In a trading update for the four months to October 31, the AIM-listed firm reported that total sales had grown 6.3% year-on-year, or 5.1% growth on a like-for-like basis, while its earnings (EBITDA) margin expanded to 18.7% from 18.2%.
CVS also said “continued strong cash generation” during the year had led to a reduction in net debt to £40.9mln from £62.1mln at the end of June, adding that it has also completed three acquisition so far this year while keeping all of its vet practices open despite current lockdown measures in the UK.
Looking ahead, the company said the veterinary services market is continuing to benefit from “favourable consumer trends” and increasing pet ownership, which in turn is providing “a number of resilient revenue streams despite the continued macro uncertainty”.
In a note, analysts at Peel Hunt increased their target price for CVS to 1,480p from 1,350p and retained their ‘buy’ rating, saying the business was “well placed to benefit from the increase in demand for pet ownership combined with greater propensity to care for pets”.
CVS shares rose 8.6% to 1,472p in early trading.