By Samuel Indyk
Investing.com – Veterinary services provider CVS Group (LON:CVSG) said underlying revenue rose 13.2% in the first half of the year as a pandemic-led pet boom helped sales.
Like-for-like revenues were up 11.4%, however, trading was impacted by staff absences due to the rapid spread of the Omicron COVID variant and the catch up of holiday postponed from the second half of last year.
Adjusted EBITDA rose 15.5% as the company’s margin increased 0.6 percentage points.
The company’s management said they were “pleased” with the performance in the first half of the year and considers current trading to be “comfortably in line” with full-year expectations.
The company has benefitted from increased pet ownership in the UK since the start of the pandemic.
According to the Pet Food Manufacturers’ Association (PFMA) annual survey, 3.2 million households in the UK acquired a pet since the start of the pandemic. The data showed there are now 34 million pets in the UK, including 12 million cats and 12 million dogs.
“Increased pet ownership is paying dividends for vet group CVS,” writes Hargreaves Lansdown Equity Analyst Sophie Lund-Yates.
“This type of service makes for long-term, recurring revenue, because it’s not just dogs that are for life, but the vet trips that go with it.
“The increased humanisation of our furry friends is also acting as a boost to the top line.”
The AIM-listed company said it recruited around 9% more vets on overage over the last 12 months, including a record number of new graduates. Nevertheless, the company is continuing to look for new recruits to meet demand and the vet vacancy rate was stable at circa 10%.
“Vets, more so than a lot of other industries, face a shortage of highly qualified personnel,” Lund-Yates added.
“Labour shortages aren’t a new headache for CVS Group, so to that end it’s a step in the right direction to see vacancy rates holding steady for the time being.”
At 09:35GMT, shares in CVS Group were relatively flat 1,862 pence per share.