Highlights
• Two brokers have issued Buy ratings for CVS Group, setting target prices of AUD 41.21 and AUD 35.03, indicating potential upsides of 40.85% and 19.72%, respectively.
• CVS reported revenue growth of 5.4% year-on-year to £673.2 million for FY25.
• Adjusted EBITDA rose 9.4% to £134.6 million, with margins improving to 20.0%.
• Statutory profit increased significantly to £53.0 million

CVS Group (LSE:CVSG), a UK-listed veterinary services provider, has received Buy ratings from two brokers. One broker set a target price of AUD 41.21, representing a 40.85% upside from current levels, while another issued a target of AUD 35.03, implying a 19.72% potential increase.

The ratings might come following the company’s financial results for the year ended 30 June 2025 (FY25), with CVS reporting revenue and earnings growth.

FY25 Financial Performance

For FY25, CVS reported revenue from continuing operations of £673.2 million, up 5.4% from £638.7 million in FY24. The company’s like-for-like sales rose 0.2% overall, with its core Veterinary Practice division delivering a 1.0% increase. Although market conditions in the UK remained subdued, CVS experienced a notable improvement in sales momentum during the final quarter of the year.

Adjusted EBITDA grew 9.4% year-on-year to £134.6 million. The company’s EBITDA margin improved to 20.0%, within the medium-term guidance range of 19% to 23%.

Profit before tax from continuing operations declined 7.4% to £32.6 million, primarily due to higher finance and depreciation expenses linked to recent acquisitions and continued capital investment. However, statutory profit for the year rose to £53.0 million, compared to £6.4 million in FY24, largely driven by a £33.5 million gain from the disposal of the Crematoria business.

Balance Sheet and Cash Flow Improvement

CVS reported continued improvement in its financial position, with leverage falling to 1.18x from 1.54x in the prior year. The reduction was supported by operational cash generation and proceeds from the Crematoria divestment, partially offset by investments in acquisitions and existing practices.

The company also delivered a 6.8 percentage point improvement in adjusted operating cash conversion, reaching 76.9%, in line with its medium-term target of above 70%. This performance highlights CVS’s consistent cash discipline and its ability to convert earnings into cash flow.

The Board has proposed a final dividend of 8.5 pence per share, up from 8.0 pence last year, in line with its progressive dividend policy.