A loss-making business: CVS Group halts Dutch and Irish operations

CVS, one of the biggest vet care providers in the UK, has announced the disposal of its veterinary operations in the Netherlands and the Republic of Ireland for €2 ($2.17).

The company’s rationale behind the disposal contract follows the group’s review of the 2 subsidiaries’ “sub-scale nature” and their facing “particular challenges” in respective vet markets. 

The vet care provider has a network of 27 veterinary practices and 4 clinics in Ireland. 

Both businesses have been divested to Global Veterinary Excellence Limited, a company owned by a former director of these subsidiary entities. The company has received an unsecured loan of £600,000 ($763K/€704K) at the market rate, and the transaction is expected to be completed in 2 weeks. 

Poor performance

For the financial year (FY) 2023 that ended in June 2023, both Dutch and Irish operations were “loss-making”, leading to a “negative contribution to the Group’s operating cash flows”. Their combined revenue was £19.4 million ($24.6M/€22.7M).

The performance in the Netherlands and the Republic of Ireland was also poor in the first six months of FY 2024 until December 2023. 

New strategy

The vet care provider wants to now focus on operations in Australia and its home market.

 “We have exciting plans to expand in Australia, and this disposal will free up working capital and management capacity to support our continued expansion,” says CVS Group CEO Richard Fairman.

After their sale, CVS will also be able to allocate more capital to its growth strategy, and management will shift its focus completely to its delivery. 

Between July and December 2023, CVS acquired 4 small animal practices in the UK. The group also acquired 13 small animal practices in Australia. The group reported interest in further acquisitions in Sydney, Melbourne, Brisbane and Perth.