Veterinary and pet services company CVS (CVSG) delivered a solid 4 per cent like-for-like sales hike at the full-year stage, helped by a growing online platform and an enhanced customer loyalty scheme. That's not bad, given that recessionary conditions are hitting footfall at veterinary surgeries. Growth is being boosted with acquisitions - CVS spent £2.6m on deals, with four acquisitions in the period and two more subsequently.
The customer loyalty scheme allows CVS to cross-sell products to its existing customer base and it's proving a hit with pet-owners - membership numbers rose 33 per cent to 87,000, which contributed about 7 per cent to the practice division's income. Meanwhile, growth at the Animed Direct online sales platform helped the core veterinary practice segment, which has 240 surgeries in the UK, to boost revenues by 8 per cent to £54.7m. Accordingly, divisional cash profit rose 10 per cent to £10.1m, with the more profitable surgeries off-setting the lower margin online offering. In addition, better volumes at the laboratory division meant a 6 per cent sales increase to £4.7m, although price competition meant cash profits here were £173,000 lower at £451,000.
Broker Peel Hunt upgraded its 2013 forecasts by 3 per cent and now expects pre-tax profit of £12.7m, giving EPS of 17.3p (£12m/19.2p in 2012).
CVS (CVSG) | ||||
|---|---|---|---|---|
| ORD PRICE: | 188p | MARKET VALUE: | £108m | |
| TOUCH: | 185-191p | 12-MONTH HIGH: | 190p | LOW: 114p |
| DIVIDEND YIELD: | 0.8% | PE RATIO: | 26 | |
| NET ASSET VALUE: | 38p* | NET DEBT: | 140% | |
| Half-year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2011 | 54.0 | 1.12 | 1.70 | nil |
| 2012 | 58.3 | 2.96 | 3.70 | nil |
| % change | +8 | +164 | +118 | - |
Ex-div:- Payment:- *Includes intangible assets of £51.7m, or 90p a share | ||||
