CVS Group Plc (LON: CVSG) have seen their shares spike on Thursday afternoon after they gave shareholders a positive update.
CVS Group is the largest integrated veterinary services provider in the UK encompassing four main business areas; our veterinary practices, diagnostic laboratories, pet crematoria and e-commerce division.
Shares of CVS Group spiked 9.1% on Thursday to 1,127p. 28/11/19 14:03BST.
The board announced that trading performance in the first fourth months of financial 2020 was ahead of management expectations.
The board added that amid tough trading conditions the firm continued a trend of positive trading momentum.
In the four months leading up to October 31, the firms total sales grew by 17% and like for like sales increased by 8% from the same period one year ago.
The results will thoroughly please shareholders, as 2019 has been a year of turbulence for CVS.
At the start of 2019, the firm saw its stocks in red after the firm issued a profit warning to shareholders. However it seems that strong recovery has been made across the year.
“The board is pleased to announce that the improved trading performance delivered in the second half of the financial year to 30 June 2019 and the encouraging start to the first two months of the new financial year, as announced at the time of our preliminary results on 27 September 2019, has continued in September and October 2019,” Chair Richard Connell said in his annual general meeting statement.
The Core Practices division saw a notable rise in sales by 7.4% which drove the strong trading results published.
“These LFL growth rates primarily reflect a continued focus on high quality clinical work, including increased volume and value of referrals within the group, in addition to a price increase in our Healthy Pet Club preventative medicine scheme in February 2019 and a modest price increase applied to veterinary fees in our UK small animal business on 1 July 2019,” Connell said.
CVS said its gross margins, employment costs and vet vacancy rates have all continued at a similar level to those reported at the time of financial 2019 results in September.
“The directors recognise that the comparatives become more challenging in the second half of the current financial year, given the improved second half performance seen in the previous financial year. Nevertheless, the board is naturally pleased with the core Practices division like-for-like sales performance in the financial year to date and with the trading performance of the group being slightly ahead of management’s expectations for the first four months.” Connell added.
The industry seems to be recovering from a slump, with FTSE250 (INDEXFTSE: MCX) listed retailer Pets at Home (LON: PETS) saw their shares rise after reports of a strong half period of trading.
Additionally, rival Premier Veterinary Group Plc (LON:PVG) announced a new Chief Financial Officer in a structural reshuffle.
