7th Feb 2020 08:59
(Alliance News) - CVS Group PLC on Friday reported an "encouraging" start to its current financial year, with the improved trading continuing.
The veterinary services provider said its sales in the six months to the end of 2019 increased by 15%. On the like-for-like basis, the sales grew by 8.4%.
Gross margins narrowed slightly however in the first half to 76.0% compared to 76.2% a year prior, the company noted, primarily due to strong sales growth for Animed Direct, its online dispensary, for which margins are lower.
As a result, CVS said it expects to report adjusted earnings before interest, tax, depreciation and amortisation that is "materially" above the prior year's GBP23.8 million. This is in line with management expectations and is attributed to the better performance and the weaker year-on-year comparative.
Looking ahead, CVS said the continuing positive trends in key performance indicators provide further assurance that it is trading in line with management's expectations for the full year.
The Norfolk, England-headquartered company also said it remains focused on identifying and targeting acquisitions that are value enhancing and that complement its existing business.
CVS said it has arranged a renewal of its bank facilities previously repayable on November 23 next year, including an extension of the facilities to the end of January 2024.
As part of this renewal, the AIM-listed company said it has reduced its total bank facilities to GBP175 million from GBP195 million, reflecting the continued focus on organic growth and the strong operating cash generation.
CVS said it also has a GBP5.0 million overdraft facility renewable annually.
As at the end of 209, the company had net bank borrowings of GBP97.3 million.
The stock was trading 1.5% lower in London on Friday at 1,231.00 pence a share.
By Evelina Grecenko; [email protected]
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