CVS Group H1 Earnings Call Highlights

Key Points

• CVS delivered H1 revenue up 5.8% to £356.9m and adjusted EBITDA up 3.9% to £67.7m, with free cash flow rising 16.2% to £34.4m and leverage at 1.41x, while management said trading is broadly in line with market expectations.
• The group hit strategic milestones including a move from AIM to the London Main Market (Jan 29, 2026) and rollout of a new consumer brand, CVS Vets, and is engaging with the CMA process—management says it is comfortable overall but disagrees with some proposed remedies.
• Expansion in Australia remains a near-term focus: CVS has grown to 33 practices across 55 sites, with Australia now contributing about 10% of group revenue and 15% of EBITDA, and the company expects further acquisitions this year.

CVS Group LON: CVSG reported interim results showing growth in both revenue and adjusted EBITDA, while management highlighted ongoing inflationary pressures in the U.K., continued expansion in Australia, and preparations for potential regulatory remedies expected from the U.K. Competition and Markets Authority (CMA).

Interim performance and balance sheet

Chief Executive Officer Richard Fairman said the group delivered “further growth in both revenue and EBITDA” despite “weak consumer confidence in the U.K.” Revenue rose 5.8% year over year to £356.9 million, while like-for-like growth improved to 2.7%, which management said was achieved across all three divisions.

Adjusted EBITDA increased 3.9% to £67.7 million, with an EBITDA margin of 19%. Chief Financial Officer Robin Alfonso said inflationary cost pressures were a headwind, and in Q&A management noted that U.K. national insurance and national minimum wage increases impacted margins by roughly 1% to 1.5% in the first half. Even so, the company reiterated its medium-term guidance range of 19% to 23% EBITDA margin and said it remains confident margins can improve over time.

Adjusted operating cash conversion was 75% in the period, and leverage was 1.41x at the end of December. Fairman also cited a “disciplined approach to investment.”

Animed Direct: replatforming, pricing tests, and demand trends

Alfonso said CVS’s online retail business, Animed Direct, benefited from a replatforming completed last year, which drove an “uptick” in conversion rates and improved site visits. However, she said the first half was pressured by price elasticity testing that “was margin eroding” and did not deliver the hoped-for revenue uplift.

“We dropped the price, we didn’t see any increase in revenue. We just saw a loss [of] margin,” Alfonso said, adding that rebuilding online prices takes time. She also pointed to consumers trading down from premium pet food to cheaper alternatives amid the cost-of-living backdrop.

Management said it has now reversed those pricing moves and expects Animed Direct to be profitable in the second half, citing improving conversion rates and visits.

Australia expansion and competition oversight

CVS completed two veterinary practice acquisitions in Australia during the period and said it has completed a further two in the second half so far, taking the Australian platform to 33 practices across 55 sites. Fairman said the group continues to focus on acquiring practices in large urban areas.

On Australia’s evolving merger control environment, Fairman said CVS has already engaged with the Australian Competition and Consumer Commission (ACCC) and that, given the company’s current scale, local competition issues would be “quite unusual.” He described the new ACCC regime as an added process that is “not onerous,” with a voluntary element now that will become mandatory for companies above certain thresholds. He also noted that reviews may become more public under the updated approach.

Asked about Australian profitability, management reiterated that the practices CVS is acquiring in Australia tend to have higher margins than in the U.K. Fairman referenced prior commentary that Australia can deliver 25% or more EBITDA margins at the practice level, while noting that centralized support costs sit above that when comparing to group-level margins.

Management described early cost synergies in Australia, including the selection of a preferred wholesaler across practices and preferred laboratory and crematory providers, along with a more standardized approach to drug choices intended to support supplier negotiations over time. Fairman said these cost synergies are “starting to be delivered” but “not that significant at the moment,” with expectations they will grow.

U.K. demand mix and like-for-like drivers

Management said demand patterns in the U.K. remain mixed. Fairman said referral hospitals have performed well and that demand for “high-end care” and reactive treatment for illness or injury has stayed strong, supporting growth in the laboratory business. In contrast, he said routine and preventative care has been softer, as some pet owners delay appointments due to cost-of-living concerns.

In response to a question on pricing and volumes, Fairman said that within U.K. companion animal practices, like-for-like growth is “largely coming from price,” while volumes were described as flat to slightly negative. He added that group like-for-like performance also reflected stronger contributions from Australia, improvement at Animed Direct and laboratories, and strong referral performance.

On the laboratory division, Fairman said roughly half of lab customers are external (often smaller independent practices) and that growth in the half year came from both internal and third-party sales. He characterized lab growth as “volume driven,” with only modest price rises, and said CVS is winning additional third-party business. He also referenced that the prior-year comparison included the final impact from losing the Linnaeus contract after Mars internalized lab work following acquisitions.

CMA process, transparency measures, and rebranding costs

Fairman said the company welcomed Defra’s consultation on reforming the Veterinary Surgeons Act 1966 and is awaiting the CMA’s final decision in the “coming weeks.” Management outlined the CMA’s timeline and CVS’s preparations for potential remedies.

Fairman said the CMA issued its provisional decision in October, narrowing remedies under consideration to 21 remedies plus a recommendation for government to consider reform of the Veterinary Surgeons Act. He said CVS is already compliant with a number of measures, including complaints visibility and compliance with the Royal College of Veterinary Surgeons’ Practice Standards Scheme.

Key implementation steps cited by management included:

• Joint branding: CVS has rebranded about 60 U.K. sites so far and plans to joint-brand all U.K. companion animal practices by the end of June, pairing “CVS Vets” with local practice names.
• Published price lists: The company published price lists on practice websites late last year and said it is working to automate the process and prepare to feed pricing into the RCVS “Find a Vet” platform.

Alfonso estimated the signage-related cost to rebrand all sites at roughly £6 million, which she said would be treated as an exceptional cost because CVS would not otherwise have rebranded due to the CMA process. Management said it does not expect significant ongoing operating costs from compliance, though Fairman noted potential longer-term regulatory impacts from any reform of the Veterinary Surgeons Act.

On pricing transparency, Fairman said CVS has not yet published the full range of prices discussed by the CMA, arguing that the proposed matrix could be too complex for clients. He said the CMA’s preliminary proposals could amount to more than 200 price points once broken down by weight category and species, and that the company has given feedback that this level of complexity may not be helpful. However, management said it would be able to expand disclosures if required once the final decision is known.

Fairman also said CVS has not seen negative client impact from having prices live, nor increased switching between practices. Management emphasized that clients want fair and transparent pricing alongside a clear demonstration of value.

Looking ahead, Fairman said the company sees “pent-up demand” from potential sellers in the U.K. after a quieter market, but CVS is not rushing back into acquisitions at historical multiples, especially given what it views as more attractive acquisition multiples in Australia. He said U.K. acquisitions are “back on the table” and could occur later in the calendar year, but only for high-quality practices and at financially sensible prices.

About CVS Group LON: CVSG

CVS Group is an AIM-listed provider of veterinary services with operations in the UK and Australia. CVS is focused on providing high-quality clinical services to its clients and their animals, with outstanding and dedicated clinical teams and support colleagues at the core of its strategy. The Group now operates c.470 veterinary practices across its two territories, including specialist referral hospitals and dedicated out-of-hours sites. Alongside the core Veterinary Practices division, CVS operates Laboratories (providing diagnostic services to CVS and third-parties) and an online retail business ("Animed Direct"). The Group employs c.8,900 personnel, including c.2,400 veterinary surgeons and c.3,300 nurses.

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