CVS PBT dips 37.1% to £38.2m
Its statutory profit for the year also decreased from £41.9m to £6.4m, down 84.7% after recognising a loss of £20.0m on disposal of the discontinued Netherlands and Republic of Ireland operations
UK veterinary services provider CVS has reported a 37.1% decline in its profit before tax to £38.2m (2023: £60.7m) despite a 9.9% increase in revenues to £647.3m for the year ended 30 June 2024.
The group attributed this drop to an increase in business combination costs, finance expense and depreciation from investments made, and £5.8m of exceptional costs in relation to the cyber incident, cloud migration and the Competition and Markets Authority (CMA) process.
Its statutory profit for the year also decreased from £41.9m to £6.4m, down 84.7% after recognising a loss of £20.0m on disposal of the discontinued Netherlands and Republic of Ireland operations.
Group LFL sales increased 2.9% compared with 7.3% in 2023, below its stated ambition of 4%-8% due to a combination of softer demand given wider publicity around the veterinary sector and the continued cost of living pressures, the impact of the cyber incident announced on 8 April 2024, and disruption from the accelerated migration of our practice management system to the cloud.
However, the veterinary group’s adjusted EBITDA increased 4.7%, to £127.3m, through acquisitions, a continued focus on the provision of high-quality care, and net Research and Development Expenditure Tax Credits of £12.8m (2023: £9.6m).
Looking ahead, the group stated despite facing short term headwinds in the UK from softer demand and the ongoing CMA possess, fundamentals of the veterinary sector “remain strong”, and CVS is “well positioned to deliver attractive growth in shareholder value over the medium term”.
Richard Fairman, CEO of CVS, said: “We have faced a number of challenges in the past financial year with our financial results adversely impacted by the cyber attack, the subsequent migration to a new cloud based practice management system and the impact from the CMA Market Investigation announced in May 2024. Notwithstanding this, the fundamentals of the sector remain strong and we have laid the foundations for future growth.
“We successfully entered the Australian veterinary services market with 24 practices (31 practice sites) acquired to date, and CVS’ reputation established as an organisation that focuses on people and the provision of appropriate care to our clients and their animals. I am delighted to welcome colleagues from all our newly acquired practices to the group.”
He added: “In line with our stated strategy, we continue to invest in our UK practice facilities and equipment and have progressed our technology transformation with 375 of our 430 UK practices now operating on our new cloud-based practice management system. We also established a new clinical governance framework in the year which reflects our commitment to drive standards within the profession, and to support our clients in providing appropriate care to their animals.
“I am privileged to lead a team of outstanding colleagues who care passionately about our clients and their animals under our care. I would like to take this opportunity to thank them all for their commitment and dedication and I look forward to delivering further growth in 2025 and beyond.”
