CVS UK deals on hold’ until CMA verdict due to sector ‘uncertainty’

A major veterinary group says it has halted plans for further UK practice acquisitions because of “uncertainty” linked to an ongoing review of the sector.

CVS Group bosses said they are focusing on expansion opportunities in Australia as its half-year financial results were published.

But a business analyst has expressed confidence that the current Competition and Markets Authority (CMA) investigation will have only a “minimal” effect on the organisation.

Although CVS was one of several major groups which had acquisition deals investigated by the CMA prior to the launch of the current review in 2023, the group has consistently stressed its support for the regulator’s work.

Impacted operations

However, documents released alongside the company’s interim results on 27 February showed the process has impacted its operations.

The papers said: “In light of the uncertainty in the UK due to the ongoing CMA market investigation, the group has reprioritised investment activity into Australia, where there is a more stable and supportive regulatory environment around the sector.

“Until the conclusion of the CMA market investigation process in November 2025 and pending the decisions to be reached in that process, the group has determined UK investment can only be undertaken on an exceptionally disciplined basis, with respect to facilities, equipment and IT with no UK acquisitions.”

Officials subsequently said the halt to UK practice deals had been in place throughout the market investigation and declined to say whether any individual agreements had been halted by the process.

Further acquisitions

But they also stressed the company expected to make further acquisitions once there is “more certainty” about the UK’s regulatory structure.

In contrast, the papers said the group has invested more than £100 million since mid-2023 in Australian expansion, where it now runs 27 practices with a total of 36 sites.

Five new practice acquisition deals have so far been agreed in Australia during the first half of the financial year, while contracts for six others have also been completed in recent days, and bosses said they were “very confident” of completing further deals in the rest of the year.

Pre-tax profits

The company recorded adjusted pre-tax profits of £39.2 million in the six months to 31 December, down from £45.3 million in the first half of the previous year.

But its earnings before interest, tax, depreciation and amortisation were up 4.5% to £67.4 million, while overall revenues were up 6.6% to almost £342 million.

Although veterinary performance was described as “flat”, the company said it remained confident of “delivering full year results in line with market expectations”.

Optimistic message

The optimistic message was also echoed in analysis from Panmure Liberum, released to coincide with the publication of the results.

The paper said there were no “fireworks” in the group’s results, but argued that was a positive because of the “holding pattern” the company is in until the outcome of the CMA process is known.

It added: “We remain of the view that ‘sunlight remedies’ are the most likely outcome from the CMA investigation and, if this is the case, then we would expect impact on CVS to be minimal.”