CVS's (CVSG) half-year figures were accompanied by news that the veterinary group had initiated a discounted placing of 6.4m shares at 1,050p apiece. The money raised will be used to pay down the group's growing debt pile, and fund £40m in targeted acquisitions over the next six months. The placing shares represent a maximum of 9.88 per cent of existing voting rights and will be initially dilutive for earnings.
CVS bought 30 veterinary surgeries during the half year and an additional four since the period end. The acquisition spree pushed sales up by a fifth, but strip out the impact of the new sites and you're left with a creditable organic growth rate of 5.6 per cent. Operating profit fell by 14 per cent on higher amortisation charges and acquisition-linked costs, but management highlighted a 15.5 per cent rise in cash profit.
Analysts at Peel Hunt expect pre-tax profit of £41.3m in the year to June 2018, giving EPS of 53.8p, compared with £35m and 47.4p in FY2017.
| CVS (CVSG) | ||||
| ORD PRICE: | 1,118p | MARKET VALUE: | £723m | |
| TOUCH: | 1,115-1,118p | 12-MONTH HIGH: | 1,500p | LOW: 825p |
| DIVIDEND YIELD: | 0.4% | PE RATIO: | 70 | |
| NET ASSET VALUE: | 141p* | NET DEBT: | 128% | |
| Half-year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2016 | 129 | 8.0 | 10.4 | nil |
| 2017 | 158 | 6.2 | 7.8 | nil |
| % change | +22 | -23 | -25 | - |
| Ex-div: | na | |||
| Payment: | na | |||
| *Includes intangible assets of £186m, or 287p a share | ||||
