The initial two-thirds of CVS’s (CVSG) financial year started well, with like-for-like sales rising by 8 per cent. But the outbreak of Covid-19 and subsequent lockdown dealt a blow to the veterinary group’s small-animal, specialist referral and equine revenue streams – leading growth to temper to just 0.7 per cent for the full reporting period to June.
The adjusted cash profit margin landed at 12.9 per cent, down from 13.4 per cent on the prior year. Still, this gave rise to a 1.5 per cent improvement in profits to £55.3m, ignoring the impact of accounting rules pertaining to leases – beating broker Peel Hunt’s forecast by more than a tenth.
It helps that CVS turned to the government for support during the pandemic, using the job retention scheme to place more than half of all if its employees on furlough. It also took internal steps to preserve cash – such as cutting non-essential spend and management taking voluntary wage reductions. The group is not paying a dividend for the time being.
Peel Hunt puts adjusted EPS at 51.7p for FY2021, from 34.2p in FY2020.
| CVS (CVSG) | ||||
| ORD PRICE: | 1,170p | MARKET VALUE: | £ 827m | |
| TOUCH: | 1,184-1,1198p | 12-MONTH HIGH: | 1,250p | LOW: 707p |
| DIVIDEND YIELD: | nil | PE RATIO: | 144 | |
| NET ASSET VALUE: | 236p* | NET DEBT: | 37.0% | |
| Year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2016 | 218 | 9.1 | 11.6 | 3.5 |
| 2017 | 272 | 14.5 | 18.5 | 4.5 |
| 2018 | 327 | 14.1 | 16.0 | 5.0 |
| 2019 | 407 | 11.7 | 11.6 | 5.5 |
| 2020 | 428 | 9.9 | 8.1 | nil |
| % change | +5 | -15 | -30 | - |
| Ex-div: | na | |||
| Payment: | na | |||
| *Includes intangible assets of £230m or 325p a share | ||||
