Veterinary group CVS announced 10 per cent revenue growth but weaker sales amid soft demand and the effect of a cyber security attack, while it separately announced a shift in strategy to focus on growth in Australia.
Like-for-like sales only increased by 2.9 per cent year on year at the London-listed company, after a rise of 7.3 per cent in 2023.
Cost-of-living pressures and the negative publicity from a Competition and Markets Authority investigation into the vet market both pulled sales down, the company said.
The CMA began an investigation in May into transparency, competition and profits within the veterinary sector. It will also look at the regulatory framework of the market.
CVS expected their earnings before interest, tax, depreciation and amortization to reach £127m, which is at the lower end of their guidance.
“The Group is facing short-term headwinds with the recent cyber incident and modernisation, softening demand and the ongoing process with the CMA. The fundamentals of the sector remain very strong with an increased population of pets, pet life expectancy increasing and continued advancements in the provision of clinical care,” the company said.
A cyber incident on 8 April this year cost CVS £4m to £5m in exceptional costs from professional fees, one-off costs and migration to a new cloud-based system.
The group estimated that the incident impacted revenue by £7m in the final quarter.
Further expansion to Australia will be a core part of the group’s strategy next year, “building on its existing platform to drive long-term sustainable growth”, it said.
It has acquired ten practices in Australia so far this year, bringing its total acquisitions to 23.
CVS has “established a significant platform in Australia” and has expanded its local management team to support the strategy.
The chain of vet practices has disposed of its operations in the Netherlands and the Republic of Ireland, “given their sub-scale nature” and “particular challenges” in these markets. Both operations were loss-making.