The boss of vet group CVS says the firm will keep acquiring smaller practices, despite the monopolies watchdog launching a review into the rapid pace of consolidation in the sector.
Earlier this month, the Competition and Markets Authority opened a review into the vet sector to learn whether the sudden rise of large corporate vet groups was driving higher prices. Independent practices made up 89% in the market in 2013 but this fell to 45% by 2021, and businesses like CVS have continued to buy smaller practices since.
But CEO Richard Fairman told the Standard CVS would keep buying smaller practices. It announced two more UK acquisitions today, both green-lit by the CMA, in what Fairman called “a very clear signal that we can continue” making purchases.
Though he added that it was “far too early to tell” what the overall outcome of the CMA review will be.
The group also has a £350 million war chest. Some of that cash will be used for more deals, though most will be spent improving existing facilities.
Fairman said the ability to spend on upgrading facilities and clinical research meant the rise of large vet groups means better care.
It comes as first-half profits leapt by 50% to £53.9 million, though 2022’s figures had been affected by writedown costs.
Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown, said: “Ways of life are changing to be more accommodating towards pets and the importance they hold in our lives, and a continued humanisation trend plays directly into the hands of vets, who are on hand for every overly concerned first-time dog owner.”
The shares are up 57p to 1,566p today, but still 25% below their price before the CMA launched its review.
