TIDMPVG
RNS Number : 9616E
Premier Veterinary Group PLC
24 October 2018
Premier Veterinary Group PLC
("PVG PLC", the "Company" or the "Group")
Trading Update
London, UK, 24 October 2018 - Premier Veterinary Group PLC (LSE:
PVG) provides a pre-close trading update.
Trading update for the year ended 30 September 2018
Group turnover for the year ending 30 September 2018 is expected
to be approximately GBP3.15m representing growth of 24% on the
previous year. Unaudited Earnings before Interest, Tax,
Depreciation and Amortisation ("EBITDA") for the year is expected
to be a loss of GBP3.25m.
Growth in Pets on plan
The Group's recurring revenue streams are driven by the number
of pets that are signed up to Premier Pet Care Plan ("PPCP"), a
preventative healthcare programme for pets. The number of revenue
generating pets on active plans for the final quarter of its 2018
financial year, and in the preceding four quarters was as
follows:
000's As at As at As at As at As at
Sep-17 Dec-17 Mar-18 Jun-18 Sep-18
United Kingdom 156 164 171 181 193
Europe 28 32 35 38 42
US 4 5 6 7 9
------- ------- ------- ------- -------
Total no. of fee generating
pets on plan 188 201 212 226 244
The number of revenue generating pets on plan at the end of
September 2018 has increased by 30% in the last 12 months to
244,000 (30 September 2017: 188,000).
UK
In the UK, the number of pets on plan has increased by 24% to
193,000 as at 30 September 2018 (30 September 2017: 156,000).
The increase in revenues from veterinary clinics driven by the
continued growth in pets on plan was partially offset by a
reduction in revenues from other third parties. Overall revenue for
the full year ended 30 September 2018 is expected to be
approximately GBP2m, at the lower end of management's
expectations.
Europe
The number of pets on plan in Europe has increased by 50% to
42,000 (30 September 2018: 28,000).
The Group's most significant territory in Europe is the
Netherlands which, as anticipated, has started to become cash
generative during the latter part of the financial year. The number
of pets on plan has grown by 38% to 33,000 as at 30 September 2018
(30 September 2017: 24,000). The Group is contracted with over 250
clinics, representing approximately 25% of the clinics in the Dutch
market. In the last 12 months, there have been increased levels of
clinic acquisitions by corporate veterinary groups. This presents
both opportunities and threats for the Group's operation but as a
consequence some reduction in future rates of growth are expected
in the future.
In France, at 30 September 2018, there were 7,000 pets on plan
(30 September 2017: 1,000). The business now has 183 clinics
contracted with 117 currently launched. The pipeline of clinics to
launch and the strong pipeline of new sales opportunities provides
encouraging signs for continued growth in this region.
Overall the performance of the European business for the current
financial year is in line with management's expectations, with
revenue of approximately GBP0.8m. However, the pressures on growth
in the Netherlands are expected to slow overall growth in Europe in
the future.
US
The number of pets on plan increased to 9,000 as at 30 September
2018 (30 September 2017: 4,000). 158 clinics have currently
launched PPCP and a further 98 clinics are awaiting implementation.
This excludes any of the clinics referred to in the contract
referred to below.
On 15 August 2018, PVG announced that it had signed a contract
with a major corporate veterinary consolidator in the US ("the
Customer").
The Customer has over 140 hospitals across 25 States with in
excess of 700 Full Time Vet Equivalents ("FTVE"). Of these
hospitals in excess of 100 are companion animal, the target market
for PVG, with an FTVE compliment of over 500.
This contract ("the US contract"), initially, is to introduce
PVA's preventative healthcare programme for pets, branded "Premier
Pet Care Plan" ("PPCP"), to 15 of the Customer's companion animal
hospitals. At the end of the pilot phase, which is expected to last
between three and six months, the contract can be extended to a 3
year term with a full roll out to all of the Customer's companion
animal hospitals.
The pilot clinics are being launched and of those that have been
launched, the initial sign up rates achieved are significantly
higher than those seen in independent clinics. Whilst the volume of
data is too small at this stage to be conclusive the signs are
encouraging and PVG is fully focussed on achieving a successful
pilot and moving to full roll out.
The performance of the US business for the financial year ended
September 2018 is below management's expectations, with revenue of
approximately GBP0.4m. However, upon completion of a successful
pilot, the above mentioned contract will be pivotal in driving the
US business of PVG towards profitability.
