries, the "Group") Full year trading updateFY25 Adjusted EBITDA for continuing operations in line with market consensusContinued growth in the Australian market CVS, the UK listed veterinary group and a leading provider of veterinary services is pleased to issue thefollowing update on trading for the financial year ended 30 June 2025 ("FY25") . In light of the CMA's decision to delay the publication of its Preliminary Decision to September 2025, the Groupwill now announce its full year results on 7 October 2025. This should enable stakeholders to have morevisibility and details of the CMA's Provisional Decision, at the time of the Group's full year results. FY25 Highlights· Full year revenue growth for its continuing operations of 5.4% to £673.2m (unaudited) with like-for-like salesincreasing by 0.2% (FY24: £638.7m, like-for-like 2.9%)· The Group saw improved revenue and like-for-like growth in the final quarter· As previously announced, full year revenue growth and like-for-like sales were impacted by softer marketconditions in the UK. Like-for-like sales performance across CVS's core Veterinary Practice division was1.0% for the year· The Group expects to report FY25 Adjusted EBITDA for continuing operations of approximately £134m, inline with market consensus (unaudited) (FY24: £123.0m)· Adjusted EBITDA margin for continuing operations improved to c.20% for the full year (FY24: 19.3%), withinour stated guidance of 19% to 23%· Expansion in Australia continues, with seven practice acquisitions (comprising 15 practice sites) in the year, for an aggregate initial consideration of A$57.9m / £29.2m. A further two site practice acquisition hascompleted post year end, bringing the footprint to 30 practices comprising 45 practice sites· The Group continues to adopt a disciplined approach to capital expenditure, investing toward the lower end of the guidance range at £33.2m in the year· As announced on 24 April 2025, CVS undertook the decision to divest its Crematoria operations for initialcash consideration of £42.4m which represents a 10x multiple of adjusted EBITDA. The capital generatedprovides additional firepower for continued selective investment in the UK and expansion in Australia· Proceeds from the divestment decreased net bank borrowings to £131.4m (31 December 2024: £182.9m,30 June 2024: £168.0m) with leverage expected to be c.1.2x as at 30 June 2025 (31 December 2024:1.66x, 30 June 2024: 1.54x). The Group continues to maintain significant headroom with committedundrawn bank facilities of over £200m and leverage remains well below the stated target of less than 2.0x Acquisitions: AustraliaThe Group continued to increase its presence in Australia, successfully building on its established platformcompleting a further seven acquisitions of small animal first opinion practices comprising 15 practice sites in thefinancial year, for initial consideration, net of cash acquired of A$57.9m / £29.2m (see note 8 for details). Since the year end, the Group has completed the further acquisition of Toorak Road Veterinary Clinic andCaulfield Veterinary Hospital in Melbourne, a small animal first opinion practice comprising two practice sites. The Group now operates across 30 practices, comprising 45 practice sites. The Board is pleased with theperformance in Australia with the acquisitions collectively performing ahead of the Group's business plans, partlydriven by buying synergies. The Group has a strong pipeline of potential acquisition opportunities and is confident that it will complete anumber of further small animal practice acquisitions in FY26, that will contribute to future growth of the Group. United KingdomThe Group's acquisition activity in the UK remains on hold pending the outcome of the CMA market investigationwith no UK acquisitions in the period. The Group believes there will be accretive UK acquisition opportunities indue course. Crematoria operations disposalAs previously announced CVS completed the disposal of its Crematoria operations on 15 May 2025. CVS isexpected to record a profit on disposal in the region of £32.0m in its FY25 accounts in relation to the disposal. The proceeds of £42.4m have reduced Group leverage, as described above, and the capital generated providesadditional firepower for continued selective investment in the UK and expansion in Australia. 4 1 2 3 3 3 4 5 4 8 4 6 7
