Annual adjusted cash profits of £47.6m for veterinary practice operator CVS (CVSG) fell slightly short of broker Peel Hunt’s estimates. The impact of heavy snow earlier this year, combined with higher wage costs, offset an otherwise strong top-line performance, with like-for-like sales rising nearly 5 per cent. The underperformance of recent acquisitions – largely the result of staffing issues – was also disappointing, although analysts remain confident the business can get this under control during the current financial year.
Last year, CVS acquired 52 surgeries, and bought another 16 post-period-end, taking the estate total to 491. Together, the acquired businesses contributed £18.9m-worth of revenue. But adjusted cash profits as a percentage of sales fell from 18 per cent to 16.9 per cent, suggesting income struggled to find its way to the bottom line.
For now, analysts at Peel Hunt still expect pre-tax profits of £47.2m for the year ending June 2019, giving EPS of 55.6p, moving up to £50.6m and 58.7p in FY2020.
| CVS (CVSG) | ||||
| ORD PRICE: | 985p | MARKET VALUE: | £693m | |
| TOUCH: | 985-988p | 12-MONTH HIGH: | 1,500p | LOW: 826p |
| DIVIDEND YIELD: | 0.5% | PE RATIO: | 62 | |
| NET ASSET VALUE: | 224p* | NET DEBT: | 44% | |
| Year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2014 | 143 | 6.3 | 8.3 | 2.5 |
| 2015 | 167 | 8.5 | 11.6 | 3.0 |
| 2016 | 218 | 9.1 | 11.6 | 3.5 |
| 2017 | 272 | 14.5 | 18.5 | 4.5 |
| 2018 | 327 | 14.1 | 16.0 | 5.0 |
| % change | +20 | -3 | -14 | +11 |
| Ex-div: | 22 Nov | |||
| Payment: | 7 Dec | |||
| *Includes intangible assets of £204m, or 289p a share | ||||
