27th Mar 2020 11:05
(Alliance News) - Veterinary surgery firm CVS Group PLC on Friday reported a rise in interim profit, driven by double-digit revenue growth from all operations.
For the six months to the end of December, pretax profit rose fivefold to GBP6.7 million from GBP1.6 million the year before, on revenue that increased by 15% to GBP224.5 million from GBP195.1 million.
CVS's profit performance was helped by a drop in administrative expenses year-on-year to GBP70.9 million from GBP78.0 million.
Segmentally, the Veterinary Practice generated GBP203.5 million for the six-month period, reflecting 14% growth year-on-year, while like-for-like sales growth was 7.4%.
This was due to a 7.5% rise in members of the Health Pet Club scheme to 415,000 members as at the end of December, as well as the continued expansion of the referrals business.
CVS's smaller divisions also reported growth, with the Laboratory division growing in revenue by 17% to GBP10.9 million, and online dispensary business Animed Direct's revenue rising by 37% to GBP14.7 million.
CVS does not pay an interim dividend.
Looking ahead, CVS reported a continued strong performance in the first two months of its second half period. For the eight months to the end of February, like-for-like sales growth had reached 7.9%.
However, in more recent weeks, restrictions on physical movement and reduced visits as a result of the Covid-19 pandemic has led to a reduction in small animal revenue.
In addition, due to the Royal College of Veterinary Surgeons and the British Veterinary Association guiding that veterinary practices should only remain open for urgent and emergency care, CVS expects a significant drop in small animal billable visits and revenue.
As a result, the group is closing half of its small animal practices during the UK lockdown period.
Shares in CVS Group were 12% lower at 753.50 pence on Friday in London.
"Whilst the full impact of the Covid-19 pandemic is unknown, the board is confident that it is taking all appropriate steps in order to protect its employees, maintain business operations, preserve cash and income streams and continue to provide essential patient care," said Chair Richard Connell.
By Dayo Laniyan; [email protected]
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