Pipeline
PVG is in advanced discussions to finalise an agreement (the
"Agreement") with a leading UK corporate group to provide
collection, administration and support services to facilitate the
provision of animal health plans across all of that group's
outlets. The contract would provide annual revenues of
approximately GBP1 million based on the current number of pets on
plan, once fully implemented. The Agreement, if finalised, is
expected to be implemented in the second half of the current
financial year, so that the full benefit will not be realised until
the financial year ending 30 September 2020.
Financing
As at 30 September 2018, the Group held cash balances of
approximately GBP0.7m and has drawn down GBP1m of its GBP2.25m
unsecured loan note facility with Bybrook Finance Solutions Limited
("BFSL"). A further GBP0.5m is scheduled to be received on 1
November 2018. Rajan Uppal, a director of PVG, is the sole
shareholder and director of BFSL.
PVG requires additional funding to support the directors' going
concern assessment, maximise the growth opportunities referred to
above and to reach overall profitability. PVG has received outline
terms from BFSL for a long term secured loan facility with an
increased level of funding and earlier drawdown dates to replace
the existing facility. Crossroads Finance Limited, a company
jointly owned and controlled by Dominic Tonner, Chief Executive
Officer of PVG, and his spouse, is expected to partake in the PVG
funding by entering into direct arrangements with BFSL. The
independent directors of PVG, being Graham Dick, Neil Wood and Will
Evans, are discussing those terms with BFSL whilst the full Board
are ascertaining what alternative funding arrangements may also be
available. The directors are confident of being able to raise the
additional finance required.
Outlook
Excluding the Agreement and the US contract, the outlook for
further growth for the Group remains positive albeit at a slower
rate than expected.
The successful signing and implementation of the Agreement would
provide a significant increase in the number of pets on plan and,
taken together with the roll out in the US for the Customer
referred to above would underpin PVG's existing growth expectations
for 2019 and beyond. It should be noted there is no guarantee that
PVG will finalise an agreement or that the US pilot and any
subsequent US rollout will be successful. The Board will provide an
update in due course.
For further information, please contact:
Premier Veterinary Group plc Tel: +44 (0)117 970 4130
Dominic Tonner, Chief Executive
Officer
Will Evans, Chief Financial
Officer
The information contained within this announcement is deemed by
the Company to constitute inside information stipulated under the
Market Abuse Regulation (EU) No. 596/2014. Upon the publication of
this announcement via the Regulatory Information Service, this
inside information is now considered to be in the public
domain.
Note to Editors:
PVG's services to third party veterinary practices, through its
wholly-owned subsidiary, Premier Vet Alliance Limited ("PVA"),
include the administration and support of a preventative healthcare
programme for pets branded "Premier Pet Care Plan" ("PPCP"). In the
US, PPCP is marketed through the Company's wholly-owned subsidiary,
Premier Vet Alliance (US) Limited.
PPCP is a structured, preventative healthcare programme for
cats, dogs and rabbits and is available only through veterinary
practices. The programme is seen as a way of providing gold
standard care for pets at an affordable price for the client, by
way of fixed monthly payments.
PPCP uses a clinical approach to prevention, as this is the most
effective method of ensuring illnesses are diagnosed more quickly
and not given a chance to advance. What truly sets PPCP apart is
its unique approach of offering an end-to-end solution and support
to the practice, which has been proven to work extremely well. PVA
works alongside practices to create a tailor-made, cost-effective
service for clients, one that delivers excellent care to their
patients and significantly improves practice performance.
For further details: http://www.premiervetalliance.co.uk/
This announcement includes "forward-looking statements" which
include all statements other than statements of historical facts,
including, without limitation, those regarding the Company's
financial position, business strategy, plans and objectives of
management for future operations, and any statements preceded by,
followed by or that include forward-looking terminology such as the
words "targets", "believes", "estimates", "expects", "aims",
"intends", "will", "can", "may", "anticipates", "would", "should",
"could" or similar expressions or the negative thereof. Such
forward-looking statements involve known and unknown risks,
uncertainties and other important factors beyond the Company's
control that could cause the actual results, performance or
achievements of the Company to be materially different from future
results, performance or achievements expressed or implied by such
forward-looking statements. Such forward-looking statements are
based on numerous assumptions regarding the Company's present and
future business strategies and the environment in which the Company
will operate in the future. These forward-looking statements speak
only as at the date of this announcement. The Company expressly
disclaims any obligation or undertaking to disseminate any updates
or revisions to any forward-looking statements contained in this
announcement to reflect any change in the Company's expectations
with regard thereto or any change in events, conditions or
circumstances on which any such statements are based. As a result
of these factors, readers are cautioned not to rely on any
forward-looking statement.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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