The UK listed veterinary group, CVS, is to sell its loss-making businesses in Ireland and the Netherlands for a sum of €2.

The group confirmed today (Tuesday, May 21) that it has exchanged contracts for the disposal of its Dutch and Irish subsidiaries with Global Veterinary Excellence Limited – a company that is owned by veterinary surgeon, James Cahill, who was a former director of the subsidiaries.

Cahill previously worked with CVS for six years and has more than 30 years’ experience in the industry.

CVS has also detailed that it is providing a £600,000 unsecured loan at a market rate to Global Veterinary Excellence Limited as part of the deal.

CVS

According to CVS it is selling both the Irish and Dutch operations because of their “sub-scale nature and the particular challenges within these veterinary markets”.

It also detailed that the operations have had “a negative contribution” to the group’s operating cash flows and that “significant management focus would be required to address operational performance”. 

Richard Fairman, group CEO, said: “Our Netherlands and Ireland practices no longer fit with our strategy of focusing on growth in the UK and Australian markets.

“We have exciting plans to expand in Australia and this disposal will free up working capital and management capacity to support our continued expansion.

“We are delighted to have found a solution that enables our former colleagues to continue to deliver high quality veterinary care in the Netherlands and Republic of Ireland”.

Loss making

The latest financial update from CVS shows that both its Dutch and Irish operations were loss-making for the financial year ended June 30, 2023 with a combined revenue of £19.4 million; adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) loss of £200,000.

They also had a combined pre-tax loss of £6.8 million – which included a £2.3m exceptional write off – and net assets of £16.4 million.

The forecast for the year to June 30, 2024 is a combined adjusted EBITDA loss of approximately £2 million and a pre-tax loss of approximately £6 million.

It is expected that CVS will make a non-cash write-down in its full year 2024 accounts in relation to the disposals.