CVS Group reveals growth strategy after £350m refinancing

A large veterinary group has launched a £50 million share repurchase programme alongside a major refinancing effort as it pursues new growth.

CVS announced the launch of the share buyback programme (SBB) after successfully refinancing its £350 million bank debt facilities on improved terms on Tuesday (26 May).

The facilities, which were repayable in February 2028, are now repayable in May 2030, comprised of a £125 million term loan, a £225 million revolving credit facility and an existing overdraft facility of £5 million that is renewable annually.

Following the announcement, CVS’ share prices rose by 6.84% in early trading.

Advised

Earlier this month, the group was advised to launch a £100 million SBB in a response to a “persistent and substantial undervaluation” of its shares.

CVS said that amid its refinancing it “has significant headroom… to continue to invest for growth” and revealed its capital allocation priorities include acquisitions to “accelerate sustainable growth”.

It said it is currently focused on expanding in Australia and expects to deploy around £50 million there annually.

Sydney expansion

The group announced the acquisition of a single-site first opinion companion animal practice in Sydney for AUS$8.2 million (£4 million) and that it expects to complete acquisition of another practice for AUS$3.2 million (£1.7 million) in the coming weeks.

It also plans to invest around £30 million annually on improving its clinical facilities and equipment, enhancing client experience and loyalty through new technology and improving employee engagement and retention to maximise organic growth.

The group will issue its full year trading update on 23 July.

CEO search

CVS also said it was “making progress, although at early stages” in identifying a successor to chief executive Richard Fairman, following his March announcement of his intention to retire.

Mr Fairman said: “We are pleased to have refinanced our bank facilities through to May 2030 on improved terms.

“This provides additional flexibility and firepower to launch a meaningful share buyback programme, alongside disciplined capital allocation in enhancing our estate and quality of service to our customers and investing in our attractive pipeline of accretive acquisitions.

“We look forward to updating investors at the time of our full year trading update on how this approach underpins the delivery of shareholder returns.”