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CVS Group to raise capital as profit falls, despite revenue boost

StockMarketWire.com

Veterinary clinic company CVS Group posted a 23.1% fall in first-half profit after rising costs offset an acquisition-related surge in revenue.

The company also announced a discounted £40m equity raising at 'not less than 1050 pence' to fund more acquisitions.

Pre-tax profit fell to £6.2m, from £8.0m in the previous corresponding period.

Revenues grew by 21.9% to £157.8m and adjusted EBITDA rose by 15.5% to £24m. Revenue growth was unpinned by both acquisitions and 5.6% jump in like-for-like sales.

Operating profit fell £8.1m (2016: £9.5m) weighed by the amortisation of intangible assets, deferred consideration and the costs of acquisitions.

Adjusted profit before tax, which excludes the amortisation of intangible assets, increased by 10.8% to £18.3m and adjusted earnings per share rose by 6.5% from 21.5p to 22.9p.

The final dividend was expected to be at least equal in value to that of 2017.

Chairman Richard Connell said: 'The Board is pleased to report that trading since the half year end is in line with expectations. The first half of the year saw a higher level of volatility in sales than in the past, but recent months have appeared more regular. With our wide range of organic opportunities, healthy cash generation and a strong acquisition pipeline, the Board looks forward with confidence to the remainder of the year and beyond.'

'The Board believes that the UK veterinary sector will continue to provide opportunities for further consolidation and strategic acquisitions across each of the small animal, equine and farm animal segments. It is pleasing to note that, even following an extended period of exceptionally high activity, the Group's pipeline of potential acquisitions remains very strong, both in the UK and in the Netherlands.'

'The Group will continue to build on the many strengths of its existing business: the development of the referral businesses; the expansion of our range of own brand products; further development of out-of-hours centres; the development of our greenfield and relocated sites; and the growth of MiPet Cover, our own brand pet insurance.' At 8:19am: (LON:CVSG) CVS Group PLC share price was -145p at 1075p



Story provided by StockMarketWire.com