Why the National Veterinary Care Ltd share price has risen 31% in 2017

The National Veterinary Care Ltd (ASX: NVL) share price has risen by 31% since the start of the year, soundly beating the market. The share price has risen by 4.44% today.
National Veterinary Care is a rapidly-expanding veterinary clinic operator, which has grown from a single clinic in 2015 to dozens today.
The pet industry has pleasing characteristics thanks to a growing pet (and human) population, increased spending due to the humanisation of pets and defensive earnings because of how much we value our pets over most other things in our lives.
Prior to the recent acquisition announcement National Veterinary Care had already expanded its clinic numbers by 13.2% since 1 July 2017.
However, this number will grow even further thanks to an acquisition pipeline which was announced on 18 December 2017.
National Vet Care announced that it has entered into binding agreements to acquire four more clinics in Australia. The agreements are conditional on final due diligence, board approval and lease agreements. It’s expected these clinics will settle by 28 February 2018.
The new clinics are located inside existing National Vet Care geographic clusters in Queensland and Victoria. They will use and benefit from the operational structure that National Veterinary Care has built upon over the last 12 months.
Together, the four clinics are expected to add annual revenue of $4.5 million and earnings before interest and tax of $0.79 million. Management expect the clinics to add to FY18 earnings per share.
The total cost of these four acquisitions will be $3.6 million, including $320,000 in scrip.
Foolish takeaway
Management had already predicted statutory revenue growth of 25% before this announcement, so I expect revenue growth could be up to 30% by the end of the year.
I think National Vet Care is one of the top small caps to own, which is why I’m a happy shareholder.
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Motley Fool contributor Tristan Harrison owns shares of NATVETCARE FPO. The Motley Fool Australia owns shares of NATVETCARE FPO. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.