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CVS Group sees earnings ahead of expectations

Stock MarketsJul 20, 2021 10:56
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By Samuel Indyk

Investing.com – Shares in veterinary service provider CVS Group (LON:CVSG) were trading higher on Tuesday following a trading update. The company said like-for-lake sales increased 17.4% in the full year, accelerating in the final quarter given that the comparative quarter last year was impacted by Covid-19 restrictions.

The company now expects to report adjusted EBITDA for FY21 marginally ahead of market expectations as upgraded following a trading update in April.

“While there was some disruption to service because of restrictions, on the whole CVS Group’s vet clinics fared much better than other businesses,” writes Hargreaves Lansdown (LON:HRGV) Senior Equity Analyst Sophie Lund-Yates in an emailed note.

“As restrictions have allowed clinics to offer a wider range of treatments once more, business has boomed, allowing full year profit expectations to be upgraded yet again.”

Outlook

The veterinary practice said it is also well placed to pursue further targeted acquisitions and plans to improve its level of clinical care through investment in people and specialist facilities.

There can be no doubt the CVS has benefitted from an increase in pet ownership among UK households since the pandemic began.

“CVS Group is also likely being buoyed by the phenomenal rise in pet ownership brought about during lockdowns, which should act as a long-term boon,” Lund-Yates said.

“CVS Group’s revenues are particularly attractive, because once a pet owner registers an animal with a clinic, they’re very likely to be a repeat customer over its lifetime.

“Recurring revenues are somewhat of a luxury in the world of business, adding a layer of certainty others could only hope for.”

At 10:45BST, shares in CVS Group were trading flat at 2,260 pence per share.

CVS Group sees earnings ahead of expectations
 

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