Veterinary services company CVS (CVSG) spent most of last year integrating a series of acquisitions, which significantly boosted the company's reported performance. Moreover, and even after factoring in the high levels of disruption from a weather-hit first half, underlying like-for-like sales still grew 3.4 per cent - an important indication that CVS is returning to sustainable rates of growth.
At the core veterinary practice division, acquisitions over the past two years have helped sales to advance by 9.3 per cent to £108m, with cash profits having grown by 7.7 per cent to £20.1m. CVS appears to have successfully offset margin pressure, too, by negotiating favourable rates on its most popular products - accordingly, the divisional margin increased to 73.7 per cent compared with 71.8 per cent a year ago. By contrast, tough competition meant the animal laboratory unit posted flat cash profits of £1.1m, despite sales having increased by 7.7 per cent to £9.8m. The online retail business, Animed Direct, reported a 63 per cent rise in revenues to £4.9m, but profits reached just £0.2m.
Broker Investec Securities expects pre-tax profit for 2014 of £13.4m, giving EPS of 17.1p (from £12.1m and 15.6p in 2013), rising to 17.6p in 2015.
CVS (CVSG) | ||||
|---|---|---|---|---|
| ORD PRICE: | 240p | MARKET VALUE: | £137m | |
| TOUCH: | 237-244p | 12-MONTH HIGH: | 247p | LOW: 140p |
| DIVIDEND YIELD: | 0.8% | PE RATIO: | 34 | |
| NET ASSET VALUE: | 43p* | NET DEBT: | 121% | |
| Year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2009 | 76.6 | 4.44 | 5.90 | nil |
| 2010 | 86.0 | 3.84 | 5.70 | nil |
| 2011 | 101 | 4.25 | 6.20 | 1.00 |
| 2012 | 109 | 3.80 | 5.10 | 1.50 |
| 2013 | 120 | 5.50 | 7.10 | 2.00 |
| % change | +10 | +45 | +39 | +33 |
Ex-div: 4 Dec Payment: 20 Dec *Includes intangible assets of £53.5m, or 94p a share | ||||
