Vet practices owner CVS Group (LON: CVSG) grew revenues in the UK in the first half despite weak consumer confidence, while Australia is becoming a bigger contributor. The move from AIM to the Main Market means that CVS is set to join the FTSE 250 index, which could provide additional investor interest.
In the six months to December 2025, revenues were 6% ahead at £356.9m with like-for like growth of 2.7%. Australia contributes more than 10% of revenues. Earnings improved 6% to 40.2p/share. CVS managed to offset the higher NI and other employment costs by growth in the UK and Australia, although this did put UK margins under pressure.
Net debt was £160.2m at the end of 2025, after spending £23.3m on acquisitions and £12.6m of share buybacks. There are bank facilities totalling £350m. The interim dividend has been raised from 8p/share to 8.5p/share.
Healthy Pet Club membership has been held at 516,000. Regular appointments and vaccinations have been delayed by some pet owners. There was some testing of pricing for the online services, but price reductions did not lead to higher volumes.
The final decision publication following the CMA market review process is expected in the spring and that should provide full clarity on the future of the sector. There is a DEFRA consultation that has commenced and this will influence new legislation, which may not be a few years. In this case it could end up providing greater flexibility for CVS by allowing nurses to undertake additional work.
The main focus for acquisitions is Australia, but when the CMA process is completed and the final recommendations come into force there should be opportunities in the UK. However, CVS will not be paying the same multiples for UK practices that it did in the past. This is because of the better opportunities in Australia.
Panmure Liberum forecasts an improvement in full year pre-tax profit from £79.7m to £83.9m. Debt could fall by the end of June 2026, but that will depend on the timing of further acquisitions.
The share price slipped 68p to £13.02, which means that the prospective multiple is 15. There is upside from further acquisitions in Australia and potential for growth in the UK as consumer confidence improves.