CVS shares fall as regulatory costs weigh on profits, sales growth slows

(Sharecast News) - Shares in CVS Group fell sharply on Thursday after the veterinary services provider reported a decline in statutory profits, as costs associated with the UK competition regulator's investigation weighed on the bottom line and like-for-like sales growth slowed in the second half.

Profit before tax slipped 1.8% to £32.0m in the year to 30 June, despite revenue rising 5.9% to £712.8m.

CVS booked £10.6m of exceptional costs, up from £6.0m a year earlier. That included £1.7m relating to the Competition and Markets Authority investigation into pricing and transparency concerns across the vet services sector, and £5.1m for implementing the regulator's remedies, including rebranding costs. A further £3.8m related to the company's move to the London Stock Exchange's Main Market.

Adjusted pre-tax profit, which strips out exceptional and other items, increased 7.6% to £84.9m, while adjusted EBITDA rose 5.1% to £141.5m.

Group like-for-like sales rose 2.1% over the full year, improving from just 0.2% in the year to June 2025, but growth slowed from 2.7% in the first half. CVS said weaker UK consumer confidence and extreme hot weather in May and June hit footfall and dampened growth in the final quarter.

The company said the new financial year had made a "solid start", with positive like-for-like sales growth, and maintained its medium-term target of 4% to 8% organic growth. It expects FY27 performance to align with market expectations, currently for adjusted EBITDA of around £150.4m and adjusted EPS of 94.9p.

CVS also proposed a final dividend of 9.0p per share, up from 8.5p, and said its £50m share buyback programme remained under way.

The stock was 6.0% lower at 1,224p by 1328 BST.

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