CVS halts acquisitions in the UK amid competition watchdog probe
CVS has halted UK acquisitions and focused on Australian expansion due to a probe by the UK’s competition watchdog into the pet sector.
The vet group has also delayed its full-year results until October to allow shareholders to “have more visibility” and details of the Provisional Decision of the Competition and Markets Authority (CMA), which will be in September.
CVS, which has over 2,000 veterinary clinics, has said it would “proactively support” the CMA through the investigation.
The CMA probe is looking into concerns that pet owners aren’t getting value for money from vet services.
In its most recent published papers on the topic, the watchdog found that customers had a limited choice of services and said that the price of vet services has risen faster than inflation.
In February, the CMA said that while it was “aware that this is a sector which has undergone significant changes over the last 10 year [but] consumers face difficulties in making informed choices about the services they buy.”
“There appears to be limited information available to pet owners about price, options available, quality of services and (in some cases) ownership of vet businesses,” it said.
CVS: Full year revenue grows
Despite uncertainty over the watchdog’s decision, CVS reported full year revenue at £673.2m, year on year growth of 5.4 per cent.
But full year revenue growth and like-for-like sales were impacted by softer market conditions in the UK, the company said.
Like-for-like sales across CVS’s core Veterinary Practice division was just one per cent for the year.
Expansion in America continues, however, with 15 sites acquired in the year for £29.2m.
“With the group’s strengthened balance sheet and successful establishment of a meaningful Australia operation, the group is well placed to deliver further inorganic revenue and adjusted EBITDA growth.”
“Notwithstanding the ongoing economic uncertainty in the UK, CVS remains well positioned to deliver attractive growth in shareholder value over the medium and long term,” CVS said.