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Investing.com -- CVS Group stock gained 4% after the veterinary services provider reported meeting profit expectations for fiscal year 2025 despite revenue coming in slightly below analyst forecasts.
The company reported revenue of £673 million for the year ended June 30, representing 5.4% growth year-over-year in continuing operations. However, this figure fell 1% short of Factset consensus estimates of £682 million. Like-for-like growth was modest at just 0.2% overall and 1.0% in its practice division, with the company citing softer UK market conditions as a factor.
Despite the revenue shortfall, CVS Group expects adjusted EBITDA to reach approximately £134 million, translating to a margin of around 20%, which aligns with analyst expectations. The company noted some improvement in market conditions during the final quarter of the fiscal year.
CVS Group has been actively expanding in Australia, completing 15 practice acquisitions during the fiscal year for a total consideration of approximately £29.2 million. Since entering the Australian market in July 2023, the company has acquired 30 practices across 45 sites. Meanwhile, its UK acquisition activity remains on hold pending the outcome of a Competition and Markets Authority (CMA) investigation, though the company expressed confidence in "accretive UK acquisition opportunities in due course."
The company’s balance sheet showed net bank borrowings of £131 million at year-end, benefiting from £42 million in proceeds from the disposal of its Crematoria business. Leverage is expected to be approximately 1.2x, down from 1.7x in December 2024 and within the company’s target of less than 2x.
While CVS Group did not provide specific guidance for fiscal year 2026, it stated it is "well placed to deliver further inorganic revenue and adjusted EBITDA growth." The company reaffirmed its mid-term margin guidance range of 19-23%.
Due to the CMA’s delay in its preliminary decision to September, CVS Group will report full fiscal year results on October 7.
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