27th Sep 2019 07:54
(Alliance News) - Veterinary services firm CVS Group PLC on Friday reported a decline in annual profit, but said performance improved "significantly" in the second half of the year.
CVS reported a 17% fall in pretax profit for the year to June 30 to GBP11.7 million. However, the adjusted figure climbed 15% to GBP41.4 million.
CVS posted revenue of GBP406.5 million, 24% higher than the year before, and like-for-like revenue was 5.2% higher.
The decline in profit came as cost of sales climbed 35%, well ahead of revenue growth, while there was also a 14% rise in administrative costs.
There was a "significant" second half improvement, CVS said. It will be paying a dividend of 5.5 pence per share for the year, up 10% on the year before.
"The group delivered a significant improvement in financial performance in the second half of the financial year following a disappointing first half. This improvement reflects our actions in addressing the key issues which had impacted performance and I am pleased the group continues to show positive trends in the early part of the new financial year," said Chair Richard Connell.
"CVS operates in a sector with favourable market and consumer trends which has proven resilient in past economic downturns."
The core Veterinary Practices unit delivered a 25% rise in revenue to GBP370.5 million and adjusted earnings before interest, taxes, depreciation, and amortisation was 12% higher at GBP56.2 million.
Looking ahead, CVS said pet owners are increasingly happy to spend money on their pets, and overall, is it confident on continuing the performance registered in the second half of its recently ended year.
"Multiple initiatives are being pursued to drive further organic growth and the group continues to generate strong operating cashflow. This positions the business well for further investment in our people and facilities and a continued focus on delivering the highest standards of clinical care," added Chair Connell.
"We will explore selective acquisitions where the board is confident that they generate appropriate returns."
By George Collard; [email protected]
Copyright 2019 Alliance News Limited. All Rights Reserved.
Related Shares:
CVS Group