CVS Group final results 2026: earnings rise as buybacks and acquisitions continue

CVS Group plc has delivered a solid set of annual results, combining higher revenue and adjusted earnings with a larger dividend, continued share buybacks and further expansion in Australia.

The veterinary services group also confirmed that trading in the new financial year had started positively. Management expects the business to perform in line with market expectations for FY27.

There is plenty here for investors to like. However, the gap between adjusted and statutory profits, rising borrowings and the ongoing search for a new chief executive all deserve attention.

CVS Group's key figures

Metric	FY26	FY25	Change
Revenue	£712.8 million	£673.2 million	5.9%
Like-for-like sales growth	2.1%	0.2%	1.9 percentage points
Adjusted EBITDA	£141.5 million	£134.6 million	5.1%
Adjusted EBITDA margin	19.9%	20.0%	-0.1 percentage points
Adjusted profit before tax	£84.9 million	£78.9 million	7.6%
Adjusted earnings per share	85.6p	80.1p	6.9%
Statutory profit before tax	£32.0 million	£32.6 million	-1.8%
Free cash flow	£69.2 million	£72.2 million	-4.2%
Net bank borrowings	£199.6 million	£131.4 million	51.9%
Final dividend	9.0p	8.5p	5.9%

Like-for-like sales measure growth from established operations, excluding the immediate impact of acquisitions and adjusting for working days and currency movements.

Revenue rose 5.9% to £712.8 million, supported by acquisitions and an improvement in like-for-like growth to 2.1%. That is progress from just 0.2% last year, although it remains below CVS's medium-term target range of 4% to 8%.

Management said weaker UK consumer confidence and extreme hot weather in May and June affected customer visits. Even so, the group held its adjusted EBITDA margin broadly steady at 19.9% despite wage inflation, higher employer National Insurance contributions and increased IT spending.

Adjusted EBITDA means earnings before interest, tax, depreciation and amortisation, with further adjustments for acquisition and exceptional costs. It is intended to show underlying trading performance, but investors should also examine the statutory figures.

Adjusted growth masks weaker statutory profit

Adjusted earnings per share increased 6.9% to 85.6p, helped by stronger adjusted profit and a lower average share count following buybacks.

Statutory profit before tax, however, slipped 1.8% to £32.0 million. Operating profit fell 4.4% to £47.6 million.

The difference reflects higher depreciation and amortisation following acquisitions and capital investment, £14.8 million of business combination costs and £10.6 million of exceptional items. Exceptional costs included £5.1 million relating to Competition and Markets Authority remedies and £3.8 million for the move from AIM to the London Stock Exchange's Main Market.

Basic earnings per share fell sharply from 73.7p to 24.4p, but that comparison is distorted by the £33.9 million profit from the disposal of the Crematoria operations in FY25. On a continuing-operations basis, last year's basic earnings per share was 26.3p, meaning the underlying statutory decline was 7.2% rather than 66.9%.

That distinction matters. The adjusted numbers show a growing operating business, while the statutory figures highlight the substantial accounting and transaction costs attached to CVS's acquisition-led strategy.

Australia is becoming more important

Australian revenue increased from £52.1 million to £79.1 million and now represents around 11% of group revenue, compared with 7% last year.

CVS acquired six Australian practices covering 14 sites during the year for combined initial consideration of £43.3 million. It ended June with 57 Australian practice sites, up from 43.

The expansion has continued into FY27. CVS has completed two Australian acquisitions comprising three practice sites for £4.9 million and exchanged contracts on two more acquisitions for combined initial consideration of £4.0 million.

UK acquisition activity is also returning following the conclusion of the CMA's veterinary market investigation. CVS has exchanged contracts to acquire a two-site UK practice employing nine full-time-equivalent vets for initial consideration of £15.0 million.

Management described this transaction as accretive, meaning it is expected to increase earnings rather than dilute them. The group has also identified further acquisition opportunities in both countries.

Cash generation remains useful, but debt has risen

Operating cash conversion was 70.6%, down from 76.9% but still above CVS's target of 70%. Free cash flow decreased from £72.2 million to £69.2 million, mainly because of negative working capital movements.

Net bank borrowings rose by £68.2 million to £199.6 million. This funded acquisitions, investment in technology and clinical facilities, share buybacks and other financing costs.

Leverage increased from 1.18 times to 1.63 times adjusted bank-test EBITDA. That remains below management's normal ceiling of 2.0 times, although CVS has said it could temporarily move above that level if attractive acquisitions emerge and there is a clear route back below it.

The group refinanced its £350.0 million loan facilities on improved terms, extending their maturity to May 2030 with an option for a further one-year extension. This provides additional flexibility, but investors should watch whether future acquisition spending pushes borrowings materially higher.

Dividend and buybacks increase shareholder returns

The board has recommended a final dividend of 9.0p per share, up from 8.5p. Subject to shareholder approval, it will be paid on 4 December 2026.

CVS completed a £20.0 million share buyback in January and launched a further £50.0 million programme in May. Some £11.7 million of the second programme had been completed by 30 June, with the full programme expected to conclude over the coming months.

Together, these programmes are expected to return £70.0 million to shareholders over just more than 12 months. Buybacks reduce the number of shares in circulation and can increase earnings per share, although their effectiveness depends on the price paid.

CMA clarity helps, but CEO succession remains unresolved

The CMA published its final remedies order on 22 September 2026. CVS said the measures were in line with expectations, with most recommendations already implemented or in progress.

The removal of this regulatory uncertainty is significant because management can focus more fully on operations and UK acquisitions. CVS has published prices on practice websites and has largely completed the joint branding of its UK companion animal practices.

Leadership succession remains a separate uncertainty. Richard Fairman announced his intention to retire after almost seven years as chief executive, but will remain in place until a successor joins. The board said its search is progressing well, although an appointment and timetable were not disclosed.

What investors should watch in FY27

CVS said the new year had started solidly, with positive like-for-like sales growth. It expects to perform in line with company-compiled market expectations for FY27.

Those expectations cover adjusted EBITDA of £149.0 million to £151.7 million, with an average of £150.4 million, and adjusted earnings per share of 89.3p to 99.6p, averaging 94.9p.

The main test will be whether CVS can move like-for-like growth closer to its 4% to 8% medium-term target while maintaining margins and integrating new acquisitions. Investors should also monitor debt, cash conversion, the size of adjustments to statutory profit and the eventual CEO appointment.

The direction of travel is encouraging: revenue and adjusted earnings are growing, Australia is gaining scale, regulatory uncertainty has reduced and shareholder returns have increased. The more cautious reading is that statutory profit remains under pressure and the growth strategy is becoming more capital-intensive.

The full figures and accompanying notes are available in the original company announcement.