CVS is pick of the litter

In the year to June CVS added 29 surgeries to its estate and one more crematorium. In total these businesses should generate more than £24m in annual sales for the group, having added £7.7m to revenues and £1m to cash profits during FY2015. Since the year-end the group has bought an additional eight surgeries, including a new 'referral centre' in Castle Donnington. By referral centre management means a clinic akin to a pet hospital to which vets can refer pets with more serious ailments.

CVS divides its business into four parts: veterinary practices, laboratories, crematoria and Animed Direct – its online retail site for pet medicines. The practices are considered the backbone of the business, and last year like-for-like sales there rose 5.6 per cent. The group’s booming loyalty scheme – Healthy Pet Club – may have helped drive organic growth. Over 51,000 pets were added to the scheme, boosting member numbers by 32 per cent to 213,000.

Other parts of the business are keeping pace too. The laboratories and crematoria divisions posted like-for-like sales growth of 11 per cent and 12 per cent respectively.

Bosses admit that last year’s performance included an exceptionally strong first half, and like-for-like growth has slipped since the start of the new financial year. Yet analysts at Peel Hunt have still nudged up their forecasts. The brokerage now expects pre-tax profits of £22.2m (previously £21.5m) for FY 2016, giving EPS of 30.5p (previously 28.8p), compared to £19.4m and 27.1p for the year ended June 2015.