CVS Group FY26 trading update: Australia drives growth as leverage rises

CVS meets expectations despite a softer UK market

CVS Group has delivered full-year earnings broadly where analysts expected, with growth in Australia helping to offset a challenging economic backdrop in the UK.

For the year ended 30 June 2026, the veterinary services group expects to report unaudited revenue of £712.8 million, up 5.9% from £673.2 million in FY25.

Adjusted EBITDA is expected to be approximately £141.5 million, compared with £134.6 million last year. Adjusted EBITDA strips out items including interest, depreciation, amortisation, acquisition-related costs and exceptional charges, giving investors a view of underlying operating performance.

The result sits almost exactly on the company-compiled analyst consensus average of £141.6 million. The forecast range was £140.4 million to £142.3 million.

That means this update is largely about execution rather than surprise. CVS has met expectations, preserved its margin and expanded its Australian operation, although borrowings have risen materially.

CVS Group's key FY26 figures

Metric	FY26	FY25	Change or context
Revenue	£712.8 million	£673.2 million	Up 5.9%
Like-for-like sales growth	2.1%	0.2%	Improvement despite UK pressure
Adjusted EBITDA	Approximately £141.5 million	£134.6 million	In line with consensus
Adjusted EBITDA margin	19.9%	20.0%	Down 0.1 percentage points
Australian revenue	£79.1 million	£52.1 million	Up £27.0 million
Capital expenditure	£36.4 million	Not disclosed	Around 5.0% of revenue
Net bank borrowings	£199.6 million	£131.4 million	Higher following investment and capital returns
Leverage	Approximately 1.63x	1.18x	Below the stated 2.0x ceiling

All FY26 figures in the update are unaudited.

Like-for-like sales, which compare continuing operations while adjusting for factors including working days, rose 2.1%. That is a clear improvement from growth of 0.2% in FY25.

The EBITDA margin remained broadly stable at 19.9%, compared with 20.0% a year earlier. It also stayed within management's guidance range of 19% to 23%.

Maintaining the margin matters because growth driven by acquisitions is less impressive if profitability weakens sharply. Here, CVS has added revenue while keeping its underlying margin effectively flat.

Australia is becoming a meaningful earnings contributor

Australia provided the clearest growth story in the announcement.

Revenue from the country increased by £27.0 million to £79.1 million, benefiting from acquisitions completed during FY26 and the previous year, alongside like-for-like growth.

Australia now accounts for approximately 11% of group revenue and around 16% of group EBITDA before central costs. Its share of EBITDA being higher than its share of revenue suggests it is already making a meaningful contribution to group profitability.

CVS completed six Australian practice acquisitions covering 14 sites during the year and also bought out a minority interest. The aggregate initial consideration was A$91.0 million, or £45.6 million.

The group now operates 35 practices across 57 Australian sites. Management said these practices were collectively performing ahead of the group's business plans, partly because of buying synergies. Buying synergies arise when a larger group can secure better purchasing terms by combining its spending power.

CVS has also exchanged contracts to acquire two further practices in South Australia, covering four sites, for initial consideration of approximately A$9.3 million, or £4.6 million. Completion is expected in the coming weeks, and management described the wider acquisition pipeline as strong.

This progress supports the argument that Australia can become a second growth engine for CVS rather than simply a small overseas venture. The counterpoint is that acquisition-led expansion consumes cash and raises integration risk.

Borrowings and leverage require attention

Net bank borrowings rose to £199.6 million at 30 June 2026, from £160.2 million at the end of December 2025 and £131.4 million a year earlier.

Leverage is expected to be approximately 1.63 times EBITDA on the group's bank-test basis, compared with 1.41 times in December and 1.18 times at the end of FY25. In simple terms, leverage measures debt relative to earnings, with a higher number indicating a greater debt burden.

CVS remains below its stated leverage ceiling of 2.0 times, but the direction is clearly upwards.

The company is also undertaking a £50 million share buyback. It completed £11.7 million of that programme during FY26, with the remainder expected to run until November 2026. Management expects the programme to push leverage towards the 2.0 times ceiling.

CVS reported committed undrawn bank facilities of £132.0 million and cash of £18.4 million. It therefore believes it retains headroom for further acquisitions. Management may also consider temporarily moving leverage above 2.0 times for an attractive acquisition.

That flexibility could support value-enhancing deals, but investors will want discipline on purchase prices and integration. Higher leverage leaves less room for operational setbacks, particularly while UK trading remains subdued.

Capital spending should moderate

CVS invested £36.4 million in capital expenditure during FY26, equivalent to approximately 5.0% of revenue.

The group expects ongoing annual capital expenditure of around £30 million, meaning spending should fall as a percentage of revenue if the business continues to grow.

This is potentially supportive of free cash flow, which is the cash remaining after operating expenses and capital investment. Stronger free cash generation would give CVS more capacity to balance acquisitions, debt management and shareholder returns.

UK demand and the CMA remain important

Management said low UK consumer confidence continues to affect footfall at companion animal practices. This remains the main operational pressure highlighted in the update.

The Competition and Markets Authority published its final decision concerning the veterinary market on 24 March 2026. CVS said it already complies with many of the remedies and is well advanced on the remainder.

Price lists were published on practice websites in late 2025, while more than 80% of CVS's UK companion animal practices are jointly branded.

The conclusion of the CMA process removes a degree of uncertainty, but complying with the final remedies will remain an operational task. The update did not disclose the expected financial cost of full compliance.

CEO succession adds another item to monitor

Richard Fairman previously announced his intention to retire, and the board is searching for a successor. He will continue leading CVS until the new chief executive takes up the position.

No appointment timetable or successor was disclosed. Leadership transitions can create uncertainty, particularly when a business is pursuing acquisitions, managing higher leverage and operating across two geographic markets.

What investors should watch next

CVS expects to publish its preliminary FY26 results on 24 September 2026. Those figures should provide more detail on cash generation, acquisition returns and the financial effects of regulatory compliance.

For now, the positives are straightforward: revenue and EBITDA increased, earnings met consensus, margins held steady and the Australian operation is performing ahead of plan.

The main concerns are equally visible. UK consumer confidence remains weak, net borrowings have climbed to £199.6 million, leverage is moving towards the group's ceiling and the CEO succession process is unresolved.

Australia is doing more of the growth work, and CVS appears willing to keep investing behind that opportunity. The key test will be whether those acquisitions continue to outperform while the group completes its buyback and keeps debt within a sensible range.