AUS
NZ
UK
CA
USA
IND
Highlights
- Sales Growth: Group sales up 6.6%, totaling £341.8m for H1 2025.
- Adjusted EBITDA: Increased by 4.5% to £67.4m, with an EBITDA margin of 19.7%.
- Expansion into Australia: Investment focus shifting to Australia, with no new UK acquisitions due to regulatory uncertainty.
CVS Group (LSE:CVSG), a UK-listed leader in veterinary services, has provided an update on its performance for the six months ending 31 December 2024 (H1 2025). Despite softer market conditions in the UK, particularly in the online retail and laboratory segments, the company has posted solid financial results, with plans for growth in the second half of the year.
Solid Financial Performance Amid UK Challenges
In H1 2025, CVS reported a 6.6% increase in group sales, reaching £341.8 million, compared to £320.5 million for the same period last year. Despite this growth, the company faced a 1.1% decline in like-for-like sales, primarily due to ongoing challenges in the UK market. This included weaker performance in CVS’s online retail and laboratory businesses, though the core Veterinary Practice division remained stable, and the company anticipates growth in this division during the second half of the year.
Adjusted EBITDA for H1 2025 rose 4.5%, totaling £67.4 million, with a margin of 19.7%, which is in line with the company's target margin.
Cost Pressures and Strategic Investments
The UK government’s budget changes announced in November 2024 will lead to higher employment costs, particularly from National Insurance and National Minimum Wage increases, which are set to take effect from April 2025. CVS estimates that these changes will add around £11 million in annual costs by the year ending 30 June 2026. In response, the company is targeting cost synergies and operational efficiencies, particularly in Australia, to mitigate these impacts.
Further investments in the business are continuing, with the company spending £16.8 million in H1 2025 on technology, clinical equipment, and practice refurbishments. CVS has also launched a new website for Animed Direct in January 2025, improving usability and speed. Additionally, the company is piloting several client engagement initiatives using its cloud-based systems.
Expansion Strategy and Employee Engagement
CVS is continuing its expansion into Australia, where the company is benefiting from a more stable regulatory environment. While there remains uncertainty in the UK, particularly due to the ongoing CMA Market Investigation, the company is remaining selective about new investments in the UK and has paused acquisitions in the country.
On the employee front, CVS has seen an improvement in employee engagement, as evidenced by an increase in its Net Promoter Score (NPS) from -2.8 in June 2024 to +3.8 in December 2024. This reflects growing employee satisfaction and the company’s focus on providing a positive work environment.
Outlook for the Second Half of 2025
The company remains cautious about the challenges in the UK but is confident that the fundamental demand for quality veterinary care will continue to drive growth. CVS is well-positioned for medium-term growth, particularly in the Australian market, and expects to deliver attractive shareholder value moving forward.
As CVS prepares for its H1 2025 interim results announcement on 27 February 2025.
