Chief Executive Officer, CVS Group
CVS Group (CVSG) 2022 interim results overview March 2022
CVS Group, CEO, Richard Fairman summarises the interim results for the period ended 31 December 2021.
00:00 Start
00:19 Introduction
00:30 Purpose, vision & strategy
01:51 H1 2022 highlights
02:37 The integrated model delivering high standards of care
03:30 The growing market
04:11 Current trading and outlook
CVS Group plc (CVS) is a veterinary services provider. The Company operates in the four business segments, namely Veterinary Practices, Laboratories, Crematoria and Online Retail Business. It offers an integrated model with approximately 500 veterinary practices across its three territo...
About Richard Fairman
In March 2022, Richard Fairman reported the interim results for CVS Group for the period ending 31 December 2021. He stated that total sales increased by 11.4% to £273.7 million, with like-for-like sales up 11.3% and adjusted EBITDA rising 15.5% to £52 million. Fairman said the company had continued its positive momentum into the first two months of the second half. He noted that the group remained focused on its four strategic pillars of clinical care, being a great place to work, having the best facilities and equipment, and taking responsibilities seriously. Fairman also said CVS aimed to grow through improving existing operations, recruitment and retention, increased investment in facilities, selective acquisitions, and greenfield sites. Fairman described the market dynamics as positive, citing an increase in the companion animal population due to the pandemic, though he said the full benefit was not expected for five to ten years. He added that the humanization of pets trend continued and that consumers wanted the best possible care for their animals. He also said the group was "naturally disappointed" with the Competition and Markets Authority's decision regarding an acquisition, but that the company had taken a pragmatic approach and the decision was helpful for assessing future acquisition opportunities.
Transcript (4 segments)
R
Richard Fairman0:21
I'm Richard Fairman, Chief Executive of CVS, and I'm delighted to report our interim results for the first half of our financial year. As an AIM creator company, we have set out a clear strategy for growth. At the heart of this is our purpose to provide the best possible care for animals, and our vision to be the veterinary company people most want to work for. In support of this purpose and vision, we have four clear strategic pillars: recommending and providing the best possible clinical care, being a great place to work and to have a career, ensuring we have the best facilities and clinical equipment, and taking our responsibilities seriously to our colleagues, to the wider profession, to our shareholders, and to all stakeholders in CVS. We are focused on driving organic growth in CVS through improving our existing operations, and through using our integrated model to provide the best possible joined-up care to our clients and their animals, and on improving the recruitment and retention of our clinicians. This is supported by increased investment in our practice facilities and in our clinical equipment. We strongly believe that this is essential in our ability to provide great care, and to being able to attract, retain, and develop the best talent. We also recognize the opportunity to make further selective acquisitions, and to invest in greenfield sites where client demand is currently underserved.
I'm pleased to report that this strategic approach is delivering growth. In the first half, we saw total sales increased by 11.4% versus the corresponding half year, with total revenue of £273.7 million. On an underlying basis, like-for-like sales increased by 11.3%. Adjusted EBITDA increased by 15.5% to £52 million, and we saw our adjusted EBITDA margin increased to 19%. Through our focus on recruitment and retention, we've seen the number of vets we employ increased by circa 9%, and our vacancy rate remains stable. We want to recruit more vets to support with growth opportunities. Our integrated model is important in our ability to provide joined-up end-to-end care. Clients access our services through our first opinion practices, and we provide both reactive care and preventative care through our Healthy Pet Club and Healthy Horse programs. Identifying issues and treating them early leads to better clinical outcomes and less invasive treatments required. In due course, where the circumstances require, we have dedicated out-of-hours centers, our laboratory support through the provision of diagnostic tests, and our referral specialists are on hand to provide advanced care where required. Our crematorium provides an important clinical waste disposal service and a compassionate cremation service at the end of life. Our clients therefore benefit from this joined-up care.
The market dynamics continue to be positive. The benefits of companion animals have been widely recognized over the past two years, and that has led to an increase in the population. We have not yet seen the full benefit of increased numbers of puppies and kittens born over the past two years. Pets require more clinical intervention as they age, and hence we expect to see the full benefit in five to ten years' time. The trend of humanization of pets continues, and consumers want the best possible care for their animals. Our focus is on providing high quality, evidence-based clinical care, and I am confident this positions CVS well to deliver further growth in due course. I'm also pleased to report that the positive performance seen in the first half has continued into January and February. For the first eight months, we've seen sales increased by 11.5%, with like-for-like growth on an underlying basis of 11.4%. Adjusted EBITDA margin remains strong at 18.6%, and this includes a shorter month of February. And we've grown our Healthy Pet Club to 466,000 members. Our vacancy rate remains stable, and our leverage remains comfortably below one times adjusted EBITDA. We remain confident in our future growth opportunities with increased investment being made in support.
So to summarize, we have a very clear strategy to deliver future growth through our focus on our people and on providing the best possible clinical care. We have developed a strong set of results for the half year, and this momentum has continued in the first two months of the second half. We are increasing investment in support of a number of growth opportunities, and we have the ability to make further acquisitions. We are confident in our ability to drive further growth in the months and years ahead.