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Competition and Markets Authority The Group continues to engage proactively with the CMA and has submitted a detailed response to their recent remedies working paper. Whilst we are disappointed with the CMA's decision to extend the statutory timetable, we are optimistic that the extension will improve the ultimate remedy package and ensure it is proportionate. The Board looks forward to the publication of the Provisional Decision by the CMA in September 2025. OutlookCVS has strong long-term prospects and great people. The fundamentals of the sector remain very strong withan increased population of pets post COVID, pet life expectancy increasing, continued humanisation of pets andfurther advancements in the provision of clinical care. With the Group's strengthened balance sheet and successful establishment of a meaningful Australia operation,the Group is well placed to deliver further inorganic revenue and adjusted EBITDA growth. Notwithstanding the ongoing economic uncertainty in the UK, CVS remains well positioned to deliver attractivegrowth in shareholder value over the medium and long term. The Board reiterates its thanks to CVS colleagues and all the Group's key stakeholders and looks forward todelivering further growth in the year ahead. Notes:1. Numbers included are unaudited 2. Numbers are shown for continuing operations only and exclude the Crematoria operations which were sold on 15 May2025, as announced on 24 April 2025, FY24 comparators where indicated are adjusted to remove these discontinuedoperations 3. Like-for-like sales shows revenue generated from continuing like-for-like operations compared to the prior year, adjustedfor the number of working days and on a constant currency basis. For example, for a practice acquired in September 2023,revenue is included from September 2024 in the like-for-like calculations 4. Adjusted EBITDA is calculated by reference to profit before tax for continuing operations, adjusted for interest (net financeexpense), depreciation, profit or loss on disposal of property, plant and equipment, amortisation, costs relating to businesscombinations and exceptional items. Adjusted EBITDA is an alternative performance measure and is defined in note 1 of the2024 Annual Report. Adjusted EBITDA margin is Adjusted EBITDA dividend by Revenue 5. Internally compiled market consensus adjusted EBITDA is £133.3m 6. Net bank borrowings is drawn bank debt less cash and cash equivalents 7. Leverage on a bank test basis is net bank borrowings divided by 'Adjusted EBITDA', annualised for the effect ofacquisitions, deducting acquisition fees and adding back share option costs, on an accounting basis prior to the adoption ofIFRS 16 8. FY25 Practices Acquired: Practice name % acquiredDate of acquisition Pet Universe Veterinary Centre 100% 02 July 2024 Direct Vet Services 100% 02 September 2024 Northcote Animal Hospital 100% 18 November 2024 Cessnock Veterinary Hospital, VetcareAberglasslyn & Vetcare Kurri 100% 21 November 2024 Ripley Valley Veterinary Hospital Pty Ltd100% 21 November 2024 VPP Group PTY Ltd t/a VeterinaryPractice Partners 70% 24 April 2025 Beach Street Veterinary Clinic 100% 28 May 2025 CVS Group plc via CamarcoRichard Fairman, CEORobin Alfonso, CFOPaul Higgs, Chief Veterinary Officer Peel Hunt LLP (Nominated Adviser & Joint Broker) +44 (0)20 7418 8900Christopher Golden / James Steel / Andrew Clark Berenberg (Joint Broker) +44 (0)20 3207 7800Toby Flaux / Michael Burke / Milo Bonser Camarco (Financial PR) Ginny Pulbrook +44 (0)7961 315 138Letaba RimellTilly Butcher 4
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About CVS Group plc (www.cvsukltd.co.uk)CVS Group is an AIM-listed provider of veterinary services with operations in the UK and Australia. CVS isfocused on providing high-quality clinical services to its clients and their animals, with outstanding and dedicatedclinical teams and support colleagues at the core of its strategy. The Group now operates c.470 veterinary practices across its two territories, including specialist referralhospitals and dedicated out-of-hours sites. Alongside the core Veterinary Practices division, CVS operatesLaboratories (providing diagnostic services to CVS and third-parties) and an online retail business ("AnimedDirect"). The Group employs c.8,900 personnel, including c.2,400 veterinary surgeons and c.3,300 nurses. This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com. RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our Privacy Policy. END TSTKZGZNKDFGKZG