27th Feb 2025 14:36
(Alliance News) - CVS Group PLC on Thursday reported a decline in first-half profit due to higher costs, despite increased revenue, as the veterinary services provider said full-year trading remains in line with market expectations.
The Norfolk, England-based company said for the six months ended December 31, pretax profit stood at GBP17.4 million, down 35% from GBP26.8 million a year earlier. Diluted earnings per share fell to 15.6 pence from 20.4p.
The decline was attributed by the company to higher finance costs of GBP9.0 million, up from GBP4.8 million, following an increase in the cost of borrowing and increased bank borrowing to "support the group's strategy of investment in its practices and acquisitions".
The company also booked GBP1.4 million in exceptional costs related to an ongoing investigation from the UK's Competition & Markets Authority.
Back in May, CVS said it would continue to "proactively" support the UK competition regulator, as the CMA launched an 18-month investigation into the supply of veterinary services for household pets.
Despite the profit decline, revenue increased 6.6% to GBP341.8 million from GBP320.5 million. However, CVS Group said like-for-like sales fell 1.1%, impacted by weaker consumer demand in the UK, particularly in the company's Laboratory arm and online retail business Animed Direct.
CVS noted that its "core" Veterinary practice division showed flat performance in the period but expects year-on-year growth in the second half.
CVS Group said it continued its expansion in Australia, where it has now completed 27 acquisitions across six states since entering the market in mid-2023. "In light of the uncertainty in the UK due to the ongoing CMA market investigation, the group has reprioritised investment activity into Australia, where there is a more stable and supportive regulatory environment around the sector," the company said.
The company added that it remains confident in delivering full-year results in line with market expectations.
Chief Executive Officer Richard Fairman said: "CVS Group has increased its footprint and delivered growth in Australia, achieving enhanced returns through synergies and increasing scale benefits. There is continued demand for high-quality veterinary care, and with our focus on clinical excellence and investment in practices and people, CVS is well placed to deliver sustainable long-term growth."
Shares in CVS Group were down 2.1% at 1,036.00 pence on Thursday afternoon in London.
By Eva Castanedo, Alliance News reporter
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